January 15, 2014
Data Driven: Gary Young shapes healthcare policy.
Gary Young, Director of the Center for Health Policy and Healthcare Research
Just as the Affordable Care Act (better known as “Obamacare”) takes effect, Gary Young’s landmark study on hospital spending has fueled a national debate over the amount of money U.S. hospitals devote to community healthcare.
The study, published in April in the New England Journal of Medicine, reveals wide disparities in the free services hospitals offer for preventive care and community health.
Young and his interdisciplinary team found that some hospitals devote more than 20 percent of their operating budget to community benefits, while others contribute less than 1 percent.
Young was also surprised to find there is no correlation between need and the community services offered by the local hospital. Young’s team had hypothesized that the spending disparity would reflect the amount of poverty in a community—that hospitals in wealthy communities spent little because there was less need, and hospitals in communities that have high poverty rates spent more. But his analysis of the data showed no correlation whatsoever.
Furthermore, even among hospitals with the highest spending levels, these benefits are unlikely to include preventive medicine and wellness education, the study shows.
The implications of Young’s research are profound. It raises questions about whether hospitals are, at least in part, charitable institutions that deserve tax-exempt status, or large corporations that get richer from tax breaks they don’t deserve.
“Some believe that there should be a closer examination of the appropriateness of tax exemption for these organizations, which are often billion-dollar enterprises,” says Young.
In fact, Young will help answer that question himself. The IRS recently appointed him to a two-year term on a committee charged with rewriting the rules governing how corporations qualify for tax-exempt status.