Hospitals that pay board members offer less charity care, study finds

Illustration: Lazaro Gamio/Axios

Nonprofit hospitals that paid their board members offered less charity care than facilities that didn't, per a new Health Affairs analysis.

Why it matters: Nonprofit hospitals are required to offer charity care in exchange for their tax-exempt status. But the sector has come under scrutiny for its pricing practices and for saving more in tax exemptions than it provides in uncompensated care.

What they found: From 2011 to 2019, average trustee compensation across all nonprofit hospitals increased by 46%, while the average charity-care-to-expense ratio dropped by 21%.

  • This association "suggests that trustees' motivations and activities, as well as the underlying organizational priorities in some trustee-compensating hospitals, may have deviated from hospitals' stated charitable missions," study authors write.

Be smart: Nearly two-thirds of more than 2,000 nonprofit hospitals analyzed as of 2019 still don't compensate their trustees.

  • At top-ranked hospitals, board members most commonly have backgrounds in finance, not health care, a February Journal of General Internal Medicine study found.

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