Internal Revenue Service Form Research Articles

How Do Payment Reforms Affect Hospitals’ Community Benefit Decisions?

In 2014, Maryland established a global budget policy, setting limits on hospitals’ spending and regulating reimbursement amounts. This study assesses whether the implementation of the policy changed the nature of hospitals’ community benefit activities. Using data from the Internal Revenue Service Form 990 Schedule H, we compared the community benefit trends of Maryland hospitals with those of a state control group and found some key differences. Maryland hospitals increased their spending on clinical services but not on broader community health improvement. Payment reform does have the potential to affect hospital investments to improve health, but more focused policies may be required for greater hospital involvement in nonmedical drivers of health.

Association of State Medicaid Expansion With Hospital Community Benefit Spending

Medicaid expansion was widely expected to alleviate the financial stresses faced by hospitals by providing additional revenue in the form of Medicaid reimbursements from patients previously receiving uncompensated care. Among nonprofit hospitals, which receive tax-exempt status in part because of their provision of uncompensated care, Medicaid expansion could have released hospital funds toward other community benefit activities. To examine changes in nonprofit hospital spending on community benefit activities after Medicaid expansion. This cohort study used difference-in-differences analysis of 1666 US nonprofit hospitals that filed Internal Revenue Service Form 990 Schedule H detailing their community benefit expenditures between 2011 and 2017. The analysis was conducted from February to September 2019. State Medicaid expansion between 2011 and 2017. Percentage of hospital operating expenditures attributable to charity care and subsidized care, bad debt (ie, unreimbursed spending for care of patients who did not apply for charity care), unreimbursed Medicaid spending, noncare direct community spending, and total community benefit spending. Of 1478 hospitals in the sample in 2011, nearly half (653 [44.2%]) were small hospitals with fewer than 100 beds, and nearly 70% of hospitals (1023 [69.2%]) were in urban areas. Among the 1666 nonprofit hospitals, Medicaid expansion was associated with a decrease in spending on charity care and subsidized care (-0.68 [95% CI, -0.99 to -0.37] percentage points from a baseline mean [SD] of 3.6% [4.0%] of total hospital expenditures; P < .001) and in bad debt (-0.17 [95% CI, -0.32 to -0.01] percentage points). There was an increase in unreimbursed spending attributable to caring for Medicaid patients (0.85 [95% CI, 0.60 to 1.10] percentage points; P = .04), which canceled out uncompensated care savings from the expansion. Noncare direct community expenditures decreased overall (-0.24 [95% CI, -0.48 to 0.00] percentage points; P = .049). Direct community expenditures remained more stable in small hospitals (-0.07 [95% CI, -0.20 to 0.05] percentage points; P =.26) compared with large hospitals (-0.37 [95% CI, -0.86 to 0.12] percentage points; P = .14) and in nonurban hospitals (0.02 [95% CI, -0.09 to 0.14] percentage points; P = .70) compared with urban hospitals (-0.36 [95% CI, -0.73 to 0.01] percentage points; P = .06). In this study, Medicaid expansion was associated with a decrease in nonprofit hospitals' burden of providing uncompensated care, but this financial relief was not redirected toward spending on other community benefits.

Transnational Nonprofits’ Social Media Use: A Survey of Communications Professionals and an Analysis of Organizational Characteristics

In response to rapid changes in the communication environment, nonprofits are increasingly relying on digital technologies to achieve their communication goals. We examine factors influencing nonprofits’ digital-based external communication based on a survey of communications directors at transnational nonprofits, with an analysis of each organization’s characteristics as described on its Internal Revenue Service (IRS) Form 990 and website. Our results show that, at the organizational level, nonprofits with stronger leadership support concerning social media activities were more likely to use different digital platforms and value more various functions of social media for external communication as compared with those lacking such support. At the individual level, communications directors’ perceived ease of social media use and time in their current position significantly influenced their emphasis on different functions of social media. This research fills a gap in the literature by analyzing both organizational characteristics and individual communications director’s attributes in assessing nonprofits’ social media use.

