Executive Summary
The academy supports sustaining and building on institutional and regulatory policies to realize the goals of improved population health and greater health equity. In 2010, the Patient Protection and Affordable Care Act (ACA) modified community benefit requirements for nonprofit hospitals to support hospitals taking a broader view of community benefits. The law, and its interpretation in final rules of Internal Revenue Service (IRS) regulations (
Internal Revenue Service, 2014
), requires nonprofit hospitals to complete a triennial community health needs assessment (CHNA) and strategic plan to address identified community health needs. This change in the law invites possibilities for hospitals to fulfill community benefit obligations in ways that extend beyond a subsidy for direct care to address social determinants of health and emphasize prevention on a population level.Internal Revenue Service (IRS). (2014). Additional requirements for charitable hospitals; community health needs assessments for charitable hospitals. CRF Sec. 1.501 (R) (3). Fed. Reg. 78963. Retrieved from http://www.gpo.gov/fdsys/pkg/FR-2014-12-31/html/2014-30525.htm
Background
Since 1956, the federal government has linked nonprofit hospital tax-exempt status to a requirement for provision of charitable care. After the establishment of Medicare and Medicaid in 1965, and the subsequent diminished need for charity care, the requirements for hospital tax-exempt nonprofit status shifted to emphasize general community benefits (
Folkemer et al., 2011
), while still maintaining a focus on access to direct care (Internal Revenue Service, 1969
). The passage of the Patient Protection and ACA (Internal Revenue Service (IRS). (1969). Rev. Rul. 69-545. 1969–2C.B. 117. Retrieved from http://www.irs.gov/pub/irs-tege/rr69-545.pdf
Patient Protection and ACA, 2010
) has further decreased the need for charity care in hospitals as health insurance exchanges and expansion of Medicaid increased insurance coverage, thus creating an opportunity for greater investment in population-focused community benefit activities. Recent literature indicates that, although the tax benefit on nonprofit status for hospitals is large (Rosenbaum et al., 2015
), some nonprofit hospitals are making financial investments in their communities equal to or greater than the financial gains received by maintaining their tax-exempt status (Coyne et al., 2014
, Turner et al., 2016
). However, relatively few community benefit resources are directed to community health improvement, as compared with individual subsidies for direct care (Internal Revenue Service, 2015
, Internal Revenue Service (2015). Report to congress on private tax-exempt, taxable, and government-owned hospitals. Retrieved from https://www.vha.com/AboutVHA/PublicPolicy/CommunityBenefit/Documents/Report_to_Congress_on_Hospitals_Jan_2015.pdf
Singh et al., 2015
, Singh et al., 2016
, Young et al., 2013
). It is, nonetheless, notable that nonprofit hospitals have reported greater community health assessment and partnership activity than for-profit hospitals (Song et al., 2013
) and that nonprofit hospitals are identifying social determinants of health in CHNAs (Rosenbaum et al., 2016
).The ACA community benefits language (
Patient Protection and ACA, 2010
), and the related IRS regulations (Internal Revenue Service, 2014
) maintain that nonprofit hospitals must assess and respond to community health needs. However, there is no ultimate accountability for nonprofit hospitals to address and improve social determinants of health in communities. The requirement for CHNA and strategic planning to address identified community health needs could result in an expanded form of community investment. Social determinants of health, including environmental factors, such as food availability, housing, and transportation, have a greatly disproportional impact on population health (Internal Revenue Service (IRS). (2014). Additional requirements for charitable hospitals; community health needs assessments for charitable hospitals. CRF Sec. 1.501 (R) (3). Fed. Reg. 78963. Retrieved from http://www.gpo.gov/fdsys/pkg/FR-2014-12-31/html/2014-30525.htm
Isham et al., 2013
, Milstein et al., 2011
, Robert Wood Johnson Foundation, 2014
). A 2011 meta-analysis of 50 studies found that social factors, including education, racial segregation, social support, and poverty, accounted for more than a third of total deaths in the United States in a year (Galea et al., 2011
).To understand the extent to which commitments to fulfill nonprofit hospital community benefit requirements may serve as a lever to improve population health, three of the Academy's Expert Panels (Environmental and Public Health, Acute and Critical Care, and Building Healthcare Systems Excellence) sponsored a policy dialog at the October, 2015 “Transforming Health, Driving Policy” conference. This policy brief incorporates the outcomes of that policy dialog, and more recent developments, in terms of recommendations to maximize the effectiveness of the CHNA strategic planning and implementation process among nonprofit hospitals. Proposed recommendations share the long-term goal of improving the health of the public and promoting health equity.
