In the years following the enactment of the Affordable Care Act (ACA), non-profit hospitals across the country benefited from the expansion of state Medicaid programs, which alleviated financial stresses from previously uninsured patients. However, while many experts hoped that hospitals would directly invest these savings into their communities, the growth in funds from Medicaid expansion did not translate into greater community benefit spending, according to a JAMA Network Open study from health policy researchers at Penn Medicine and PolicyLab at
"We know that Medicaid expansion helps lift financial burdens that hospitals face, but it wasn't clear if those savings were being redirected back into the community because of it," said first author
To better understand community benefit spending, the researchers analyzed hospital
For 1,666 hospitals, the researchers compared community benefit spending in states that expanded Medicaid with states that did not. The team found that Medicaid expansion was associated with a decrease in overall spending on charity care and subsidized care.
The researchers also found that hospitals that experienced net gains -- because declines in uncompensated care were greater than increases in unreimbursed Medicare expenses -- did not necessarily increase their direct community spending. In particular, urban hospitals and large hospitals, which experienced the greatest net gains, decreased their community-directed spending, the authors reported.
The study's senior author
"While we observed that non-profit hospitals did not increase community benefit spending following the expansion of Medicaid coverage, we have to consider this information in the context of the contributions our hospitals make in their communities and the sacrifices of their staff to care for patients -- especially in light of COVID-19 and the surge in Medicaid enrollment we are expecting as a result of massive unemployment across the country," said Rubin, who is also a professor of Pediatrics in the
Currently, hospitals do not have minimum community benefit requirements, which has come under scrutiny by some lawmakers questioning the amount of contributions to qualify for tax-exempt status. Before the ACA, in 2009,
"As we move beyond the COVID-19 epidemic, I hope these findings will motivate policymakers to return to this very important subject," Kanter said. "I think the goal with this research is to inform and provide data that can be used to refine policies and develop a clearer definition around community benefit spending for tax-exempt entities."
Co-authors on the study include