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The community contributions made by Minnesota nonprofit and government hospitals and health systems in 2010 totaled more than $3.4 billion, an increase of almost 6 percent compared to 2009, according to the latest Community Benefit Report released by the Minnesota Hospital Association.
The overall increase is largely due to double-digit growth in charity care, which jumped up dramatically by 27 percent from 2009 to 2010. The new data provide evidence that economic challenges bring greater pressure on health care providers, yet hospitals and health systems continue to face those challenges with a spirit of caring and a commitment to improving Minnesotans’ health.
“As nonprofits, hospitals and health systems go above and beyond to make numerous and powerful community contributions, and most of those contributions stay local,” said Lawrence Massa, President and CEO of the Minnesota Hospital Association. “One of the main ways hospitals contribute to their community is by providing high quality health care to our patients, regardless of their ability to pay, and by leading efforts to improve care and lower costs.”
About $1.17 billion of the total was spent on community and health services, education and healthcare workforce development, research, community building activities and cash, in-kind donations to other local nonprofits. In addition, a substantial and growing proportion of hospitals’ community contributions is from providing care without getting paid.
This uncompensated care includes “charity care,” for patients from whom there is no expectation of payment, and “bad debt,” the result of patients who cannot or did not pay their share of the hospital bill. Uncompensated care as a whole totaled $496.5 million in 2010, an increase of about 4 percent from 2009 to 2010.
Another significant driver of hospitals’ community contributions is the difference between the actual cost of providing care and the payments received from caring for Medicare and Medicaid patients. The report details that state and federal government payments to Minnesota hospitals and health systems for these programs were more than $1.3 billion below the actual costs of providing the care.
In all, such government underfunding accounts for nearly 7 percent of Minnesota hospitals’ total operating expenses. The 2011 Community Benefit Report reflects 2010 financial information – the most recent data available, self-reported by Minnesota hospitals and health care systems and supplemented with data reported to the Minnesota Department of Health.
The annual report comprises an analysis of categories of community contribution activities on a statewide and regional basis. Community contributions range from supporting the education and training of tomorrow’s healthcare workforce and medical research to public health activities and community outreach programs, such as health screenings and immunization clinics.
In addition, hospitals and health systems play a crucial role in the economic health of Minnesota’s communities. As the largest employers in most communities, Minnesota hospitals generated $27.2 billionin economic activity for the state and supported more than 214,000 jobs in 2009, according to a study conducted by the Minnesota Department of Employment and Economic Development.
“Minnesota’s hospitals are a tremendous asset for their communities, serving as nation-leading health care providers, community leaders and economic drivers,” added Massa. “It is important that Minnesotans continue to support their hospitals so together we can continue to advance our communities and improve Minnesotans’ health.”