From an analysis to help inform the debate on whether not-for-profit hospitals are providing enough community benefits to justify their tax exemption, the Congressional Budget Office found that not-for-profit hospitals provided more uncompensated care than did for-profit hospitals in general, but that there were large disparities among individual hospitals. Using 2003 data from five states--California, Florida, Georgia, Indiana, and Texas--the CBO found that the cost of uncompensated care as a share of hospitals’ operating expenses was 13% at government hospitals, 4.7% at not-for-profits, and 4.2% at for-profits. After adjusting for hospitals’ size and location and local population characteristics, not-for-profits provided between $100 million and $700 million more in uncompensated care than for-profits did in those five states. Not-for-profits were also more likely to perform financially unrewarding services, such as intensive care for burn units, emergency department care, high-level trauma care, and labor and delivery as a community service than were for-profits.
However, for-profit hospitals provided care to more Medicaid patients compared with not-for-profits, since for-profit hospitals tend to be located in areas with higher rates of poverty and uninsured patients. Not-for-profits had Medicaid shares that were 1.3 percentage points lower than for-profit hospitals.