Responses and Policy Options
The new community benefit laws require accountability by every nonprofit hospital for a CHNA process that engages community members and gains input from local public health experts (
Patient Protection and ACA, 2010
). At the same time, public health department accreditation through the Public Health Accreditation Board (PHAB) has advanced the measurement of public health department performance on standards designed to assure improvement and protection of the public across communities and states. Among the domains within the accreditation process is one that stresses the importance of public health department engagement with the broader community in community health assessment and the development of corresponding actions to improve public health (Public Health Accreditation Board, 2013
). This concurrence of PHAB accreditation requirements with nonprofit hospital community benefit requirements opens possibilities for shared accountability for community health and health equity as well as a leveraging of resources and expertise (Public Health Accreditation Board (PHAB) (2013). Public Health Accreditation Board standards & measures. Retrieved from http://www.phaborad.org/wp-content/uploads/PHSBSM_WEB_LR1.pdf
Laymon et al., 2015
, - Laymon B.
- Shah G.
- Leep C.J.
- Elligers J.J.
- Kumar V.
The proof's in the partnerships: Are affordable care act and local health department accreditation practices influencing collaborative partnerships in community health assessment and improvement planning?.
Journal of Public Health Management and Practice. 2015; 21: 12-17
Sampson et al., 2015
, Stoto and Ryan Smith, 2015
). In addition, opportunities exist to build multisectoral health partnerships (Robert Wood Johnson Foundation, 2017
) that create synergy around existing community development policy, such as Community Reinvestment Act regulations that support more equitable provision of financial lending (Board of Governors of the Federal Reserve System, 2014
). Effectively addressing critical health conditions facing the community requires a population-based approach that incorporates social determinants of health. Hospital collaboration with public health departments and other key community stakeholders may increase the resources focused on this approach and advance a paradigmatic shift to population health.The 2016 national elections brought leaders to the executive and legislative branches with an agenda of repealing and replacing the ACA. However, it is not expected that community benefit provisions of the ACA will be directly challenged. A more likely threat to the potential for community benefit to address social determinants of health is the indirect effect of broad losses in health insurance coverage, which would pull from those community benefit resources used for community health improvement to cover increases in uncompensated care.
The American Academy of Nursing's Position
Leveraging the most recent nonprofit hospital community benefit requirements under the ACA (
Patient Protection and ACA, 2010
) to engage health systems, public health departments, and community stakeholders in assessment, planning, and action for community health improvement is a policy issue of great interest to the academy. The academy's strategic plan includes a goal to build relationships and create collaborations with other organizations for a bigger impact on the societal determinants of health (American Academy of Nursing, 2017
; goal 3.4). Specifically, the academy recognizes the potential of community benefit reform to expand the focus of, and redirect the resources freed by, a decreased need for charity care toward supporting nonprofit health care delivery systems and other community stakeholders to collaborate to address upstream social determinants of health. Accordingly, the academy supports sustaining and advancing policies that leverage community benefit to improve population health and promote health equity through an upstream social determinants of health approach that includes:American Academy of Nursing (2017). 2017–2020 strategic plan. Retrieved from http://www.aannet.org/about/strategic-plan-2014-2017
- •Collaborative approaches to CHNAs and planning that will assure sharing of data across community health and public health systems;
- •Leveraging policy, ideas, and resources across systems to build capacity and take action to respond to identified community health improvement needs; and
- •Promoting measures in CHNAs, which capture prevention activities.
Recommendations
- 1.Add the voice of nursing leadership in addressing congressional leaders and the executive branch to support legislation that would result in maintenance of or increases in health insurance coverage, thus allowing for existing resources to be used for community health improvement via community benefit.
- 2.Raise awareness among health care activists and political actors of the potential for community benefit investments to address social determinants of health and improve population health long term.
- 3.Advocate to the IRS community benefit reforms that provide a stimulus to channel resources to those interventions that address underlying community health needs, emphasize prevention, and promote health equity.
- 4.Advocate to congress and the IRS complementary legislation and regulation to further incentivize nonprofit hospital system investment in improvement of upstream social determinants of health and prevention and to expand IRS regulations to address measurement of outcomes of community health improvement initiatives.
- 5.Sustain community health improvement activities through current nonprofit hospital community benefit approaches by encouraging the IRS to expand their definition of community health improvement to more explicitly include community-building activities.
- 6.Develop partnerships with the IRS and the American Hospital Association to collaborate on approaches to CHNA, planning, implementation, and ongoing measurement that share data and resources across health systems, incentivize collaboration with public health departments and community members, and stimulate creative and responsive multisectoral health partnerships.
