New Study Reveals Nonprofit Hospitals Spend Billions on Community Benefits, But Warns “It All Depends on How You Define It”
Analysis finds nonprofit hospitals spent $94 billion on community benefits in 2022, but impact on community health is unclear.

A published July 26 in The Millbank Quarterly and led by Hossein Zare, PhD, MS, associate research professor in Health Policy and Management, highlights just how dramatically the definition of “community benefit” shapes our understanding of nonprofit hospital contributions and raises urgent questions about transparency, accountability, and tax-exempt status.
Analyzing IRS 990 Schedule H data from 2019–2022, the research finds that nonprofit hospitals spent $94 billion on community benefits in 2022 alone, or up to $121 billion when including bad debt. Yet what qualifies as a “community benefit” varies widely depending on the organization doing the counting. The American Hospital Association (AHA) puts the figure higher, in part by including bad debt, while others, like the Catholic Health Association and academic researchers, use narrower definitions.
“We found that the numbers shift dramatically based on what is included from patient care services like charity care to broader expenses like Medicaid shortfall or education,” said Zare. “There’s no standardized definition, which means hospitals can report large figures without necessarily showing how these services directly benefit the communities they’re meant to serve.”
Key findings from the study show that nonprofit hospitals in 2022 spent $21 billion on patient-directed services such as charity care, $33 billion on broader facility-based services including education and research, and $41 billion on Medicaid shortfall.
Additionally, hospitals reported $26 billion in bad debt, a category whose classification as a community benefit remains highly contested. Despite the large sums, the study finds significant variation in how hospitals allocate these resources: 21% of nonprofit hospitals spent less than 4% of their expenses on community benefits. In comparison, 33% spent more than 10%.
Nonprofit hospitals spent about three times more than the tax exemptions they received on community benefits; however, there is a wide variation across hospitals, says Zare. “We can’t have a meaningful accountability system if we don’t measure both sides of the equation.”
The study recommends a coordinated federal approach involving the IRS, CMS, and public health officials to standardize definitions, update reporting requirements, and more, directly linking community benefit spending to local health priorities identified through Community Health Needs Assessments (CHNAs). The researchers also argue that the IRS should compel hospitals to report data individually, rather than as entire health systems, and provide more detailed information on how spending translates into improved community health.
As policymakers consider how to hold nonprofit hospitals accountable for their tax-exempt status, this study highlights the stakes: More explicit definitions could be the difference between genuine investment in public health and billions of dollars in unaccountable expenditures.