Tom Nickels, Executive VP of Government Relations and Public
Policy for the American Hospital Association:
The mission of hospitals and health systems is to care for their communities
and patients. In order to fulfill that mission, they need a positive margin to
keep pace with advances in medicine and increasing health care needs.
Hospitals reinvest their investment income in advances in care that
ultimately result in improved outcomes, longer life expectancy, innovations
in care and new technologies, and a better quality of life for patients and
communities. As news reports have noted, the U.S. stock markets in 2017
have been the strongest in years and hospitals, like other entities and
individuals that have made investments, are benefitting from strong returns.
The cost of providing care also continues to rise faster than payments for
hospital services due to a range of factors including the skyrocketing costs of
prescription drugs, increased regulatory burdens and because Medicaid and
Medicare continue to pay less than the cost of care.
An analysis conducted by Ernest and Young in October showed that hospitals’
and health systems’ community benefit activities outweigh the value of their
federal tax exemption by a factor of 11 to one. In other words, for every
dollar invested in hospitals and health systems by means of their federal tax
exemption they deliver $11 in benefits back to their communities.
Hospitals of all kinds — urban and rural, large and small — will continue to
demonstrate the value they provide and solidify their commitment to making
their communities healthier through, among other activities, strengthened
community partnerships, health and wellness programs, and outreach
activities designed to combat identified community needs.