Association of Nonprofit Hospitals’ Charitable Activities With Unreimbursed Medicaid Care After Medicaid Expansion

In the United States, nonprofit hospitals receive tax-exempt status with the expectation that they provide a high level of benefit to local communities. Prior work has shown that Medicaid expansion reduced hospital spending on uncompensated care. To measure the association of tax-exempt hospital spending with community benefit and changes in uncompensated care after Medicaid expansion. This cohort study was performed using a difference-in-differences analysis (ie, a pre-post treatment-control design) to estimate changes in reported charitable categories associated with Medicaid expansion. Data from Internal Revenue Service form 990, Schedule H, tax filings for 2253 tax-exempt hospitals in the United States from 2012 to 2016 were used. Data were analyzed from June to November 2019. The proportion of the hospital's tax filing that spanned the period after Medicaid expansion. Hospital-reported spending on uncompensated care, unreimbursed Medicaid expenses, and other community benefit spending categories. Across 2253 hospitals, mean (SD) uncompensated care costs between 2012 and 2016 were $4.20 million ($8.80 million) and unreimbursed Medicaid expenses were $7.60 million ($18.62 million). Compared with tax-exempt hospitals in states that did not expand Medicaid, those in states that did expand Medicaid reported mean reductions in their provision of uncompensated care of $1.11 million (95% CI, $0.35 million to $1.87 million; P < .001), representing a mean change of -2% (95% CI, -6% to 2%; P < .001). These reductions have been offset by mean reported increases in the provision of unreimbursed Medicaid expenses of $1.63 million (95% CI, $0.31 million to $2.94 million; P = .02), representing a mean increase of 2% (95% CI, 1% to 4%; P = .01). Tax-exempt hospitals in states that expanded Medicaid reported no statistically significant mean increase in spending on other community benefit activities. In this study, large decreases in uncompensated care among tax-exempt hospitals associated with Medicaid expansion were not accompanied by increases in other reportable categories of community health benefit spending. Instead, they were accompanied by increased spending on unreimbursed Medicaid expenses.

State Laws and Nonprofit Hospital Community Benefit Spending.

To determine the association of state laws on nonprofit hospital community benefit spending. We used multivariate models to estimate the association between different types of state-level community benefit laws and nonprofit hospital community benefit spending from tax filings. All 50 US states. A total of 2421 nonprofit short-term acute care hospital organizations that filled an internal revenue service Form 990 and Schedule H for calendar during years 2009-2015. Between 2009 and 2015, short-term acute care hospitals spent an average of $46 billion per year in total, or $20 million per hospital on community benefit activities. Exposure to a state-level community benefit law of any type was associated with an $8.42 (95% confidence interval: 1.20-15.64) per $1000 of total operating expense greater community benefit spending. Spending amounts and patterns varied on the basis of the type of community benefit law and hospital urbanicity. State laws are associated with nonprofit hospital community benefit spending. Policy makers can use community benefit laws to increase nonprofit hospital engagement with public health.

Are community health centers' chief executive officers' compensation related to clinical performance?

Most research of chief executive officer (CEO) compensation in the health care industry has been limited to hospitals. This study expands our knowledge of CEO compensation into the nonhospital areas of the industry, specifically community health centers (CHCs). CHCs are safety-net providers that are an integral part of the U.S. health delivery system for medically underserved populations. Since the passage of the Patient Protection and Affordable Care Act, the federal government has created financial incentives for CHCs to improve care through access and quality performance criteria. To promote quality improvement, CEOs need to set their organization's priorities. One method used to achieve this goal is to tie the CEO's compensation to the organization's quality performance. However, there is a gap in our knowledge if CHCs' CEOs compensation is associated with quality performance outcomes. The primary aim of this study was to examine the relationship between clinical performance and CEO compensation in CHCs. Agency, social comparison, and managerial power theories guided this research, which examines the relationship of clinical performance and CEO compensation. Secondary data on Uniform Data System's CHC clinical performance combined with CEO compensation from Internal Revenue Service Form 990 were analyzed using generalized estimating equations with state and year fixed effects on a national sample of section 330 grant-funded CHCs (N = 984) for the period 2011-2016. We found no evidence that clinical performance was associated with CHCs' CEO compensation. Except for race, all other CEO characteristics were positively associated with CEO compensation and in line with previous research. We found that non-White CEOs were compensated more than White CEOs. In addition, further subanalyses revealed that an increase in the highest paid employees' compensation was associated with an increase in CEO compensation. The findings of this study can assist Health Resources and Services Administration improve its assessment policies in funding allocation to CHCs, as well as help board members make informed decisions regarding tying CEO compensation to predetermined performance metrics.

