(Hartford, CT) – To remain exempt from federal, state and local taxes, nonprofit hospitals must provide goods and services to benefit the community. These goods and services are broadly known as “Hospital Community Benefits.” The Connecticut Office of Health Strategy (OHS) publishes an analysis of the community benefit and community-building activities of the state’s nonprofit acute care hospitals annually.
The most recent report, based on data reported by 23 hospitals for tax filing year 2023, shows that statewide investments in community benefit topped $2 billion. While this represents a total increase of 14. 57% since 2016, community benefit has declined by 3% as a percentage of total hospital expenses.
“Community benefit dollars represent an investment by our hospitals in the communities they serve,” said Deidre Gifford, MD, MPH, commissioner. “This report can help communities understand the ways hospitals are using their community investment resources and engage with hospitals to further respond to community needs.”
Unreimbursed Medicaid costs, reported by hospitals at $1.24 billion, account for 61% of total community benefit expenditures. Data submitted by hospitals show these costs as the fastest growing segment of community benefit expenditures, accounting for 64% of the growth since 2016.
Financial assistance at cost, also known as charity care, which is free or discounted care for patients that meet eligibility requirements, totaled $283 million or 14.67% of community benefit expense in FY 2023. Financial assistance at cost has declined by $61.8 million (17.9%) since 2016.
Hospital community benefits also include many of the investments hospitals make to address their local community health needs assessment (CHNA). These investments, target needs identified in the hospital’s primary service area. Stamford Hospital (18.62%), Bridgeport Hospital (13.61%) and Yale New Haven Hospital (12.05%) had the highest spending on these activities as a percentage of total hospital expenditures in FY 2023.
“The work our hospitals undertake to address health outcomes and health disparities in the communities they serve is vital,” said Gifford. “This report serves as a vehicle for us to continue to work with hospitals to understand this spending. In particular, as the unreimbursed cost of care for Medicaid patients exceeds other community benefit spending, and charity care declines, it is critical that we standardize a consistent and accurate way to measure those costs.”
The OHS report provides recommendations to improve both transparency and accuracy in community benefit reporting. “The federal government and states across the country have begun to look at community benefit more closely in recent years,” said Gifford. “We want to provide policy makers in Connecticut with the data and tools they need to address healthcare access, affordability, equity and quality in our state.
The OHS report includes recommendations to:
- Increase transparency on Medicaid and other cost calculation methodologies, ratios and beneficiary counts.
- Expand requirements to report on the outcomes of financial assistance screening activities.
- Align Community Benefit reporting on unreimbursed Medicaid costs to the revised calculation introduced in the FY2023 Annual Report of Short-Term Acute Care Hospital’s Financial Status. This updated approach calculates the statewide Medicaid payment to cost ratio at 0.87 (or 87 cents per dollar), providing a more accurate and standardized representation of Medicaid costs and reimbursement.
Solicitation for Public Comment
OHS invites the public to provide comments on the Community Benefit Summary and Analysis Report. Written comments on the Community Benefit Summary and Analysis Report and dashboard must be received by the Office of Health Strategy by May 28, 2025, attention: Elisa Neira-Hamada, Senior Director, Health Equity, Office of Health Strategy, PO Box 340308, 450 Capitol Ave MS51OHS, Hartford, CT 06016 or by email to OHS@ct.gov with the subject line “Community Benefit Summary and Analysis Report – Public Comment.”