My kids might have gone through a phase where they viewed my parental benefit as strictly financial. But my relationship to my family — both close and extended — and to my neighbors and community is complex. That’s the nature of relationships.
Ideally, hospitals have relationships with their communities beyond the care they deliver, including free or reduced-cost care. Those relationships differ by hospital or health system and by community.
When policymakers or well-meaning individuals involved in health policy talk about the community benefits of not-for-profit hospitals, charity care — a directly measurable financial benefit — is the most common unit of assessment.
Part of this assessment is derived from the IRS Form 990 Schedule H that requires hospitals to list their contributions to community benefit. The agency broadly defines community benefit as the unreimbursed or underreimbursed costs of direct patient care and also the costs of clinical services, research, education, and other investments that hospitals provide to patients and communities. While charity care is an important component of the benefit that hospitals provide to communities, it is narrowly defined and does not account for the full range of essential services offered by not-for-profit hospitals and health systems, particularly academic health systems.
Almost all not-for-profit hospitals are general, acute care institutions, which is a stark comparison to specialty specific hospitals that are nearly all for-profit. Only about half of for-profit hospitals offer general medical and surgical services, focusing instead on specific procedures and service lines—avoiding the costs of providing all types of care to a patient in a community. These specialty hospitals are often high quality and important providers of care but do not generally have the same approach to providing the array of services most commonly provided by not-for-profit institutions.
Teaching hospitals and other not-for-profit institutions also provide unique, highly complex, and critical services that may be unavailable elsewhere to patients. Yet, the investment required to provide these services is often unmeasured by critics or hospitals themselves.
My colleagues at the AAMC Research and Action Institute and I have developed a new data snapshot that examines the differences in services across health systems and hospitals. We did so in an attempt to better illustrate how some institutions disproportionately invest in services that are valued and needed by communities and policymakers but are not always defined or reimbursed as such.
Read snapshot: Clinical Benefits of Not-for-Profit Health Systems Beyond Charity Care
While highly specialized, resource-intensive services like Level I trauma care (which means a hospital can care for any injury in a community, from multicar accidents to gunshot wounds) are frequently cited as unique, costly contributions to care made by less than 5% of hospitals, other services are also critical to entire communities.
Our analysis found that not-for-profit hospitals were more likely than for-profit hospitals to offer a comprehensive list of health care services, including underreimbursed but critical services. For example, psychiatric services are offered by 28.3% of for-profit hospitals and 29.9% of not-for-profit hospitals but are provided by 54.3% of not-for-profit teaching hospitals.
Maternal care deserts are often cited as a major policy challenge by policymakers and community leaders and are another example of where not-for-profit, and particularly teaching hospitals, are much more likely to provide essential care: birthing rooms are offered by 55.3% of nonteaching hospitals but are provided by 81.4% of major teaching hospitals.
As policymakers consider cuts to these institutions — under changes to tax status or cuts to other subsidies — they need to consider how eliminating these investments in patient care services may affect patient care and health outcomes in their communities and beyond.
Not-for-profit and teaching hospitals need to demonstrate that their community benefit extends beyond the provision of free or reduced-cost care. But as scrutiny over decreasing charity care and the appropriateness of not-for-profit status grows, what's at stake for patients should also be considered.
As always, I welcome your feedback, advice, and insight.
Atul
