Strategic reporting by nonprofit hospitals: an examination of bad debt and charity care

• 成果类型: Article
• 署名作者: Beck, Amanda; Gilstrap, Collin; Rippy, Jordan; Vansant, Brian
• 署名单位: University System of Georgia; Georgia State University; University System of Ohio; University of Toledo; Johns Hopkins University; Auburn University System; Auburn University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-021-09624-6
• 发表日期: 2021
• 页码: 933-970
• 关键词: corporate social-responsibility; tax-exemption; cost

摘要

In this paper, we examine bad debt and charity care reporting by nonprofit hospitals around bond issuance. Given the tax advantages afforded to nonprofit hospitals, including the ability to issue tax-exempt debt, hospital managers encounter stakeholder pressure to provide community benefits. When nonprofits issue debt, they also face economic pressure to meet creditors' financial performance expectations. We document a reporting strategy that allows nonprofit hospitals to reduce the cost of bond debt while simultaneously alleviating regulators' and community members' concerns about inadequate provision of charity care. Using data from public bond issues for California nonprofit hospitals, we find that hospital managers shift costs from bad debt expense to charity care in periods prior to a public bond issuance and that the strategy is associated with a lower cost of debt. Our results inform those relying on accounting measurements to infer nonprofit hospitals' social good provisions and financial health.