Tax exemptions and nonprofit hospitals: An uncertain future

Of the 4,926 community hospitals in the United States, the majority, about 58 percent (2,870) are not-for-profit. About 21 percent (1,053) are for-profit, and the remainder are owned by state and local governments. Hospitals serve communities by caring for the sick, but they’re also often billion dollar enterprises and tension between the mission and business model of nonprofit hospitals is growing.

Nonprofit hospitals are expected to benefit their community in exchange for their tax-exempt status. Hospitals have most commonly fulfilled this obligation by providing uncompensated care, or charity care. However, this has historically been poorly regulated. A 2013 study found that on average nonprofit hospitals spent 7.5 percent of their operating expenses on community benefit activities, and 85 percent of that was charity care. However, there was major variation in the amount allocated to community benefit, ranging from 1 percent to 20 percent.

The Affordable Care Act introduced new community benefit reporting requirements for nonprofit hospitals in an effort to bring more clarity and accountability to the amount and quality of “community benefits” delivered in exchange for 501(c)3 tax exemption. The value of the nonprofit tax exemptions for hospitals is significant: it was estimated at almost $25 billion in 2011. For states and municipalities in particular, the foregone tax revenue is nontrivial, especially as their taxes bases were squeezed by the burst of the housing bubble in 2008. It should be little surprise, then, that municipalities have started to scrutinize the tax exemptions for nonprofit hospitals.

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Interpreting Fiorina’s Comments on Vaccination Law

I’ve started writing for Forbes as a regular contributor. My first piece, Carly Fiorina Says Her Views On Vaccines Are Unremarkable; For Better Or Worse, She’s Right, analyzes GOP presidential candidate Carly Fiorina’s recent ad hoc remarks on the relative rights of parents and schools with respect to vaccinations and to some of the hyperbolic reactions to those remarks. Fiorina’s remarks are ambiguous, in ways that I discuss. But, as the title of the article suggests, and for better or worse, I think that the best interpretation of them places her stance squarely in the mainstream of current U.S. vaccination law. I end with a call for minimally charitable interpretations of others’ views, especially on contentious issues like vaccination.

Harvard U Effective Altruism presents: Derek Parfit discusses altruistic giving

PArfitFacebook RSVP

When: Tuesday, April 21, 6:00pm Where: Harvard campus, Science Center E

Oxford and Harvard philosopher Derek Parfit is described by Encyclopaedia Britannica as “the most important moral philosopher of the 20th and early 21st centuries”.  The New Yorker called his books “the most important works to be written in the field in more than a century.”  He will be discussing personal identity, future generations, ethics  and Effective Altruism in a fireside chat moderated by ethicist Nir Eyal, Associate Professor of Global Health and Population at the Harvard T.H. Chan School of Public Health.

This event is co-sponsored by Harvard University Effective Altruism (HUEA) and Harvard College Effective Altruism (HCEA), and is open to the public.

Do hospitals have a role in population health?

Population health advocates have identified health care providers, and hospitals in particular, as key allies in the effort to create better health and longer lives for Americans nationwide. Despite a growing interest in “community-based’ models of care, hospitals remain the most visible component of the US health care system. What’s more, hospitals are where the money, not to mention many of leading brains and cultural authority, reside. Of the 17.4% of GDP that the United States invests in health care, roughly 30% goes to hospitals – more than any other spending category. Hence why people interested in population health wish to have hospitals on board as they aim to address the always-challenging social, behavior and environmental determinants of health.

But the question remains open: do hospitals really have a role in the pursuit of population health?  Continue reading

Inaugural SG Global Chat: Harvard Effective Altruism Expanding to HSPH

SG Global Chat
Harvard Effective Altruism — Using Evidence and Reason to Maximize the Impact of Efforts to Make the World Better

October 8, 2014 12:30-1:20pm, Kresge G-2

Harvard Effective Altruism (HEA) is a student group at Harvard College and Harvard Business School. The group is dedicated to spreading the ideas of effective altruism to better the global community. Previous HEA speakers include Peter Singer, Nick Bostrom, Max Tegmark and Thomas Pogge. This year, HEA plans to became a Harvard University-wide student organization. Come to the first SG Global Chat of the year to hear more about HEA, the events the group has planned, and ways to get involved. Presented by Anders Huitfeldt (ScD Candidate in Epidemiology) and Eric Gastfriend (Student at Harvard Business School).

