Report asks: Do CT hospitals provide enough ‘community benefit’?

Hospitals’ Community Benefit Spending and the Sustainable Development Goals (SDGs)

Introduction

Hospitals with non-profit status receive major financial benefits from the federal and state governments, including relief from income, sales, and property taxes. In return, they must provide what’s known as “community benefit.”

But a new report raises questions about whether some hospitals are providing enough.

Community Benefits and the SDGs

Community benefits can come in several forms, including providing free and discounted care, accepting patients on Medicaid, conducting research and training health professionals. But it can also include spending on community services that address social determinants of health, like housing and food access.

According to the draft report published this week by the Office of Health Strategy, Connecticut’s non-profit hospital community benefit spending increased slightly from $1.6 billion in 2017 to $1.8 billion in 2022. However, the amount that non-profit hospitals spent on community benefits as a share of total expenses dropped from 15.8% to 11.8%.

The Impact of Rising Costs

When asked about the figures, Nicole Rall, a spokesperson for the Connecticut Hospital Association, said that hospitals have increased community benefit spending at a time when their costs have soared.

“The real story here is that hospitals grew their investments even as they faced unprecedented cost growth and during years when many hospitals had negative operating margins,” said Rall in emailed statements.

Transparency and Standardization Challenges

Among the key findings, the study’s authors noted that community benefit reporting lacks transparency and standardization, making it difficult to provide consistently accurate comparisons across facilities.

The Decline in Charity Care

The report revealed that free and discounted care provided by hospitals to income-eligible patients — known as charity care — decreased by 25%, or nearly $90 million, from $343 million in 2017 to $256 million in 2022.

“The decline in charity care is notable as it is the most historic community benefit, and a direct benefit people obtain from nonprofit hospitals that are organized and operated for a charitable purpose,” wrote the report’s authors. While conducting research or providing training programs for health professionals can absolutely provide indirect benefits, the impact of charity care is more concrete for patients.

The Impact of Bad Debt

Between 2016 and 2022, about $100 million of bad debt was attributable to individuals who would have qualified for charity care. But it’s unknown why those individuals didn’t receive financial assistance. For example, the services they used may have been exempt from the hospital’s charity care policy, or the patients may have not applied.

Rall, the spokesperson with CHA, attributes the increase in bad debt to the proliferation of high-deductible plans that leave patients underinsured. She stated the problem should be addressed by “tackling misleading and insufficient insurance coverage.”

Policies and Standardization

Financial assistance policies aren’t uniform across hospitals, which can make understanding eligibility difficult for consumers.

Each organization can determine income eligibility thresholds and, in certain instances, which services to cover. OHS found that, in some cases, the services covered differed even within a single hospital system.

Recommendations and Conclusion

The authors’ final recommendations included expanding community benefit reporting requirements to include the hospitals’ calculations, which could help OHS delve into causes for increases and decreases in spending. The agency also recommended expanding reporting requirements to include investments made in local health effects and community-based organizations.

The report also lays out considerations for how Connecticut can explore setting its own standards to address the lack of consistency in community benefits policies and reporting, including an example from Oregon where the state passed a law standardizing income limits for free care.

A bill currently under consideration by the legislature seeks to standardize certain elements of charity care, including implementing a universal financial assistance application and requiring hospitals to annually report the number of patients requesting financial assistance.

The Office of Health Strategy is accepting comments on the report through April 30.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 3: Good Health and Well-being
• SDG 10: Reduced Inequalities
• SDG 1: No Poverty
• SDG 2: Zero Hunger
• SDG 11: Sustainable Cities and Communities

The issues highlighted in the article are related to healthcare access, financial assistance, and social determinants of health, which align with SDG 3. The disparities in charity care and financial assistance policies also contribute to reduced inequalities (SDG 10) and poverty (SDG 1). Additionally, the mention of addressing social determinants of health like housing and food access connects to SDG 11 and SDG 2.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential healthcare services, and access to safe, effective, quality, and affordable essential medicines and vaccines.
• Target 10.2: By 2030, empower and promote the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.
• Target 1.3: Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.
• Target 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious, and sufficient food all year round.
• Target 11.1: By 2030, ensure access for all to adequate, safe, and affordable housing and basic services and upgrade slums.

These targets are relevant to the issues discussed in the article as they focus on achieving universal health coverage, reducing inequalities, implementing social protection systems, ending hunger, and ensuring access to adequate housing and basic services.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, there are indicators mentioned or implied in the article that can be used to measure progress towards the identified targets. These include:

• Percentage of community benefit spending as a share of total expenses (indicator for Target 3.8)
• Percentage change in charity care provided by hospitals (indicator for Target 3.8)
• Percentage of bad debt attributable to individuals who would have qualified for charity care (indicator for Target 3.8)
• Percentage of non-profit hospitals with eligibility thresholds for free care at 200% of the Federal Poverty Level (indicator for Target 1.3)
• Percentage of non-profit hospitals with eligibility thresholds for discounted care at 400% of the Federal Poverty Level (indicator for Target 1.3)
• Percentage change in charity care spending by hospital systems (indicator for Target 10.2)
• Percentage of hospitals with standardized financial assistance policies (indicator for Target 10.2)

These indicators can be used to measure progress towards the identified targets by tracking changes in community benefit spending, charity care provision, eligibility thresholds, and the standardization of financial assistance policies.

SDGs, Targets, and Indicators Table

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Source: ctmirror.org

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