BOSTON, Mass.—A new report by the Lown Institute, an independent healthcare think tank, finds that most Wisconsin hospitals spend less on their communities than they receive in tax breaks as nonprofit organizations. Analysts say Wisconsin hospitals fell short in giving back to their community by an average of $493 million per year from 2020 to 2022. This “fair share deficit” is enough to cover the majority of rural hospital losses, nearly double the governor’s proposed budget for mental health service expansions, or wipe out medical debt for 280,000 people.
Nonprofit hospitals and health systems in the United States are generally exempt from taxation but are expected to provide benefits to the communities they serve in return. For example, they “pay back” their tax breaks by providing free or discounted healthcare, establishing community health programs, or addressing nonmedical drivers of health like access to housing or nutritious food.
WISCONSIN NONPROFIT HOSPITALS WITH THE LARGEST FAIR SHARE DEFICITS
- Froedtert Community Hospital (New Berlin), -$75 million
- Froedtert Hospital (Milwaukee), -$44 million
- Aurora St. Luke’s Medical Center (Milwaukee), -$37 million
- Aurora BayCare Medical Center (Green Bay), -$28 million
- SSM Health St. Mary’s Hospital (Madison), -$21 million
“When nonprofit hospitals fail to give back to their community, important health needs go unaddressed and an unfair burden is put on other hospitals to pick up the slack,” said Vikas Saini, MD, president of the Lown Institute. “Too often, hospitals in the best financial position to give back are the ones falling behind.”
Forty-three Wisconsin hospitals collectively invested $104 million more in their communities than the value of their tax benefits. Among these hospitals, Mile Bluff Medical Center had the largest surplus at $9 million.
Policy solutions include more transparent reporting requirements, improved charity care standards, and defined community spending targets—to ensure all nonprofit hospitals meet their obligations. States like Maryland, Oregon, and Massachusetts, have made progress in implementing such measures.
Methodology: The Lown Institute examined the value of hospital tax benefits and community investment for more than 1,800 hospitals across twenty states from 2020-2022. Data sources included IRS Form 990, CMS hospital cost reports, and municipal property data. Tax benefits measured included federal income tax, state income tax, property tax, sales tax, value of tax-exempt donations and bonds, and federal unemployment tax. Community investment spending included select categories from IRS Form 990: financial assistance, community health improvement services, subsidized healthcare services, cash and in-kind contributions, and community building activities. A full methodology is available.
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