Light lunch provided. Any questions email studentgov at

Ebola Update: Why Don’t We Seem to Care?

By Deborah Cho

It’s been over half a year since the beginning of the current Ebola outbreak in West Africa, yet the number of cases and deaths from the disease continue to rise.  The total case count as of September 29, 2014 is 6,574 and total deaths are at 3,091.  Even so, the international response, as a whole, seems to be lacking.  As I lived near the Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia this past summer, I was acutely aware of the Ebola epidemic’s magnitude while it had the media’s attention.  The attention given was similar to that given to a car accident on the side of a road as onlookers drive on by without stopping to offer help.  Unfortunately, it was quite clear that aid efforts were woefully inadequate and that the disease would continue to spread rapidly without a stronger response.  It seemed that though our curiosity about this virus was at an all-time high, our national concern for the epidemic and its casualties were extremely minimal other than in the brief moments when we were faced with prospect of flying in two of our own infected citizens.  Continue reading

Harvard Effective Altruism: an event today, Michael Kremer on Sept. 10, and a fellowship opportunity

A message from Harvard Effective Altruism:

On Saturday, Sept. 6 at 3pm in Sever 111, we are holding a giving game / donation discussion and an information session for Harvard students interested in our organization. We’ll explain what effective altruism is and what HCEA does here on campus. If you’re new to HCEA, you should definitely check it out!

Wednesday, Sept. 10 at 4:30pm in Science Center Hall A: Prof. Michael Kremer – a development economist at Harvard – will give a talk entitled “How can individuals reduce global poverty?” He’ll discuss the ways that individuals can use both their money and their careers to contribute to poverty reduction and international development.

All semester long! HCEA is hosting its third Philanthropy Fellowship program for Harvard undergrads and graduate students. Fellows will attend talks from speakers like Harvard professor Steven Pinker, Rob Mather of the Against Malaria Foundation, and Center for Applied Rationality president Julia Galef; learn about effective altruism at weekly dinners with other fellows and speakers; get to know likeminded students at discussions and social events; and fundraise for effective charities! You can find more information and apply on our website before 11:59pm on Sunday, Sept. 14th.

We hope to see soon! Altruistically yours,
Ales and John

A Look at the ALS and Ebola Responses

By Deborah Cho

I’m a little late to this discussion, but I want to talk briefly about the ALS Ice Bucket Challenge and how we make our decisions on charitable giving.

I’m sure by now most readers understand the basic concept of the challenge: individuals can choose to either record a video of themselves pouring ice water over their heads or to donate money to the ALS Association (or both — the rules don’t seem to be particularly consistent in application).   After the challenge is undertaken, the video is shared on social media or a message is posted announcing that the individual has donated, and then the individual “nominates” others for the challenge.

This challenge has virtually taken over the web in the past couple weeks (perhaps, as one writer commented, because it lets participants “(a) exhibit his altruism publicly and (b) show off how good he looks soaking wet.”), raising over 88 million dollars as of August 26, 2014.  As expected, however, the challenge was not without its very vocal critics.  Many were opposed to the narcissistic nature of the challenge, while others, more relevantly, questioned donating so much money to a charity and to fight a disease based on an internet fad. Continue reading

Saturday, April 5th: Aid Grade! (from Harvard Effective Altruism)

A communication from Harvard Effective Altruism:


Hi altruists,

Saturday, April 5th is a big day for EA at Harvard: we have three different awesome events for you! Our guest for the day, flying up from DC for the occasion, will be Dr. Eva Vivalt, the founder of AidGrade. AidGrade helps figure out what works in international development by doing rigorous and engaging analyses of different interventions to find out their effects. They’re also looking for interns and full-time hires for this work, so please visit if you’re interested!