The impact of accounting regulation on non-profit revenue recognition

PurposeThe purpose of this paper is to examine the requirement that non-profit organizations recognize unconditional promises to give as assets and revenues in the year promises are received as mandated by Statement of Financial Accounting Standards (SFAS) No. 116.Design/methodology/approachUsing the adoption of SFAS No. 116 and financial information reported on Internal Revenue Service Form 990, the study examines the requirement that non-profit organizations recognize unconditional promises to give as assets and revenues in the year promises are received. Combining insights derived from a model developed by Dechow, Kothari and Watts (1998) with the rationale applied by the Financial Accounting Standards Board (FASB) in mandating recognition treatment, it adopts the view that information about promises to give is relevant if it useful in assessing probable future cash inflows. The study also employs relative tests of predictive ability to assess competing specifications.FindingsThe study finds that recognizing unconditional promises to give as assets and as revenues in the year received improves predictions of next period’s cash inflows. It also finds that accrual-based contribution revenue consistently provides information content that is incremental to cash-based contribution revenue.Research limitations/implicationsThis paper has implications for several other lines of research as well. First, an ancillary concern expressed by many organizations in the non-profit sector was that the recognition of multi-year promises to give would adversely affect trends in long-term giving. In this regard, another promising line of inquiry would be to empirically test the Standard’s impact on the time-series properties of contributions and short- and long-term giving trends. Second, future research might consider conducting tests after partitioning by NTEE/NAICS classification, as well as substituting or supplementing the SOI data with financial statement data. Third, future research might consider applying the approach used in this study to other industries or groups for which market prices are not readily ascertainable. Data constraints, including the calculation of cash flow information indirectly from the balance sheet, impose limitations on this study.Practical implicationsThis study documents that by recognizing unconditional promises to give as assets and revenues in the period received, donors, creditors and other users gain useful information about probable future cash inflows – a fundamental element of the accrual process and one of several important factors used to evaluate an organization’s ability to sustain future operations. This information is valuable to stakeholders and practitioners who rely on this information to make informed decisions. It is also helpful to standard setters in establishing guidelines that improve the usefulness of financial reporting for non-profits.Originality/valueThe paper contributes to existing literature by operationalizing, in a non-profit setting, a model that describes the relationship among revenues, accruals and cash flows. It fills a gap in the accrual literature regarding the relevance of non-profit revenue accruals. The study is the first to employ a relative information content approach to assess non-profit standards, which provides useful input to policy makers and end users. It affirms that many of the key conventions and elements embodied in the FASB Concepts Statements apply to non-profits as well, which heretofore has not been studied extensively. The results are also consistent with Accounting Standards Update 958, Not-for-Profit Entities, which requires that non-profits provide users with information about liquidity, including how they manage liquid resources needed to meet cash requirements for general expenditures within one year of the date of the statement of financial position.

Determinants of Community-Related Expenses of US Tax-Exempt Hospitals, 2013.

Tax-exempt hospitals in the United States are required to report community benefit expenses on their federal tax forms. Two categories of expenses critical to the public health mission of hospitals are the "community health improvement" and "community-building" expense categories. The community health improvement expenses formally qualify as a community benefit, whereas community-building expenses do not. Increasing both types of spending would be consistent with the growing evidence on the effects of social determinants on population health. To identify characteristics associated with the level of community health improvement and community-building expenses reported by tax-exempt hospitals. The general acute care hospital is the unit of analysis. We utilize secondary data for all US general acute care hospitals that filed their own Internal Revenue Service Form 990 Schedule H for 2013 (n = 1508). We apply linear regression analysis to an explanatory model with 8 independent variables. The primary dependent variables are percentage of operating expenses devoted to community health improvement and to community building. The independent variables include 4 hospital-level measures, 3 county-level measures, and a measure of state requirements for community benefit. The level of community health improvement expenses is positively associated with bed size, system membership, profit margin, and urban location. In states where tax-exempt hospitals are required to demonstrate community benefit to the state, there is lower community health improvement spending. Teaching hospitals also demonstrate lower community health improvement spending. Results for community-building expenses mirror those for community health improvement except that teaching hospital status and per capita income lose significance and hospital competition gains significance in the negative direction. Leaders among tax-exempt hospitals in community-related spending are hospitals that are larger, more profitable, members of systems, and located in urban areas and in states that do not have community benefit requirements.

