Not-for-profit vs for-profit hospitals in Metro Atlanta: Comparative analysis of tax status and community benefit.

摘要

Introduction. The study compared Community Benefit across not-for-profit and for-profit hospitals in the Atlanta Metropolitan Statistical Area (MSA). The reason for choosing this market is due to availability of a good representative sample of both types of hospitals in this MSA, and being a resident of Georgia, I was interested to find out the behavior of the two types of hospitals. The importance of the project stems from: (1) Growing controversy and opinions about Community Benefit and how much not-for-profits should provide, above for-profits, to continue to enjoy tax exempt status. (2) Various tax exemptions in 2002 were estimated to be ;Methods. Data Sources & Analysis: (a) Income statement components and cost/revenue components of the variables used in the calculation of Community Benefit were obtained from Medicare Cost Report. (b) Tax rate components were obtained from corporate offices of the for-profits. (c) Each hospital's Community Benefit component was calculated as a percent of net revenue and the overall Community Benefit was calculated. (d) The study focused initially on 17 not-for-profit and 7 for-profit hospitals, in Atlanta Metropolitan Statistical Area (MSA). (e) The variables relating to Community Benefit were: patient revenue, margins, uncompensated care, and shortfalls in SCHIP, Medicaid, and Georgia Indigent Care Program (GICP). (f) The study expanded to include all the 27 not-for-profit and 9 for-profit hospitals. (g) Both approaches grouped the hospitals into five revenue sizes and compared the Community Benefit of the two groups. (h) Revenue sizes: (1) Under ;Results (Appendix P1, P2, Q1, Q2, and Z). In the first sample, using the selected hospitals, it was found that: (1) Without tax not-for-profits provided 7.67% average Community Benefit and for-profits, 5.83%; a difference of -1.84% in favor of the not-for-profits . (2) With tax of 4.8%, not-for-profits provided the same 7.67% while the for-profit share increased to 10.63% a +2.96% difference in favor of the for-profits. (3) Factoring negative income and margins (Appendix P & Q), and at 2.74% tax rate for-profit share declined to 8.57% a +0.90% difference in favor of the for-profits. In the second sample, including all the hospitals, the following results were found: (1) Not-for-profits provided reduced Community Benefit of 6.60% in comparison to 5.63% provided by for-profits, a difference of -0.97% in favor of not-for-profits . (2) With tax rate of 4.8, not-for-profits provided the same 6.60% while the for-profit share increased to 10.43%, a +3.83% difference in favor of the for-profits. (3) Factoring negative income and margins (Appendix P & Q), and at 2.74% tax rate for-profit share declined to 8.37% a +1.77% difference in favor of the for-profits. (Abstract shortened by UMI.).