Measuring Healthcare Inequity How Tax-Exempt Hospitals in Los Angeles County Perpetuate Healthcare Disparities

Nonprofit hospitals receive substantial tax benefits, yet it is unclear whether they meaningfully serve the communities that subsidize them. This study investigates whether the distribution of nonprofit hospitals in Los Angeles County aligns with areas of greatest socioeconomic need and whether the patients they treat, measured by insurance status, reflect the demographics of surrounding communities. While urban healthcare disparities are well documented, much of the literature assumes that geographic proximity translates into equitable access. I find that this is not the case: hospitals located near one another can serve very different populations. To clarify the mismatch between proximity and actual service patterns, I first examine where nonprofit hospitals are located in relation to neighborhood need. Next, I conduct spatial-statistical analyses comparing each hospital’s share of Medicaid and privately insured patients to the demographics of its surrounding service area. Hospitals serving unhealthier areas appear more likely to exhibit high Medicaid intensity relative to the broader hospital market, while hospitals embedded in large multihospital systems concentrate privately insured patients. At the same time, the analysis shows that service-area insurance composition does not independently predict hospital insurance composition, suggesting that hospital insurance mix is not directly shaped by local demographic baselines. Finally, a brief document analysis of Community Health Needs Assessments and a UCLA strategic report illustrates how differing organizational structures and definitions of community may help explain divergent service patterns. Together, these analyses show a persistent mismatch between proximity and service provision, emphasizing the need for additional studies that theorize equity beyond geographic access and for stronger accountability mechanisms governing nonprofit hospitals’ tax-exempt status.