Joint Community Health Needs Assessments as a Path for Coordinating Community-Wide Health Improvement Efforts Between Hospitals and Local Health Departments.

To examine the association between hospital-local health department (LHD) collaboration around community health needs assessments (CHNAs) and hospital investment in community health. We combined 2015 National Association of County and City Health Officials (NACCHO) Forces of Change, 2013 NACCHO Profile, and 2014-2015 Area Health Resource File data to identify a sample of LHDs (n = 439) across the United States. We included data on hospitals' community benefit from their 2014 tax filings (Internal Revenue Service Form 990, Schedule H). We used bivariate and multivariate regression analyses to examine LHDs' involvement in hospitals' CHNAs and implementation strategies and the relationship with hospital investment in community health. The LHDs that collaborated with hospitals around CHNAs were significantly more likely to be involved in joint implementation planning activities than were those that did not. Importantly, LHD involvement in hospitals' implementation strategies was associated with greater hospital investment in community health improvement initiatives. Joint CHNAs may improve coordination of community-wide health improvement efforts between hospitals and LHDs and encourage hospital investment in community health improvement activities. Public Health Implications. Policies that strengthen LHD-hospital collaboration around the CHNA may enhance hospital investments in community health.

Do donors respond to discretionary accounting information consolidation?

PurposeThe purpose of this paper is to investigate donor responses to discretionary accounting information consolidation. Nonprofit (NP) financial statement consolidation discretion significantly impacts program ratio reporting, the primary NP performance measure. Stakeholders are misled to allocate limited resources inefficiently. While some NPs file group Internal Revenue Service (IRS) Form 990 returns with their affiliates, effectively providing consolidated statements, others choose to file independently of their affiliates.Design/methodology/approachThe authors use OLS regression analysis and panel data for 5,697 NP-year observations for the period 2009-2011 retrieved from the National Center for Charitable Statistics Form 990 database.FindingsThe authors find evidence that consolidation discretion substantially impacts donor decisions. NP managers have incentive to utilize consolidation discretion to influence charitable giving.Practical implicationsThe authors urge the IRS and the Financial Accounting Standards Board to reconsider the consolidation guidance for NP organizations, to develop performance measures beyond the widely used program ratio, and to require program ratio segment reporting to allow for better comparability among NPs irrespective of consolidation status. Further, the authors caution stakeholders to consider supporting organization transactions in their resource allocation decisions.Originality/valueThe authors are the first to use NP supporting organization information to investigate consolidation discretion and its impact on donor responses.

The Effects of Capital Campaigns on Local Nonprofit Ecologies

When charities launch capital campaigns, they hope to attract large amounts of resources in a relatively short period of time; however, other charities in the area are likely to see such campaigns as disruptive to the natural distribution of resources to area nonprofits by disproportionately directing area donations to a single organization. This study seeks to understand the effects capital campaigns have on both the fundraising performance of other nonprofits and the makeup of a local nonprofit ecology. The analysis uses data from a randomly sampled set of nonprofit arts organizations that had capital campaigns for facilities projects between 1994 and 2007 and Internal Revenue Service Form 990 data on 501 (c) (3) nonprofit organizations in each county. The results illustrate that a capital campaign positively affects the fundraising performance of other charities in a local nonprofit ecology, but that campaigns decrease the size of a local nonprofit ecology.

Comparing the Value of Nonprofit Hospitals’ Tax Exemption to Their Community Benefits

The tax-exempt status of nonprofit hospitals has received increased attention from policymakers interested in examining the value they provide instead of paying taxes. We use 2012 data from the Internal Revenue Service (IRS) Form 990, Centers for Medicare and Medicaid Services (CMS) Hospital Cost Reports, and American Hospital Association’s (AHA) Annual Survey to compare the value of community benefits with the tax exemption. We contrast nonprofit’s total community benefits to what for-profits provide and distinguish between charity and other community benefits. We find that the value of the tax exemption averages 5.9% of total expenses, while total community benefits average 7.6% of expenses, incremental nonprofit community benefits beyond those provided by for-profits average 5.7% of expenses, and incremental charity alone average 1.7% of expenses. The incremental community benefit exceeds the tax exemption for only 62% of nonprofits. Policymakers should be aware that the tax exemption is a rather blunt instrument, with many nonprofits benefiting greatly from it while providing relatively few community benefits.