We’ll be having a talk on AidGrade’s research from 1-2pm, followed by a research-a-thon from 2-6 where we help AidGrade do some meta-analysis. The day will be topped off by a Boston-area effective altruism meetup at Clover–with another special guest, Jacob Trefethen of 80,000 Hours Cambridge UK, and many awesome local effective altruists.

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Harvard Effective Altruism: Josh Greene this Tuesday

Emotion, Reason and Altruism
with Professor Joshua Greene

Tuesday, March 11th, 7 PM,
Fong Auditorium, Boylston Hall
Why do people have radically different opinions as to who to help and how? How can we get along with people who seem to fundamentally disagree with us about what to want? Professor Josh Greene addresses this and more in Emotion, Reason, and Altruism.
Joshua Greene direct Harvard’s Moral Cognition Lab, which uses cutting edge cognitive neuroscience techniques to study how people actually make moral decisions, integrating thinking from philosophy, social science, and social psychology to address questions of why people disagree as much as they do, and what we can do about it.

Harvard Effective Altruism (HEA): Tuesday, 7pm–Professor “Mad Max” Tegmark on the Future of Life

HEA’s first talk of the semester promises to be a good one, in an area we haven’t covered much before: shaping the far future. In the footsteps of the Future of Humanity Institute, and Nick Beckstead‘s research on the altruistic importance of the far future, we present:


The Future of Life: a Cosmic Perspective


a talk by Professor Max Tegmark


Tuesday, March 4, 7 p.m.

Sever 202


Exploring how we humans have repeatedly underestimated not only the size of our cosmos (and hence our future opportunities), but also the power of our humans minds to understand it and develop technologies with the power to enrich or extinguish humanity.


Known as “Mad Max” for his unorthodox ideas and passion for adventure, his scientific interests range from precision cosmology to the ultimate nature of reality, all explored in his new popular book “Our Mathematical Universe”. He is an MIT physics professor with more than two hundred technical papers and has featured in dozens of science documentaries. His work with the SDSS collaboration on galaxy clustering shared the first prize in Science magazine’s “Breakthrough of the Year: 2003.”


International Aid, Public Health, and Corruption

My wonderful HLS colleague Matthew Stephenson has just launched the Global Anticorruption Blog (GAB). As it happens, his first two posts may be of interest to BOH readers, especially those  may be of interest to readers interested in international aid for public health projects, of the sort supported by the Gates Foundation.  The first post argues that the extent of corruption in these projects is much larger than the Gates Foundation and others acknowledge.  The second post contends that one reason for lowballing of corruption estimates is political: these projects depend substantially on public funding, and political support for health aid may be undercut by candid assessments of the extent of the corruption and fraud problems. Both the posts and the blog are well worth a read.

How Drug Samples Are Being Used to Fight the Good Fight

By Deborah Cho

I would highly recommend reading the Stanford Social Innovation Review’s recent article An Rx for Surplus Meds featuring the Dispensary of Hope, a brilliant model of providing prescription medications to those who need but can’t afford them.

In a nutshell, the Dispensary of Hope, a not-for-profit enterprise, collects unused medication samples from participating physicians and pharmacies across the country and redistributes those medications to safety-net health centers.  Those health centers can then prescribe these much-needed medications to patients who are unable to obtain them otherwise.  Since many of those medications would likely sit on shelves until they had to be discarded if they were not donated, this is beneficial to both the physician practices that no longer have to worry about proper drug sample disposal and also to safety-net health centers and their patients.

More specifically, participating physician practices and pharmacies simply fill with medications the boxes that are shipped to them by the organization and then ship the box back to the organization’s headquarters.  The organization’s staff and volunteers there do all the legwork necessary to properly inventory the drugs so that they can be distributed.  This way, time and effort required on the parts of these physician and pharmacy groups is minimal (not to say that their contribution is minimal – the Stanford article states that $14 million of sample donations were expected for 2013).  The organization thus provides a missing link, acting as an intermediary between the donors and the recipients to keep the supply constant and regular.

