The Virginia Hospital & Healthcare Association takes pride in publishing the annual Community Benefit Report. This publication is an important opportunity to highlight the substantial community contributions Virginia’s local hospitals and health systems make each day. They include essential health services to support community well-being, free care provided to patients without insurance, and many other programs that support health care access and promote quality of life throughout the Commonwealth.
That community benefit support includes financial assistance, Medicaid losses, subsidized health services provided, and community programs supported by Virginia hospitals. Community benefit, as defined by the IRS, totaled $1.4 billion in 2014. With other forms of community support including Medicare losses, taxes paid, and bad debt expenses absorbed by Virginia hospitals, the total benefit to Virginia communities in 2014 was nearly $2.85 billion.
Local hospitals and health systems are economic cornerstones in their communities. They employ 115,000 people, generate $36 billion in economic activity, and support local businesses and vendors, according to 2013 data. Yet those benefits are imperiled. Data on 2014 hospital operating margins that Virginia Health Information (VHI) made public shortly before this report’s release shows that 25 percent of Virginia’s acute care hospitals, and 42 percent of rural acute care hospitals, had negative operating margins in 2014. Those numbers aren’t a one-year anomaly. From 2008-2014, the annual rate of Virginia acute care hospitals with negative operating margins has ranged from 38 percent to 25 percent. Among rural acute care hospitals, the range is 63 percent to 42 percent.
Those pressures have the potential to negatively impact health care access and our economy. Despite challenges, hospitals remain committed to serving community medical needs. Hospitals treat the uninsured, under-insured, and those with commercial insurance. Hospitals support free clinics, mobile treatment programs, and free health screenings. They provide prescription drug assistance, transportation, and many other programs and initiatives beneficial to the community. Hospitals provide substantial subsidies to clinical services such as trauma centers and neonatal units. And they support the education of future nurses, doctors, and other health care providers. It is vitally important to find long-term solutions to the pressures confronting hospitals for the good of all Virginians.
James B. Cole Sean T. Connaughton
Virginia’s Hospitals in 2014 Provided...
Virginia’s Hospitals in 2014 Provided...
Emergency Department Visits
Emergency Department Visits
: 3,576,199
: 3,576,199
Inpatient Admissions
Inpatient Admissions
: 779,380
: 779,380
Babies Delivered
Babies Delivered: 61,947
: 61,947
COMMUNITY BENEFIT
Every day, Virginia hospitals and health systems save lives and provide medical care to
those in need. Often, hospitals receive little or no payment for care provided. Yet hospitals
still support a wide array of free or reduced-cost programs and services that improve and
enhance the health of their communities. The magnitude of this support and the many
ways that hospitals and health systems support and sustain their communities are
described in this report.
Community Benefit Resources:
Visit
this page
(http://www.vhha.com/research/community-benefit/community-benefit-stories/) to read stories about the great community works Virginia’s local
hospitals and health systems are engaged in throughout the Commonwealth. And
visit
this page
(http://www.vhha.com/research/community-benefit/) to access the
interactive community benefit tool featuring historical trend data.
Total Community Support
Community Benefit ………...……. $1.4 billion Medicare Shortfall ……… $622.6 million Bad Debt Expense ………. $531.0 million Community Building ……….……… $4.8 million Taxes Paid ………. $280.4 million Total Community Support ………..……….. $2.85 billion
Community Benefit as Defined by IRS ………..…... $1.32 billion Value of Tax Exemptions ……….. $834 million Difference ………. $486 million
Total Value of Community Benefit Programs and Services
$1.4
Billion
Community Benefit (defined by Internal Revenue Service Schedule H)
Financial Assistance ……….………. $584.2 million Medicaid Shortfall ………..………. $329.9 million Subsidized Health Services ……….……….. $146.9 million Other Community Benefit Programs and Services ………..…….. $347.4 million Total Community Benefit ……….………..…. $1.4 billion
Total Value of Community Support
$2.85
Billion
Nonprofit Community Benefit Provided by Tax-Exempt
Hospitals
$486
Million
All of the information in VHHA’s Community Benefit report is based on costs (not charges), and the costs are net costs (they take into account any revenue a hospital may receive for a particular service).
Programs that hospitals and health systems offer as part of their marketing efforts are not included in this data.
$330 MILLION
MEDICAID SHORTFALL
Financial assistance, or charity care, is the single largest category of community benefit. In 2014, Virginia hospitals and health systems provided $584 million in free or discounted care to needy patients.
Estimates place Virginia’s uninsured population at around 1 million people. Many more are under-insured due to limited coverage, high deductibles, and co-pays. An August 2014 Gallup survey listed Virginia as one of only three states where the uninsured rate increased during the year.
Many hospitals provide free care to patients whose incomes are 200 percent of the federal poverty level or higher. For those who don’t qualify for free care based on income, hospitals discount the cost of their care through sliding fee scales or some other adjustment. Hospital employees also help patients find other sources of health coverage for which they may be eligible.
$584 MILLION
FINANCIAL ASSISTANCE
Subsidized health services are billed clinical services hospitals provide to patients where reimbursements fail to cover hospitals’ cost to provide care. Examples include trauma centers, neonatal units, behavioral health services, obstetrics services, burn centers, and others.
The amount of the subsidy provided in 2014 was, conservatively, $146.8 million. This amount does not include the losses associated with patients who qualified for financial assistance or whose care was paid for by Medicaid or Medicare.
Hospitals subsidize these services because they are important to their communities. Without such subsidies, these vital and often life-saving services could disappear from the community.
