Think tank says Cleveland Clinic still among hospitals with highest disparity between tax breaks and community benefit

CLEVELAND, Ohio – The Cleveland Clinic still holds an undesirable spot near the top of an annual ranking of U.S. nonprofit hospitals with the highest disparity between what they’re receiving in tax breaks and what they’re directly giving back to their communities.

The Lown Hospitals Index 2022 Community Benefit ranking found the Clinic had the fourth-highest fair share deficit among U.S. nonprofit hospitals at $611 million. The fair share deficit is the difference between the estimated amount a hospital system receives in tax breaks versus the amount it directly invests into its community.

The Clinic had the highest fair-share deficit in last year’s rankings at $261 million. This year’s much higher total is partly attributable to federal CARES Act funding doled out during the COVID-19 pandemic. The Clinic accepted $423 million in funds in 2020 while posting $1.33 billion in surplus revenues, according to a news release from Lown Hospitals.

Lown Hospitals, a Massachusetts health care think tank, determined that 227 of the 275 U.S. nonprofit hospital systems it studied had fair share deficits. Overall, the hospitals systems had $18.4 billion in fair share deficits, which could have been used to improve health care equity or address food insecurity and housing needs, among other things, according to the think tank.

Providence St. Joseph Health, based in Seattle, had the highest fair share deficit at $705 million. Trinity Health, based in Michigan, was second at $671 million and Mass General Brigham in Boston was third at $625 million.

Federal reporting guidelines define a hospital’s community benefit as investments in education, research, financial assistance and Medicaid shortfall, subsidized services, and outreach programs, the Clinic said in a statement. Lown’s methodology does not take research, education and Medicaid shortfall into account, the statement says.

“Cleveland Clinic remains committed to the communities we serve,” the statement says.

Lown argues that some of those categories don’t offer a direct benefit to communities; for example, research is often funded through taxpayer dollars and may not be targeting a community’s needs.

The Clinic said Lown’s methodology downplays the health system’s community benefit. The Clinic provides more than $500 million in Medicaid subsidies and commits more than $400 million to research and education each year, the statement says.

In addition, the Clinic’s community benefit increased to $1.31 billion in 2020, the highest the health system has ever reported, the statement says.

Previously in-depth: Lown Institute rankings and what they mean in Cleveland