New Hospital Community Benefit Briefs: Reporting Requirements and Community Building

Oct 18, 2012, 8:00 AM

Barnett-Somerville Kevin Barnett, Public Health Institute; Martha Somerville, Hilltop’s Hospital Community Benefit Program

To maintain their tax-exempt status, non-profit hospitals are required to provide measurable benefits to the communities they serve. Historically, hospitals’ community benefit activities have focused largely on the provision of charity care and other forms of uncompensated care. The Affordable Care Act (ACA) will expand health insurance coverage over time, which can be expected to reduce the need for hospitals to provide charity and reduced-cost care. The ACA’s community benefit provisions establish standardized federal community benefit reporting requirements that include community health needs assessments and health improvement plans for the communities they serve. In addition to establishing standard community benefit reporting requirements, the ACA also sets requirements and limitations on nonprofit hospital charges, financial assistance policies, and billing and collections practices.    

To help public health officials and policy-makers better understand the opportunity around the community benefit requirements in ACA, the Robert Wood Johnson Foundation and the Kresge Foundation funded The Hilltop Institute at UMBC—a health policy research center that focuses on the needs of vulnerable populations—to publish a series of issue briefs on best practices, new laws and regulations, and study findings related to community benefit activities and reporting.

NewPublicHealth caught up with Martha Somerville, JD, MPH, Hilltop’s Hospital Community Benefit Program Director, and Kevin Barnett, DrPH, MCP, Senior Investigator at the Public Health Institute, to discuss two new briefs on reporting requirements and community building, and what they add to the evolving field of hospital community benefit efforts to improve the health of communities.

NewPublicHealth: What are the two most recent community benefit briefs focused on, and what do you think they add to the dialogue around community benefits?

Martha Somerville: We think of them as companion briefs, and both of them are intended to contribute to the ongoing public discussion of the charitable practices of nonprofit hospitals. “Schedule H and Hospital Community Benefits, Opportunities, and Challenges for the States” discusses federal community benefit reporting requirements that IRS developed. Schedule H is valuable as a reporting framework and as an informational resource.

Community building is an area of community benefit reporting that’s still evolving, and that’s why we think of these as companion briefs because the other brief—“Community Building and the Root Causes of Poor Health”—focuses in on those community-building activities that go beyond the provision of health care services to focusing on upstream social, economic, and environmental factors such as employment, income, housing, community design, community safety, and the larger environment that are major contributors to population health. 

NPH: What is Schedule H, and how can the reporting requirement benefit public health?

Martha Somerville: Schedule H is the vehicle that nonprofit hospitals use to report to the IRS what they spend on the programs and activities that benefit their communities. They report on Schedule H the provision of free and discounted care, and also other activities that are intended to improve population health in their communities. They report their activities as well as the extent to which they engage their community in deciding on what community benefit activities the hospital will undertake.

Kevin Barnett: Schedule H dramatically increases the transparency of the work that hospitals are doing in this arena. For those that are doing good work, and there are a good number that are, it helps to highlight and validatethat work.

This transparency will encourage healthy competition between hospitals to improve practices; to be more deliberate, more geographically focused, and more evidence-based. It also presents an opportunity for broad spectrum of stakeholders to compare and contrast the activities and efforts of different hospitals.

This has to be the path of the future, not just for hospitals, but for other stakeholders.  This new era of transparency takes us a long way towards thinking more deliberately about how communities leverage the limited resources that are available.

NPH: What does the term community building mean in the context of community benefit?

Martha Somerville: The 2011 instructions for Schedule H specifically recognize that community-building activities can be reported as community benefit if they satisfy all the IRS criteria that define community benefits. Community building includes activities that are proactive, strategic investments in prevention, and that will reduce the burden of preventable illness. These activities address what is often referred to as social and economic determinants of health such as education, employment, income, housing, and social supports.  These are  community benefit activities that go beyond providing direct health care services.

NPH: What are the ways that community building can benefit the community’s health?

Martha Somerville: Better educated individuals and their children are more likely to live longer and healthier lives. Safe housing without physical or environmental hazards can support good health by preventing injury or chronic diseases like asthma. Children’s Hospital Boston, for example, has a program where they actually go into the asthma patients’ homes and give folks special vacuum cleaners and other tools that can help remove asthma triggers. That keeps children from having serious asthma attacks, keeps them out of the emergency room, and improves their quality of life. There are also community building programs that increase access to fresh food with, for example, farmer’s markets in food deserts, and others that create economic opportunities and transportation that create access to high-quality jobs. Those are all the kinds of activities that may not at first glance look like they’re health promoting, but they really are. Community building efforts focus on prevention, and ensure that people can be healthy in the places where they live, learn, work and play.