$147 MILLION
VITAL CLINICAL SERVICE SUBSIDIES
The reimbursement hospitals receive for providing care to Medicaid patients is far less than what it costs to provide that care.In 2014, it cost Virginia’s hospitals and health systems $1.8 billion to deliver care to individuals covered by Medicaid. Reimbursements for that population were less than $1.5 billion, resulting in a $329.9 million shortfall. Put another way, Virginia’s Medicaid program paid hospitals 71 cents for every dollar spent on inpatient care and 76 cents for every dollar spent on outpatient care. Virginia is one of the strictest states on Medicaid eligibility criteria. Of the roughly 1.2 million Virginians enrolled in Medicaid in 2014, more than half were low-income children. Nearly 20 percent were blind or disabled individuals, and 7 percent were elderly. Another 23 percent were parents and caregivers (such as low-income adults and pregnant women).
Mobile clinics Health screenings Residency programs Nursing scholarships Health career camps Immunizations
Cancer support groups Bereavement support Home health visits Transportation Burn units Asthma education Parenting classes Nutrition programs Counseling Prescription drugs Medical supplies
Virginia hospitals and health systems strengthen community health many different ways ranging from life-saving screening tests to free mobile medical clinics, support for important community health improvement programs, and training of future health care professionals. In 2014, hospitals spent $347 million to support community programs including:
$347 MILLION
OTHER COMMUNITY PROGRAM SUPPORT
HOW THIS REPORT WAS COMPILED
This report reflects fiscal year (FY) 2014 data for all the acute care hospitals, and certain specialty hospitals, in Virginia. Definitions and calculations are based on specifications from Schedule H of Internal Revenue Service Form 990. Sources for this analysis include hospital and health system audited financials, Medicaid and Medicare cost reports, and tax data from the University of Virginia’s Weldon Cooper Center. Tax-exempt methodology was developed by Verite Consulting to calculate the value of tax-exempt status. Data in this report are classified by type of hospital, as shown below.
2016 Report (FY 14 Data) Not-for-Profit For Profit Total
Number of Hospitals 74 20 94
Community Benefit as defined by IRS
Financial Assistance $550,561,414 $33,589,865 $584,151,279
Medicaid Shortfall $280,651,368 $49,254,517 $329,905,885
Subsidized Health Services $146,869,549 $- $146,869,549
Other Means-Tested Government Programs $348,607 $- $348,607 Community Programs and Services $342,456,158 $4,967,045 $347,423,203 Total IRS Community Benefit $1,320,887,098 $87,811,427 $1,408,698,525
Other Community Support
Medicare Shortfall $541,590,087 $81,004,527 $622,594,614
Bad Debt Expense $474,437,188 $56,530,937 $530,968,125
Community Building $4,792,304 $47,513 $4,839,817
Taxes Paid $78,431,884 $201,926,064 $280,357,948
Total Other Community Support $1,099,251,463 $339,509,041 $1,438,760,504
Total Benefit to the Community $2,420,138,562 $427,320,468 $2,847,459,029
Community Benefit Value Exceeds Tax Exemption
Nonprofit Community Benefit as Defined by IRS $1,320,887,098
Value of Tax Exempt Status $834,871,778
Augusta Health Bath Community Bon Secours
Bon Secours DePaul Bon Secours Maryview Bon Secours Memorial Regional Bon Secours Richmond Community
Bon Secours St. Francis Bon Secours St. Mary’s Mary Immaculate Rappahannock General Buchanan General Carilion Clinic
Carilion Franklin Memorial Carilion Giles Community Carilion Medical Center
Carilion New River Valley Medical Carilion Stonewall Jackson Carilion Tazewell Community Centra Health
Bedford Memorial Hospital Southside Community Hospital Chesapeake Regional Healthcare Children’s Hospital of The King’s Daughters
Community Health Systems Southampton Memorial Hospital Southern Virginia Regional Southside Regional HCA Virginia
CJW Medical Center Dominion Hospital Henrico Doctors’ Hospital John Randolph Medical Center
Lewis-Gale Medical Center Lewis-Gale - Alleghany Lewis-Gale - Montgomery Lewis-Gale - Pulaski Reston Hospital Center Spotsylvania Regional Inova Health System
Inova Alexandria Inova Fair Oaks Inova Fairfax Inova Loudoun Inova Mount Vernon LifePoint Health
Clinch Valley Medical Center Danville Regional Medical Center Fauquier Hospital
Memorial Hospital
Twin County Regional Healthcare Wythe County Community Hospital Mary Washington Healthcare
Mary Washington Hospital Stafford Hospital
Mountain States Health Alliance Dickenson Community Hospital Johnston Memorial Hospital Norton Community Hospital Russell County Medical Center Smyth County Community Hospital Novant Health Prince William Pioneer Community Hospital of Patrick Henry
Riverside Health System
Hampton Roads Specialty Hospital Riverside Behavioral Health
Riverside Doctors’ Hospital Williamsburg
Riverside Regional Medical Center Riverside Rehabilitation Institute Riverside Shore Memorial Riverside Tappahannock Riverside Walter Reed Sentara Healthcare
Sentara Halifax Regional Sentara Martha Jefferson
Sentara Northern Virginia Medical Center
Sentara Princess Anne
Sentara Rockingham Health Care Sheltering Arms Physical Rehabilitation Centers
University of Virginia Health System University of Virginia Medical Center
UVA Culpeper Regional Hospital Valley Health
Page Memorial Shenandoah Memorial Surgi-Center of Winchester Valley Physician Enterprise Warren Memorial
Winchester Medical Center VCU Health
Children’s Hospital of Richmond Community Memorial Hospital VCU Medical Center
Virginia Hospital Center Wellmont Health System
Wellmont Lee Regional Wellmont Lonesome Pine
Wellmont Mountain View Regional
2014 Community Benefit Survey Participants
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