ORGANIZATIONAL BEHAVIOR AND MANAGEMENT: The Effect of Nonprofit Hospital Acquisitions on Hospital Community Benefit Spending

摘要

The Internal Revenue Service (IRS) has required nonprofit hospitals to document their community benefit spending in order to justify their tax exemption since 2009. This spending has potential to improve social welfare and should be considered, along with efficiency and prices of traditional hospital services, when evaluating the impact of acquisitions. Existing evidence links variation in spending to local needs, priorities of hospital boards, and financial performance. We hypothesize that independent hospitals have stronger ties to local communities than centralized hospital systems. Local leadership may translate into higher spending on community health improvement activities. Acquisition‐related changes in leadership may influence community benefit spending decisions to reflect the acquirer’s priorities, as well as changes that reflect financial performance. The rapid pace of nonprofit hospital consolidation has made independent hospitals increasingly rare, and the impact of nonprofit acquisitions on the level and type community benefit spending is unknown, despite the promising potential to improve social welfare. We aim to fill this gap.