An Uncertain Prescription: Are Tax Exemptions for Nonprofit Hospitals an Efficient Way to Fund Indigent Care?

4 Pages Posted: 17 Jul 2006

See all articles by Guy David

Guy David

University of Pennsylvania - Health Care Systems Department

Lorens A. Helmchen

The George Washington University

Abstract

Tax exemptions were introduced originally to compensate nonprofit hospitals for providing medical care to the poor. The fact that nonprofit hospitals traditionally provided the only place where the poor could turn for medical care does not imply that nonprofit hospitals are the only guarantors of medical care for today's indigent. Tax exemptions for nonprofit hospitals are just one of several alternatives that offer care to the poor. In this article, we propose that the net contribution of a nonprofit hospital to the community be assessed by examining whether the community would be better off if the nonprofit hospital were stripped of the legal provisions that differentiate it from its for-profit counterparts.

Keywords: Guy David, Lorens Helmchen, nonprofit hospitals, medical care, poor, indigent, medical alternatives, tax exemptions, indigent care, subsidies, Medicare, Medicaid, charity, An Uncertain Prescription

JEL Classification: D60, D61, H51, H53, I18, I38

Suggested Citation

David, Guy and Helmchen, Lorens A., An Uncertain Prescription: Are Tax Exemptions for Nonprofit Hospitals an Efficient Way to Fund Indigent Care?. Regulation, Vol. 29, No. 2, pp. 14-16, Summer 2006. Available at SSRN: https://ssrn.com/abstract=917197

Guy David (Contact Author)

University of Pennsylvania - Health Care Systems Department ( email )

3641 Locust Walk
Colonial Penn Center
Philadelphia, PA 19104-6358
United States

HOME PAGE: http://www.wharton.upenn.edu/faculty/david.html

Lorens A. Helmchen

The George Washington University ( email )

950 New Hampshire Ave NW
Washington, DC 20052
United States
2029943816 (Phone)
2029943816 (Fax)

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