Factors Impacting Market Concentration of Not-for-Profit Hospitals

We attempt to identify and evaluate the association between key characteristics of not-for-profit (NP) hospitals and market concentration, as measured by the Herfindahl–Hirschman Index, using data available from the American Hospital Association, the Centers for Medicare and Medicaid Services, and the Internal Revenue Service Form 990. Our goal is to provide decision support to policy makers on factors that contribute to market competitiveness, which has been linked to improvements in efficiency, costs, and access to health care. We find that contributions are positively associated with market concentration. This could indicate that well-run NP hospitals (that deliver on their mission) are rewarded both financially (through increased contributions) as well as with increased market share. We also find that a higher percentage of Medicare patients is positively correlated with market concentration (i.e., reduces the competitiveness of the NP market). This could be explained by the fact that Medicare reimbursement rates are generally lower than those paid by private insurers (approximately 80%); thus, hospitals might not necessarily choose to operate in areas with high Medicare populations. Further, median income is negatively associated with market concentration. One explanation for this effect could be the fact that a population with a higher median income is in a better position to pay for services, making them attractive to hospitals as a potential market. Finally, we find that the presence of managers with voting rights on the boards of directors has no significant impact.

Understanding Nonprofit Financial Health

Using Internal Revenue Service Form 990 information for all filing 501(c)(3) organizations from 1998 to 2003, this article explores the organizational and environmental factors that affect nonprofit financial health in two subsectors—human services and higher education. The results yield three noteworthy findings. First, theory and empirical data converge when four commonly used financial indicators are combined to form a single financial health construct. Second, accounting measures and revenue variables are not as clearly related to financial health as the literature suggests. Third, environmental variables including macroeconomic factors (gross domestic product and state product), community factors (median household income), as well as a nonprofit’s financial prominence in their policy area (revenue share) are strong predictors of nonprofit financial health. This research contributes to the literature in several ways, most notably by incorporating a more open-systems approach to the study of nonprofit financial health with the inclusion of several environmental variables.

Why So Many Measures of Nonprofit Financial Performance? Analyzing and Improving the Use of Financial Measures in Nonprofit Research

Financial measures provide an empirical basis from which nonprofit researchers and practicing managers can approximate organizational capacity, financial health, and performance. These measures are used in nonprofit research to predict organizational activities and funding opportunities. Yet, little empirical evidence exists to tell us what these measures assess and whether they capture underlying concepts in the way we assume. Using Internal Revenue Service (IRS) Form 990 data, this article explores the following research question: Can accounting measures be organized into theoretically intuitive and empirically defensible constructs? To answer this question, a literature review of nonprofit financial health studies and textbooks was conducted, and dimension reduction techniques were employed. The findings suggest that the answer to the research question is not as simple as expected, and we should exercise more caution in how we use financial measures in nonprofit research.

Nonprofit Financing to the Rescue? The Slightly Twisted Case of Local Educational Foundations and Public Education in New Jersey

Scholars have suggested myriad characterizations of the relationship between organizations of the nonprofit sector and government. We expand upon Young’s “slight twist” of the economic supplementary view of government/nonprofit partnership to develop a model to explain the variation in levels of funding by local educational foundations (LEFs) in New Jersey public school districts. Seeking to better understand this private financing of public education, we empirically test for correlates of these funding variations using Internal Revenue Service (IRS) Form 990 data. Although we could not empirically verify an inverse relationship between state aid to education and level of LEF granting, we did find some evidence of a direct relationship between such private financing and median household income. Our analysis supports a more historically nuanced explanation of the role of LEFs in New Jersey public education.

Fraud and Corruption in U.S. Nonprofit Entities

The charitable sector is vulnerable to fraud losses, with these losses negatively impacting the organization’s reputation, future funding, and ability to advance its mission. Research on nonprofit fraud is relatively scarce, due mainly to limited availability of data. We create a database that summarizes and describes basic facts (nature and timing of fraud, description of organization, magnitude of loss, and perpetrators) for 115 incidents of detected fraud occurring in U.S. nonprofit organizations. We find a disproportionately high incidence of nonprofit fraud in the Health and Human Services National Taxonomy of Exempt Entities Groups, a high percentage of females committing misappropriation frauds, and that the organizational role of the perpetrator is related to the size of the fraud loss. We also investigate whether organizations detecting a nonprofit fraud report this information, as required, on Internal Revenue Service Form 990, and find that many organizations do not comply.