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Peter Singer on BatKid

This is worth a read, and, in my opinion, absolutely right.  The discussion is relevant to broader questions of identified v. statistical lives, as well as “choice architecture” questions about how charities ought to seek out donations.  Take a look:

Heartwarming causes are nice, but let’s give to charity with our heads

Full disclosure: Several years ago my family took advantage of a Make-A-Wish trip resulting from my younger brother’s leukemia.  He is now a thriving adult and doing great, and the experience was incredible, especially for those families with children facing terminal diagnoses.  But the fact remains that this really has to be seen as a “luxury” charity – and when faced with a stark side-by-side choice of where the dollars could be spent, Peter’s analysis nails it.

Progress is Possible in the Institutional Corruption of Healthcare

Today, there are two big stories that relate to the “institutional corruption” of medicine (aka conflicts of interests).  For those who have been working long and hard on these issues, they are cause for hope.  The needle does move.

First, one of the biggest pharmaceutical companies, GlaxoSmithKline, has decided that it will stop paying doctors to promote their drugs.   My prior work has shown that such payments are quite common (e.g., 61% of urologists and 57% of gastroenterologists taking money), and that they likely influence the prescribing decisions of the doctors who take such money.  In recent months, Glaxo has made several such moves towards greater transparency and integrity, often as a result of threatened or actual criminal prosecutions.  (See their newfound commitment to opening up their clinical trial data too.)

The NYT story quotes an industry consultant suggesting that the move to stop paying physicians is a result of the Affordable Care Act’s “sunshine” requirement that such payments will be disclosed, and that several other drugmakers are considering similar moves. I am a bit skeptical that the disclosure mandate had such an effect, since the disclosures were already required by Massachusetts and other states, and as part of the “corporate integrity agreements” that came of several federal prosecutions.  My sense is that such disclosures are not likely to reach patients in a useable way, so its hard to understand how the transparency could really impose much of a disincentive on the companies.  Yet, something has caused Glaxo to change course.

Second, the National Football League has decided to give the National Institute of Health $30 million to study brain injuries.  The counterfactual is that the NFL could have kept the money, of course.  But the more interesting alternative is that the NFL could have just spent the money itself, hand-picking the researchers and carefully specifying how the research should be performed, in order to buy the scientific conclusions that it preferred. This has been the classic strategy of industries facing litigation risk, from tobacco, to asbestos, and now the paper industry, whose law firm actually commissions scientific studies on its behalf.  The NFL’s move instead proves that it is possible for a self-interested party to nonetheless fund independent, credible, gold-standard research, by using an intermediary, such as the NIH.

This is exactly the sort of reform that I have called for, as an alternative to the false dichotomy between public funding and private interest. For companies that have a bona fide interest in discovering and publicizing the scientific truth, a credible intermediary like the NIH can reassure consumers of scientific information that it is valid.  Now, if only we can get big pharmaceutical companies to make the same move for their clinical trials and other scientific research studies.  Perhaps the first-movers will be the most innovative companies who have bona fide products and are tired of them being lost in the cheap talk?  If physicians making prescribing decisions continue to give greater credence towards NIH-funded research, such integrity could be rewarded.

 EDIT:  Corrected link to NFL story on NYT, and corrected amount from $100M to $30M.  Also, disclaimer: I am not involved in this Petrie Flom Center collaboration with the NFL, and the views expressed here are entirely my own.

HHIP: Evaluating Effective Charities – GiveWell cofounder Elie Hassenfeld: Tuesday, 8 PM

Harvard High Impact Philanthropy presents:

Evaluating Effective Charities with Elie Hassenfeld of GiveWell

How can you maximize the impact of your charitable giving?  What distinguishes the most effective causes and organizations? Elie Hassenfeld, co-founder and co-Executive Director of GiveWell, will describe how his organization is revolutionizing charity evaluation with completely transparent, rigorous analysis. Q&A to follow.

