Increasing Access to Health Care: Examination of Hospital Community Benefits and Free Care Programs‪.‬

For low-income, uninsured individuals who cannot afford to pay for their medical care, free care, also known as charity care, may be the only means to receive medical treatment. The problem is that the existence of this safety net is virtually unknown. Free care is medical care provided by a hospital without the expectation of payment. Sometimes it includes discounted services for patients who are able to pay some of the cost of their care (Community Catalyst, 2002). In exchange for this service, nonprofit hospitals are classified as charities and receive millions of dollars in tax benefits. This concept, with its roots in colonial charity and public responsibility concerns, was reflected in the first U.S. hospitals and embedded in those established by religious orders in the 18th and 19th centuries (Sultz & Young, 2001). An important piece of legislation that relates to the provision of free care is the 1946 Hospital Survey and Construction Act (P.L. 79-725), also known as the Hill-Burton Act, and its amendments, including the 1975 Public Health Service Act, initiation of a substantial compliance review process in the 1980s, and Charitable Facility Compliance Alternative (CFCA), which was added in the mid-1990s (Health Resources and Services Administration [HRSA], 2003). Under Hill-Burton some hospitals and other health facilities were provided money for construction and modernization. The facilities that received these funds agreed to provide a reasonable volume of services to people unable to pay and to make their services available to all people residing in the facility's area (HRSA, 2003). Granting hospitals 501(c)(3) nonprofit status is another mechanism designed to encourage the provision of charity care. Of the 4,915 U.S. community hospitals, 3,003, or 61 percent, are classified as 501(c)(3) nonprofit, tax-exempt organizations (American Hospital Association, 2002). These organizations enjoy significant financial advantages from their tax-exempt status. For example, Ott (2001) explained that