A Cost/Benefit Analysis of Providing Tax-Exempt Status to Non-Profit Hospitals

18 Pages Posted: 11 Apr 1998

See all articles by Jean E. Harris

Jean E. Harris

Pennsylvania State University - School of Business Administration

William J. Strouse

Moffitt, Pease & Lim Associates, Inc.

Date Written: December 1, 1997

Abstract

Many nonprofit hospitals have seen their tax-exempt status challenged in recent years. State and local governments, and investor-owned hospitals, are challenging the rationale for granting these tax exemptions. The amount of charity-care that nonprofit hospitals provide is being scrutinized and compared to the value of the tax exemptions these organizations enjoy. This paper examines four nonprofit hospitals in Pennsylvania. They collectively received $6,562,540 in tax exemption benefits, but provided only $2,468,563 in charity care to their local communities. Data for this study was collected from public sources, including tax assessment records and reports from the Pennsylvania Health Care Cost Containment Council.

JEL Classification: I18, H20

Suggested Citation

Harris, Jean E. and Strouse, William J., A Cost/Benefit Analysis of Providing Tax-Exempt Status to Non-Profit Hospitals (December 1, 1997). Available at SSRN: https://ssrn.com/abstract=72252 or http://dx.doi.org/10.2139/ssrn.72252

Jean E. Harris

Pennsylvania State University - School of Business Administration ( email )

777 West Harrisburg Pike
Middletown, PA 17057-4898
United States
717-948-6157 (Phone)
717-948-6456 (Fax)

William J. Strouse (Contact Author)

Moffitt, Pease & Lim Associates, Inc. ( email )

4807 Charles Road
Mechanicsburg, PA 17055
United States
717-441-0536 (Phone)
717-731-8359 (Fax)

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