Andrew Nanfito

Ms. Townley

Composition

12/6/2018

Should Hospitals be Tax Exempt

Hospitals in and of themselves are pretty costly to run and uphold depending on where

you are of coarse. So say you are in a more impoverished area where you might not be able to

afford all the medical expendages of a hospital if you get injured. Shouldn’t the hospitals be tax

exempt in order to help you cover your medical bill? If you said yes, well congrats it makes

sense but I’m going to tell you why that’s wrong.

So for a hospital to be tax exempt it must provide charity to its community up to a certain

threshold. So this means once they hit that threshold they aren’t obligated to necessarily provide

any more charity. Another problem with this approach is that this so called threshold isn’t

heavily regulated. This is understandable with the amount of hospitals/care providers there are

out there and it would be hard to exactly see how every single one is contributing to its

community. This is the major problem of the tax exemption hospitals. A lot of these hospitals

actually fall under the bar of helping the community and use a lot of that extra money to balance

their budgets. Now some may think oh they are doing this to be able to provide better, more

effective care but that’s just not happening.

Hospitals don’t just use the extra money to balance their budgets but they also use the

money for other things such as research. One such place would be the Cleveland Clinic which
provides medical advances to the world but their community suffers from this said negligence.

This is good for the rest of the world but that work should be done by the researchers and not

hospitals/clinics who should take care of their communities. Anyone can do the research but who

else can care for their community.

I stated before that there was a certain bar that needs to be hit and that a lot of hospitals

were falling under this bar. What this means is stated in the ACA( affordable care act) and it

requires tax exempt hospitals to provide a ​noticeable​ change of improvement in the community.

Now after the ACA was published many hospitals changed up their routine. Previously nonprofit

hospitals only contributed about 0.7% of their profits to the community but now they are

contributing around 7.6% now (Herring 2).This is good but why did we have to push for them to

be doing something they should have already been doing. They started actually start contributing

mainly because they were scared of losing their tax cut.

Non profit hospitals have a duty to help their community but it obviously is pretty poor at

times but it can be good but sometimes for profit hospitals are actually contributing more than

many nonprofits. For Profits hospitals actually roughly maintain around 5.7% of their budget for

charity and just giving back to the community(Herring 2). Now yes not all for profit hospitals

help out their communities but it is still more then nonprofits at times.

In the end yes nonprofit has some plus sides but in cost analysts you can obviously see

that it really isn’t worth it in the end. It may help out a little bit but never enough to help your

community. We could use that extra money from taxes to actually improve the community

themselves. That’s why hospitals should be taxed.

 Warraich, Kaider. ​Hospitals need to earn their tax-exempt status.​ STAT News, 2017.

https://www.statnews.com/2017/11/27/hospitals-tax-exempt-status/​. Accessed on 4 Dec. 2018.

Herring, Bradly PhD, Gaskin, Darrel Phd, Anderson, Gerard PhD. ​Comparing the Value

of Nonprofit Hospitals’ Tax Exemption to Their Community Benefits. ​NCBI, 2018.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5813653/#!po=83.3333​. Accessed on 4 Dec.

2018.

James, Julia. ​Nonprofit Hospitals' Community Benefit Requirements. ​Health Affairs,

2016. ​https://www.healthaffairs.org/do/10.1377/hpb20160225.954803/full/​. Accessed on 4 Dec.

2018.