Post From Expert Insights
This article originally appeared on Shelterforce on 1/25/2018.
Across the country, nonprofit hospitals are under intense scrutiny due to the discrepancy between the substantial revenues they generate compared to the level of support they provide to neighborhoods that surround them. Increasingly advocates, regulators, and legislators at the federal, state, and local levels are questioning whether nonprofit hospitals and health care systems are meeting their obligation to serve the community.
In exchange for their tax-exempt status, nonprofit hospitals are obligated to reinvest and engage in activities that benefit their respective communities. However, a recent article by Kaiser Health News on asthma in Baltimore found that “the perverse incentives of the health care payment system have long made it far more lucrative to treat severe, dangerous asthma attacks than to prevent them.” As a result, Johns Hopkins, the University of Maryland Medical Center, “and their corporate parents . . . have so far limited their community asthma prevention to small, often temporary efforts, often financed by somebody else’s money.”
There is no reason to believe that this is limited to hospitals in Baltimore.
Traditionally, hospitals have met community benefits obligations through activities such as charity care, research, and medical education as well as health fairs, blood pressure clinics, and other one-time events. With an expectation that more Americans would carry health insurance, reducing the need for charity care, the Affordable Care Act (ACA) expanded the definition of community benefit to include a broader range of “community building” activities, like funding affordable housing.
Photo by Kate Hannon via flickr, CC BY-NC-ND 2.0
Yet despite growing recognition of the social and environmental causes of poor health, hospitals have been slow to shift their community benefit spending away from traditional expenditures toward activities that address root causes of poor health, such as unsafe housing, environmental hazards, and limited access to healthy foods.
Although the transition from fee-for-service to value-based care is at an early stage, health systems have a variety of motivations to address the upstream determinants of health. Moving upstream aligns with their mission, can improve their reputation and competitiveness, and reduces the cost of unnecessary hospitalizations and emergency room visits.
Some leading-edge health institutions are looking outside their own walls to improve community healthhealth and are directing community benefit dollars and other resources to address the root causes of poor health in their respective communities. Examples include:
In the midst of profound change and uncertainty in health care, hospitals and health systems are searching for new ways to improve health outcomes. The community development sector has an opportunity to support the adoption and expansion of hospital participation in community investment activities.
Here are four ways community development leaders can engage with health institutions:
It is critical to deepen and accelerate pioneering health institutions’ investments upstream and light the path for others to follow their lead. By recognizing that making these investments not only aligns with their mission, but also has financial, strategic, and reputational benefits, hospitals can help address the root causes of poor health so that all people can reach their full potential and thrive.
The Center for Community Investment is launching a new initiative called Accelerating Investments for Healthy Communities, which aims to help leading health institutions deepen their investments in community health and well-being, with a particular emphasis on affordable housing. We look forward to sharing what we learn.
Cover photo by Alex Proimos via flickr, CC BY-NC 2.0.