Single hospital received close to a half billion dollars in exemptions
A new report examining the finances of nonprofit hospitals in New York City finds that some hospitals fall significantly short on expected community investments. The study by the Lown Institute, a healthcare think tank, includes 21 hospitals and finds that nine have a Fair Share deficit—meaning that the value of their community investments fails to equal the value of their federal, state, and local tax breaks. In total, the nine hospitals are $727 million short of equaling the $1.2 billion in tax breaks they received in 2019.
“Communities make good faith investments through these tax breaks and expect that hospitals will hold up their end of the bargain,” said Vikas Saini, MD, president of the Lown Institute. “Our evidence shows that’s not always the case.”
New York-Presbyterian, which had $493 million in tax breaks, had the largest Fair Share deficit of all hospitals at $359 million—nearly half of the city’s total deficit. At the other end of the list, Montefiore Medical Center had the largest surplus at $76 million.
Table: NYC hospitals with Fair Share deficits, 2019
| Hospital | Fair Share Deficit |
| New York-Presbyterian Hospital | $359 million |
| New York University Langone Medical Center | $167 million |
| Mount Sinai Hospital | $98 million |
| New York-Presbyterian/Brooklyn Methodist Hospital | $43 million |
| Staten Island University Hospital | $25 million |
| Mount Sinai St. Luke’s Roosevelt Hospital | $25 million |
| Wyckoff Heights Medical Center | $4.3 million |
| New York-Presbyterian/Queens | $3.7 million |
| Brooklyn Hospital Center – Downtown Campus | $1.6 million |
According to the report, the total Fair Share deficit is enough to triple what the city spends on school meals annually, create thousands of new affordable housing units, or pay off the medical debt for every patient sued by a New York hospital over the past five years.
“If we want hospital behavior to change, there needs to be greater transparency and accountability,” said Dr. Saini. “New regulations are long overdue.”
Methodology
Fair Share spending is calculated by comparing the value of hospital tax exemptions to the amount spent on meaningful community investment. Federal, state, and local taxes are all included in the tax exemption valuation, as are benefits from tax-exempt bonds and donations. Data sources include CMS hospital cost reports, IRS Form 990, and property assessments from the NYC Department of Finance.
Meaningful community investment includes the following categories of spending from IRS Form 990 Schedule H: Financial assistance, community health improvement activities, contributions to community groups, community building activities, and subsidized healthcare services. Only private nonprofit general hospitals with available IRS and CMS data were included in the analysis.
Support for this study was provided by the 32BJ Labor Industry Cooperation Trust Fund.
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About the Lown Institute
Founded in 1973 by Nobel Peace Prize winner Bernard Lown, MD, developer of the defibrillator and cardioverter, the Lown Institute believes that a radically better system of health is possible and generates bold ideas towards that goal. The Lown Institute Hospitals Index for Social Responsibility is a signature project of the Institute and features measures never used before like Fair Share spending, racial inclusivity, and pay equity.
Media contact: Aaron Toleos, vice president of communications for the Lown Institute, atoleos@lowninstitute.org