An evaluation of charity care for tax-exempt hospitals engaging in joint ventures.
The study examines whether the level of charity care and financial stability contribute to a nonprofit hospital's motivation for partnering with a for-profit hospital through a joint venture. The Internal Revenue Service (IRS) has heightened its scrutiny of joint ventures within the health care sector. Considering recent calls to investigate the merit of the tax-exempt status of hospitals engaged in joint ventures, this research will assist policy makers in the evaluation of nonprofit hospitals. Constituents will continue to question whether joint ventures contribute to a reduced focus on charitable activities. Results indicate that the propensity to engage in a joint venture significantly increases with increased levels of charity care. Furthermore, nonprofit hospitals with lower profitability are more likely to engage in joint ventures. These results are useful to policy makers when evaluating the level of charity care provided by hospitals seeking alternative strategic alliances. Considering many critics allege hospitals are reducing the provision of charity care to the community, it is imperative for management to be conscious of the impact of joint ventures on the provision of charity care.
Department of Accounting, College of Business, at the University of Texas at San Antonio, USA.
Pamela C
PC
Smith
D005377:Financial Management, Hospital / Q000191:economics; D006739:Hospital Administration / Q000379:methods* / Q000706:statistics & numerical data*; D006801:Humans; D007373:Interinstitutional Relations; D009939:Organizations, Nonprofit / Q000458:organization & administration; D019464:Tax Exemption; D017664:Uncompensated Care / Q000706:statistics & numerical data*