As charities, nonprofit hospitals are exempt from paying most taxes. In exchange for tax breaks, nonprofit hospitals are expected to provide tangible benefits to the public. And if they adhere to their missions, if they provide charity care to the needy, if they serve as accessible health care providers for low-income patients, then the value that they bring to public should far exceed the value of the tax breaks that they enjoy. This is the tacit bargain between these hospitals and the public at large.
Yet in most states, including here in Ohio, too many nonprofit hospitals aren’t keeping their side of the deal. In aggregate, the charity care provided by Ohio nonprofit hospitals amounts to less than the value of tax breaks that they receive. This is what the Lown Institute calls a “fair share deficit,” and in 2020, Ohio’s nonprofit hospitals recorded a fair share deficit of $484 million. That’s enough to wipe out 18% of medical debt on credit reports in the state.