Kevin Barnett: There’s a mountain of research that clearly demonstrates the fundamental linkages between poverty and health.  Strategic investment by hospitals and other key stakeholders to address the underlying causes of persistent health problems is an important complement to traditional health education and promotion activities.   Community benefit provides a more structured way to move in this direction.  In the process, hospitals will build the population health capacity that will be needed to thrive economically in the future.   We’re not and should not be expecting that hospitals devote the lion’s share of their resources to low-income housing or job development or job creation. It’s more important that they’re thinking strategically about how to engage with other stakeholders who are investing in these ways, such as working with financial institutions to target community development investments. Hospitals can also use their considerable political power to coordinate with public health leaders and partners to advocate for health in transportation, housing, agriculture and other policies that have been shown to have an impact on health outcomes.

NPH: What are some strong examples of partnerships between hospitals and other community leaders to address the root causes of poor health?

Martha Somerville: One of the examples featured in the community building brief is the community health initiatives in Cincinnati Children’s Hospital Medical Center in Ohio. They’ve drawn in quite a few nontraditional community partners such as the Legal Aid Society to help tenants ensure their landlords make repairs to remediate unhealthy or hazardous conditions. Something else they’re doing that’s very innovative is using geo-coding technology to identify the areas of greatest need by mapping resident clusters that are associated with hospital admissions. They have identified clusters of readmitted asthma patients who all lived in substandard housing units that were owned by the same landlord, and that’s where the Legal Aid partnership came in.

Baltimore City Public Schools have a paid internship program with high school seniors to help them get work experience in a hospital setting. They can get academic credit towards training for allied health professions, and it helps them see a career path. It’s also useful in improving the health care workforce.

Kevin Barnett: Dignity Health provided early leadership in using geo-coding and linking it to socioeconomic metrics to direct their community benefit investments. They worked with a group called Solucient to develop a “Community Needs Index.” Not surprisingly they found much higher concentrations of  preventable emergency department and inpatient utilization in geographic communities with high rates of poverty, unemployment, and other related metrics. Of equal importance, they demonstrated an institutional commitment to reduce preventable ED [emergency department] and inpatient utilization by tying measurable reductions to  the annual salaries of the hospital leaders.

It’s no longer acceptable to simply say that we have noncompliant patients when they’re confronted with living in environments that present immense obstacles to desired health behaviors. Shifting the reimbursement structure will force us to think of how hospitals can work with a broad spectrum of community stakeholders and government agencies begin to more cost-effectively address these issues. We need to be able to ask the critical questions—not as a “gotcha” exercise, but to have a dialogue about how we do this work better; how we operate with the commitment to shared ownership for health in our community.

NPH: What are some trends or emerging challenges in community benefit that you will want to address in future research?

Kevin Barnett: There’s growing recognition that the incentives in health care are gradually shifting from conducting procedures and filling beds to keeping populations healthy. At the same time, we are expanding health insurance coverage into many communities where the conditions make it much harder to engage in the kinds of health behaviors that can prevent disease and bend the cost curve. That is driving hospitals and providers to look at how they can work with the broader spectrum of stakeholders to begin to address the underlying causes of health problems.

In the larger sense, we’re talking about  opening up the concept of what it means to be a hospital. It’s no longer acceptable to just be a physical site for the provision of acute medical services.  There is growing recognition of the need to see your hospital as a community leader, with shared responsibility to work with diverse local stakeholders and improve health and the community’s vitality. Increased hospital engagement will enable us to address health disparities in our communities in a more focused and evidence-based manner. There are many wonderful projects led by or supported by hospitals to date, but now there’s growing understanding of the need to take our efforts   to scale. It is an exciting time, but it is important to recognize that all this is occurring in the context of dramatic change and turmoil and financial struggles for hospitals as they gear up for full implementation of the ACA.  We’re asking them to really change the way they do business, and it’s important to find ways to work together in the spirit of collaboration and shared problem solving.

Martha Somerville: Another area we’re starting to explore is whether community health centers can help hospitals engage their communities, to help hospitals learn what the community’s health needs and priorities are, and to bring about in the community a sense of ownership of the health improvement initiatives that result. Federally-qualified  health centers (FQHCs) are located in medically underserved areas, and fifty percent of the membership of their governing bodies are people from the community. FQHCs are also required to conduct community needs assessments.We think that community health centers can have an important role to play in   hospitals’ identification of community health needs and priorities, as well as in devising strategies to address them.

>>Read more on hospital community benefit.

This commentary originally appeared on the RWJF New Public Health blog.