Reductions in Tax Incentives Potentially 'Devastating' to U.S. Healthcare

John Commins, for HealthLeaders Media , March 21, 2011

"More than 60% of fundraisers believe that tax code changes will reduce donations, and most predict that reduced funding will impede buying much-needed hospital equipment and paying for hospital improvements and expansions, during a time when our communities' healthcare needs are increasing and the demands on nonprofit hospitals continue to grow," said Chern, who is also president of White Memorial Medical Center Charitable Foundation in Los Angeles. "These concerns are being expressed by fundraisers who work on behalf of a wide range of healthcare institutions, including local community hospitals, medical centers, medical schools, children's hospitals, nursing homes and assisted living facilities."

Survey respondents talked about the domino effect on charitable fundraising that could come with tax code changes, the lingering impacts of the recession, and concerns over the implementation of the Affordable Care Act. One respondent wrote: "We have already experienced decreased giving from the effects of the economy and uncertainty over health care reform. This (tax code changes) would be another disincentive for people to give."

McGinly said most donors don't give because of a tax break, but that adverse tax consequences affect the amount of the gift. "This is especially true of major gifts and planned giving, where donors consider the impact on their tax liability," he said. "These tax code changes would compound the current fiscal problems that most nonprofit hospitals face, particularly for healthcare providers serving in-need communities, where in some cases nearly 50% of the patients rely on charity care or some form of assistance beyond what federal and state programs provide."

AHP is a not-for-profit organization whose more than 4,700 members direct philanthropic programs in 2,000 of North America's not-for-profit healthcare providers. The survey may be downloaded here.  

John Commins is a senior editor with HealthLeaders Media.

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