As the public’s trust in the traditional healthcare system declines, nonprofit providers must do a better job of highlighting how they reinvest into the communities they serve, according to one health system CEO.
Rob Allen — CEO of Intermountain Health, which operates 33 hospitals and more than 400 clinics across six states in the Intermountain West — thinks that this could help rebuild Americans’ trust in healthcare, especially given the majority of the nation’s hospitals are nonprofit organizations.
He cited a recent Yale University study that found that over the past 20 years, 95% of for-profit hospital profits have gone to shareholders, whereas nonprofit hospitals’ earnings were reinvested into the community.
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“Every penny we generate beyond our cost of operation ultimately goes back into the community,” Allen stated in an interview earlier this summer. “If [nonprofit healthcare] went away, it would cause huge holes in people’s ability to access care and huge burdens on the government, frankly, to fund a lot of the things that systems like Intermountain are supporting.”
Allen noted that there’s a misconception that nonprofit hospitals don’t pay any taxes. He pointed out that Intermountain paid $469 million in taxes in 2023, including payroll and property taxes, and the health system received an estimated $362 million in tax exemptions.
In return, Intermountain provided $746 million in direct community work. This includes $220 million in charity care, with the rest funneled into broader community investments like housing and food security.
For example, Intermountain has helped fund the creation of more than 2,000 affordable housing units using low-return investments from its balance sheet. The health system invests millions into things like affordable housing, food access and transportation because these needs, while nonmedical, have a huge effect on health outcomes, Allen said.
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He noted that every three years, Intermountain engages with local community members across all the areas it serves to identify their top health priorities. This process is crucial for guiding the health system’s community investments, as it ensures services and resources are tailored to local needs.
Over time, regulations have developed to measure how nonprofit healthcare organizations meet their community obligations, especially in exchange for their tax benefits. The IRS Form 990 Schedule H is the current tool for tracking and reporting this work.
In Allen’s view, filing this form isn’t enough. He believes Intermountain and other nonprofit providers have to figure out how to increase the public’s awareness of their community reinvestments.
“When people need us, they should have confidence they can count on us,” Allen declared.
Photo: Viktor Cvetkovic, Getty Images