Charity Care

Distancing from Local Communities

Whether hoping to realize financial efficiencies or facing the prospect of closing, many single community-based nonprofit hospitals were absorbed into large multihospital healthcare systems. Subsequently, some hospitals with long and distinguished histories of service to their local communities not only lost their identities but also traded their links to the very communities that had supported and governed them. Instead, they were now managed by entities that were geographically distant and had anonymous corporate accountability and control. Having lost ties to their local communities, these hospitals began to suffer an erosion of credibility and trust. Distance and mistrust made nonprofit hospitals easier targets for those who questioned their charitable ethos when the move to efficiency seemed to supplant charitable services.

Movement toward Efficiency

Whether as members of large multihospital healthcare systems or as stand-alone healthcare facilities, many nonprofit hospitals tried to realize financial efficiencies by eliminating services that were deemed loss leaders or unable to make revenues. Some of these services, such as trauma centers, burn units, and maternity units, were often high profile and attracted large numbers of people who could not pay for primary or emergent healthcare services. Public perceptions, articulated by legislators, jurists, and for-profit hospital competitors, turned sour. In their efforts to generate revenue and serve as a business, nonprofit hospitals were seen as reneging on their charitable mission to the community and foisting additional healthcare costs for the medically indigent on already financially strapped communities.

...