What’s more, the I.R.S. allows hos­pi­tals to use broad def­i­n­i­tions of com­mu­nity ser­vice, including the value of tra­di­tional charity — care dis­pensed free or at a dis­count to those who cannot pay — and the money hos­pi­tals cal­cu­late they lose because Med­icaidreim­burses them less than their costs. Hos­pi­tals can also take credit for hosting health fairs, oper­ating some research labs and “donating” their exec­u­tives’ time to serve on local com­mu­nity boards.

Non­profit hos­pi­tals may have been founded on the basis of com­mu­nity need but that doesn’t mean they’re not very prof­itable,” said Gary Young, an author of the New Eng­land Journal of Med­i­cine article and a pro­fessor at North­eastern Uni­ver­sity. “Towns are hurting and they see this affluent insti­tu­tion in their midst on lots of land and say, ‘Hey, cough up some money. ”

Read the article at The New York Times →