However, fewer individual hospitals and health systems met minimum spending requirements
What you should know:
- State law requires each nonprofit hospital or health system to spend a minimum amount on community benefit activities such as free and discounted care, health professional education and health research.
- 79.4% of Oregon hospitals met their unique minimum community benefit spending requirement in 2024.
- In 2024, Oregon’s nonprofit hospitals collectively spent a total of $2.2 billion on community benefit activities, about 12.1% more than the year before.
PORTLAND, Ore. – After spending less the year before, Oregon hospitals and health systems collectively spent more on free or discounted health care, health education and research, donations and other community benefit activities during the 2024 fiscal year, according to a new Oregon Health Authority (OHA) data brief. At the same time, fewer individual hospitals and health systems met their state community benefit spending requirements in 2024.
“Hospitals are essential partners in helping everyone in Oregon lead healthy lives,” said Clare Pierce-Wrobel, director of OHA’s Health Policy and Analytics Division. “While health care faces many challenges, OHA applauds each hospital’s continued investments in valuable community services like vaccine clinics and blood pressure management workshops.”
Nonprofit hospitals are required to provide community benefit activities to maintain their tax-exempt status. Just two Oregon hospitals – or about 3% of the state’s hospitals – are for-profit, while about 20% of U.S. hospitals are for-profit.
The state’s nonprofit hospitals spent about $2.2 billion on community benefit activities in 2024, increasing 12.1% from the year before and returning to approximately the same amount as in 2022. This spending had previously decreased 8.7% in 2023, which was the first time it had declined in nearly a decade.
Meanwhile, only 79.4% of Oregon’s nonprofit hospitals and health systems spent enough to meet their unique state community benefit requirement in 2024. In 2023, 97.4% did.
Charity care is small portion of hospital expenses
The vast majority of statewide hospital community benefit spending continues to be unreimbursed care, or health care for which hospitals are not reimbursed enough to fully cover costs. In 2024, 76.5% of total hospital community benefit spending – $1.7 billion – was unreimbursed care.
Most of that– about $991.9 million– was for unreimbursed care provided to Medicaid enrollees, followed by $308.7 million for community health services that were provided at a loss, and $299.3 million for free or discounted care provided to low-income patients, which is also known as charity care.
Charity care has remained a consistently small portion of total operating expenses at Oregon hospitals. Charity care made up 1.5% of all hospitals’ combined operating expenses in 2024, compared to a low of 1.2% in 2023 and a high of 2.0% in 2019.
About 23.5% of Oregon hospitals’ total 2024 community benefit spending – $525.9 million – involved direct spending. That included $313.7 million to educate doctors, nurses and other health professionals, $104.3 million to conduct health research, and $28.1 million to make cash or in-kind donations.
Nearly 80% of hospitals met state targets
Since 2022, state law has required Oregon’s nonprofit hospitals to spend a minimum amount on community benefit activities. OHA assigns each hospital or health system a unique spending floor based on their historic spending and financial performance. Spending floors are updated every two years and typically grow as a hospital’s total expenses increase.
In 2024, 79.4% of the state’s nonprofit hospitals and health systems met their minimum community benefit spending targets. That was a substantial drop from 2023, when 97.4% of hospitals met their spending floors, and 2022, when 92.1% did. Individual hospital or health system spending ranged from 69.9% to 1,057.3% of their assigned community benefit spending floor in 2024.
More information is available on the OHA Hospital Community Benefit Reporting webpage, including an interactive dashboard that allows users to compare collective and individual hospital community benefit spending over time.
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