8 pm, Tuesday, Nov. 12; Sever 102

RSVP here

Elie Hassenfeld graduated from Columbia in 2004 and co-founded GiveWell in mid-2007 where he currently serves as co-Executive Director. GiveWell finds outstanding charity and publishes the full details of its analysis to help donors decide where to give. The Boston Globe has called GiveWell “The gold standard for giving” and its research has attracted attention from Peter Singer and other media. GiveWell has tracked over $10 million in donations to its recommendations as a direct result of its research.

HHIP: Friday, November 8: Peter Singer – Effective Altruism

Harvard High Impact Philanthropy presents:

Peter Singer on Effective Altruism

Effective altruism is a new movement consisting of many individuals and several independent organizations, all focused on the deceptively simple idea that we should try to do as much good as we can. The existence of this movement raises many interesting questions, both practical and philosophical, which this talk will discuss.

Friday, November 8th; 4 – 5 PM, in Science Center D

RSVP to the event

Peter Singer is the Ira W. DeCamp Professor of Bioethics at the Princeton University Center for Human Values and Laureate Professor at the Center for Applied Philosophy and Public Ethics at the University of Melbourne. He is well known for his philosophical work, as well as for his books – most recently including The Life You Can Save.
This event is co-sponsored by the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School, with support from the Oswald DeN. Cammann Fund, as well as Harvard’s Departments of Economics and Philosophy.

Prof. Singer will also speak on “Ethics and Animals: Where Are We Now?” at 12 PM in Austin 200 (Ames Courtroom), 1515 Massachusetts Ave.


Art Caplan: Heiress’ gifts to medical workers raise thorny ethical issues

Art Caplan has a new opinion piece at discussing the ethical issues raised by heiress Huguette Clark’s sometimes enormous gifts to the medical workers who cared for her while she lived in a New York hospital for over 20 years — despite being in good health.

[…] Clark’s favorite private duty nurse, Hadassah Peri, received more than $31 million in gifts during 20 years of service, including enough money to buy five homes, jewelry and other luxuries. Clark gave lavishly to Peri’s husband and children, too.

Other caregivers also got gifts, although not in those amounts. Still others got nothing. Was it ethical for those who got gifts to accept them?

Clark’s personal staff members were not the only ones with an eye on her fortune. The hospital where she lived pushed hard to get Clark to make a substantial gift, using their development staff to try to pry a promise from her, the book reports.

In 2004, Dedman and Newell write, hospital officials threatened Clark with having to move from her beloved room if she did not make a contribution of $125 million to forestall the sale of the building.

So what is the ethical deal?

Read the full article here.

Measuring Generosity

In Why the Rich Don’t Give to Charity, Ken Stern writes that with all the attention given to donations from wealthy people, “you would be forgiven for thinking that the story of charity in this country is a story of epic generosity on the part of the American rich. It is not.” Stern notes:

One of the most surprising, and perhaps confounding, facts of charity in America is that the people who can least afford to give are the ones who donate the greatest percentage of their income. In 2011, the wealthiest Americans—those with earnings in the top 20 percent—contributed on average 1.3 percent of their income to charity. By comparison, Americans at the base of the income pyramid—those in the bottom 20 percent—donated 3.2 percent of their income. . . . [S]ome experts have speculated that the wealthy may be less generous—that the personal drive to accumulate wealth may be inconsistent with the idea of communal support.

Of course, Stern’s argument requires us to view generosity in subjective terms. Given that the 80th percentile in income in the U.S. is about 5 times that of the 20th percentile, the top 20% is surely donating far more dollars than the bottom 20%.

So what is the best way to measure generosity? It depends. If you are deciding whether to focus your fundraising efforts on the top quintile or the bottom quintile, you should probably focus objectively on dollars and choose the top quintile. Similarly, if you are choosing a career and want to maximize your charitable giving, you should focus on your ability to give dollars even if doing so reduces the  fraction of  your total income you will later give.

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