A Comparative Study of Financial Data Sources for Critical Access Hospitals: Audited Financial Statements, the Medicare Cost Report, and the Internal Revenue Service Form 990

Medicare cost reports (MCR), Internal Revenue Service form 990s (IRS 990), and audited financial statements (AFS) vary in their content, detail, purpose, timeliness, and certification. The purpose of this study was to compare selected financial data elements and characterize the extent of differences in financial data and ratios across the MCR, IRS 990, and AFS for a sample of nonprofit critical access hospitals (CAHs). Line items from AFS of 47 CAHs were compared to data reported in the hospitals' MCR and IRS 990s. Line items were based on 9 financial indicators commonly used to assess hospital financial performance. Of the indicators examined, the equity financing ratio most frequently matched between the 3 reports, while salaries and benefits to total expenses and debt service coverage were often different. Variances were driven by differences in individual account balances used to construct the ratios. Relative to AFS, cash was frequently lower on the IRS 990 while marketable securities and unrestricted investments were often higher. Other revenue and net income were consistently lower on the MCR and IRS 990, and depreciation was often higher on the MCR. The majority of total assets and fund balance (equity) values matched across the 3 reports, suggesting differences in classification among detailed accounts were more common than variances between the component totals (total assets, total liabilities, and fund balance). Health policy researchers should consider the impact of these variances on study results and consider ways to improve the availability and quality of financial accounting information.

Should You Join a Nonprofit Board? Investigate Before You Make a Decision

It is considered an honor to serve on the board of a nonprofit, whether it be an educational institution or another type of organization. But, as in most everything else in life, it pays to do your homework. First and foremost, be sure that you have the time to devote to service on the board. Bear in mind that attendance at board meetings is (or should be) only the half of it. Board members frequently are appointed to committees, and those committees meet and do a fair amount of work apart from the formal meetings of the full board. It goes without saying that you should strongly support the mission of the institution whose board you join and be willing to devote time, energy, and resources (often financial) to it. As much as you think you may know about the nonprofit on whose board you wish to serve, there is an online resource that can help you learn about it, especially its financial status. The website of Guidestar.org offers free access (after registration) to an online search engine that supplies information on nonprofits. Especially helpful is the link to the Internal Revenue Service Form 990 that nonprofits file each year. A close look at this online information, and scrutiny of the 990s from past years to the present, will give you an excellent picture of the financial situation, the salary structure, and the philanthropic profile. For instance, if you look at two or three 990s before the most recent one and can do some basic calculations, you can calculate the burn rate of an institution. If it seems that the nonprofit's administration is burning through the cash and not replacing it with donations and other revenue sources, a red flag should go up. It may be time to think carefully about joining the board of a mismanaged organization. It also pays to investigate the current administration of the nonprofit. News reports in recent years have been rife with accounts of financial shenanigans and sometimes outright fraud by higher-ups in nonprofits, an area of corporations that the government used to all but ignore. That has changed, and every year or so an eminent organization finds itself in the throes of financial difficulty or scandals that may even become criminal in nature. Meet with members of the administration and gauge their trustworthiness, business acumen, and track record. Ask about how regularly the meetings are held, inquire about term limits (a best practice that some too-cozy nonprofits ignore), and insist upon a full disclosure of all pertinent details. After all, if your service is being solicited, you have the right to know and the absolute duty to inquire. If you receive no cooperation in your inquiries, gracefully excuse yourself and vow not to contribute to that organization again! If your investigation turns out more positively, be sure to ask these questions: Does the board have a conflict of interest policy? If so, how is it policed and enforced? What type Editor’s Note:

The impact of the individual mandate and Internal Revenue Service Form 990 Schedule H on community benefits from nonprofit hospitals.

In response to a growing concern that nonprofit hospitals are not providing sufficient benefit to their communities in return for their tax-exempt status, the Internal Revenue Service (IRS) now requires nonprofit hospitals to formally document the extent of their community contributions. While the IRS is increasing financial scrutiny of nonprofit hospitals, many provisions in the recently passed historical health reform legislation will also have a significant impact on the provision of uncompensated care and other community benefits. We argue that health reform does not render the nonprofit organizational form obsolete. Rather, health reform should strengthen the nonprofit hospitals' ability to fulfill their missions by better targeting subsidies for uncompensated care and potentially increasing subsidized health services provision, many of which affect the public's health.