- 7.Advocate to the Centers for Disease Control and Prevention (CDC), the IRS, and congress, support for development of systems of measurement and assessment that are sensitive to upstream social determinants of health and capture prevention activities.
- 8.Collaborate with the CDC, American Hospital Association, and American Public Health Association to support development of evidence-based recommendations for best practices in community benefit. Such practices might include mechanisms to promote healthy environments (e.g., access to healthy foods, parks, and walkable communities) and address such things as environmental exposures, firearm safety, violence, and school health policies.
Acknowledgments
The authors gratefully acknowledge the Academy's Expert Panels on Acute and Critical Care and Building Healthcare Systems Excellence in supporting this policy brief. Thank you to Academy staff Matthew J. Williams, JD, MA, who contributed to the research, review, and writing.
References
American Academy of Nursing (2017). 2017–2020 strategic plan. Retrieved from http://www.aannet.org/about/strategic-plan-2014-2017
- Community Reinvestment Act.2014 (Retrieved from)
- Charity care in nonprofit urban hospitals: Analysis of the role of size and ownership type in Washington State for 2011.Journal of Healthcare Management. 2014; 59: 414-427
- Hospital community benefits after the ACA: The emerging federal framework (issue brief).The Hilltop Institute, Baltimore, MD2011 (Retrieved from: http://www.hilltopinstitute.org/publications/HospitalCommunityBenefitsAfterTheACA-HCBPIssueBrief-January2011.pdf)
- Estimated deaths attributable to social factors in the United States.American Journal of Public Health. 2011; 101: 1456-1465
Internal Revenue Service (2015). Report to congress on private tax-exempt, taxable, and government-owned hospitals. Retrieved from https://www.vha.com/AboutVHA/PublicPolicy/CommunityBenefit/Documents/Report_to_Congress_on_Hospitals_Jan_2015.pdf
Internal Revenue Service (IRS). (2014). Additional requirements for charitable hospitals; community health needs assessments for charitable hospitals. CRF Sec. 1.501 (R) (3). Fed. Reg. 78963. Retrieved from http://www.gpo.gov/fdsys/pkg/FR-2014-12-31/html/2014-30525.htm
Internal Revenue Service (IRS). (1969). Rev. Rul. 69-545. 1969–2C.B. 117. Retrieved from http://www.irs.gov/pub/irs-tege/rr69-545.pdf
- Healthpartners adopts community business model to deepen focus on nonclinical factors of health outcomes.Health Affairs. 2013; 32: 1446-1452
- The proof's in the partnerships: Are affordable care act and local health department accreditation practices influencing collaborative partnerships in community health assessment and improvement planning?.Journal of Public Health Management and Practice. 2015; 21: 12-17
- Why behavioral and environmental interventions are needed to improve health at lower cost.Health Affairs. 2011; 30: 823-832
Patient Protection and Affordable Care Act. (2010). 42. Section 9007.
Public Health Accreditation Board (PHAB) (2013). Public Health Accreditation Board standards & measures. Retrieved from http://www.phaborad.org/wp-content/uploads/PHSBSM_WEB_LR1.pdf
- How multisector health partnerships evolve.2017 ([culture of health blog]. Retrieved from)
- Health policy brief: The relative contribution of multiple determinants to health outcomes.Health Affairs. 2014; (Retrieved from)
- Improving community health through hospital community benefit spending: Charting a path to reform.The George Washington University, Washington, DC2016
- The value of the nonprofit hospital tax exemption was $24.6 billion in 2011.Health Affairs. 2015; 34: 1225-1233
- A rural local health department-hospital collaborative for a countywide community health assessment.Journal of Public Health Management and Practice. 2015; 21: 23-30
- Hospital community benefit in the context of the larger public health system: A state-level analysis of hospital and governmental public health spending across the United States.Journal of Public Health Management and Practice. 2016; 22: 164-174
- Analysis of hospital community benefit expenditures' alignment with community health needs: Evidence from a national investigation of tax-exempt hospitals.American Journal of Public Health. 2015; 105: 914-921
- Hospital ownership and community benefit: Looking beyond uncompensated care.Journal of Healthcare Management. 2013; 58: 126-141
- Community Health needs assessment—aligning the interests of public health and the health care delivery system to improve population health.Institute of Medicine, Washington, DC2015 (Retrieved from)
- What should we expect? A comparison of the community benefit and projected government support of Maryland hospitals.Medical Care Research and Review. 2016; 73: 205-226
- Provision of community benefits by tax-exempt U.S. hospitals.New England Journal of Medicine. 2013; 368: 1519-1527
Article info
Identification
Copyright
© 2017 Published by Elsevier Inc.
