Changes in Teaching Hospitals' Community Benefit Spending After Implementation of the Affordable Care Act

Pharmaceutical Purchasing: a Review of the Landscape and Implications for Antidotal Therapies

The management of the poisoned patient often requires the utilization of uncommonly used pharmaceutical interventions. These interventions can be associated with significant costs to both the patient and treating institution. Pharmaceutical supply shortages and issues with accessibility of antidotal therapies complicate the management of many toxic exposures. These challenges are an inherent property of the pharmaceutical purchasing infrastructure in the United States, which is a complicated network of public and private intra-institutional agreements. The cost and availability of any given therapy is dependent on the individual contracting agreements between the treating institution, payer, pharmacy benefit manager, manufacturer or wholesaler, and in some cases a specialty pharmacy. Small or remote hospitals may experience greater challenges related to insufficient patient volume to achieve predicable prescribing patterns of rare and expensive medications, necessitating consignment purchasing arrangements. Although pharmaceutical costs are the focus of recent legislative attention, these reforms are not expected to significantly alter the cost or availability of antidotal therapies.

Provision of Social Care Services by US Hospitals

Policy Points Hospitals address population health needs and patients' social determinants of health by offering social care services. Tax-exempt hospitals are required to invest in community benefits, including social care services programs, though most community benefits spending is toward unreimbursed health care services. Tax-exempt hospitals offer about 36% more social care services than for-profit hospitals. Among tax-exempt hospitals, those that allocate more resources to community benefits spending offer more types of social care services, but those in states with minimum community benefits spending requirements offer fewer social care services. Policymakers may consider specifically incentivizing community benefits expenditures toward particular social care services, including linking tax exemptions to implementation, utilization, and outcome targets, to more directly help patients.

CONTEXT

Despite growing interest in identifying patients' social needs, little is known about hospitals' provision of services to address them. We identify social care services offered by US hospitals and determine whether hospital spending or state policies toward community benefits are associated with the provision of these services by tax-exempt hospitals.

METHODS

National secondary data about hospitals were collected from the American Hospital Association Annual Survey, with additional Internal Revenue Service (IRS) Form 990 data on community benefits spending from CommunityBenefitInsight.org and state-level community benefits policies from HilltopInstitute.org. Descriptive statistics for types of social care services and hospital characteristics were calculated, with bivariate chi-square and t-tests comparing for-profit and tax-exempt hospitals. Multivariable Poisson regression was used to estimate associations between hospital characteristics and types of services offered and among tax-exempt hospitals to estimate associations between social care services and community benefits spending and policies. Multivariable logistic regressions modeled associations between community benefits spending/policies and each type of social care services.

FINDINGS

Private US hospitals offered an average of 5.7 types of social care services in 2018. Tax-exempt hospitals offered about 36% more social care services than for-profit hospitals. Larger number of beds, health system affiliation, and having community partnerships are associated with more social care services, whereas rural hospitals and those managed under contract offered fewer social care services. Among tax-exempt hospitals, greater community benefits spending is associated with offering more total (incidence rate ratio [IRR] = 1.10, p < 0.01) and patient-focused social care services (IRR = 1.16, p < 0.01). Hospitals in states with minimum community benefits spending requirements offered significantly fewer social care services.

CONCLUSIONS

Although tax-exempt status and increased community benefits spending were associated with increased social care services provision, the observation that certain hospital characteristics and state minimum community benefits spending requirements were associated with fewer social care services suggests opportunities for policy reform to increase social care services implementation.

Community Coalitions' Perspectives on Engaging with Hospitals in Ohio to Address the Opioid Crisis

Community coalitions have been leading the multisector response to the opioid epidemic in the Unites States. However, with the medicalization of opioid use disorder and changing health care policies, hospitals have moved to the forefront, becoming more active in collaborating with community coalitions. Little is currently known about how community coalitions view and approach collaborating with hospitals despite its importance for understanding and advancing interorganizational approaches to combating the opioid epidemic. Using data from semistructured interviews (n = 119) conducted from November 2019 to January 2020 as part of the HEALing Communities Study (ClinicalTrials.gov: NCT04111939), the authors examined how community coalition members perceive hospital collaborations and explored the opportunities and challenges of these partnerships. They characterized 3 emergent themes: coalition approaches to collaborating with hospitals, barriers to collaboration, and opportunities for sustainable relationships. This new evidence highlights the value that coalitions place on hospital collaborations, as well as mechanisms that may help support ongoing partnerships.

State Regulation and Hospital Community Benefit Spending in Medicaid Expansion States

CONTEXT

Previous studies show that nonprofit hospital spending on charity care declined in Medicaid expansion states. We test whether state community benefit regulations mitigated the decline in charity care spending.

METHODS

We use a fixed effects model to evaluate the association between state regulations and nonprofit hospital community benefit spending and its subcategories as a share of total expenses in Medicaid expansion states. We obtained community benefit spending data from the Internal Revenue Service Form 990 Schedule H filings of 1,738 hospitals in 44 states and the District of Columbia from 2010 to 2017. We determine the stringency of state regulations by comparing the provisions of state and federal requirements based on regulation information compiled by the Hilltop Institute.

FINDINGS

State minimum community benefit requirements are associated with increased community benefit and charity care spending by nonprofit hospitals in Medicaid expansion states.

CONCLUSIONS

States that imposed minimum community benefit requirements on nonprofit hospitals did not experience a decline in charity care spending after Medicaid expansion. The results suggest state minimum community benefit rules may expand the provision of community benefit and charitable care spending.

Benefits of developing graduate medical education programs in community health systems

The creation of new CMS-funded Graduate Medical Education (GME) cap positions by the Consolidated Appropriations Act 2021 offers a unique opportunity for systems in community and rural settings to develop and expand their training programs. This article provides a review of the evidence behind the value proposition for system administrators to foster the growth of GME in community health systems. The infrastructure needed to accredit GME programs may reduce the cost of care for both the patients and the system through improved patient outcomes and facilitation of system efforts to recognize and mitigate social determinants of health. Residents, fellows and medical students expand the capacity of the current healthcare workforce of a system by providing coverage during healthcare emergencies and staffing services in difficult-to-recruit specialties. Those trainees are the nucleus of succession planning for the current medical staff, can facilitate the creation and expansion of service lines, and may elevate the profile of the system through scholarly work and equity and quality improvement activities. While creating GME programs in a community health system may, at first glance, be perceived as cost-prohibitive, there are robust advantages to a system for their creation.

Quality and Cost of Care by Hospital Teaching Status: What Are the Differences?

Policy Points In two respects, quality of care tends to be higher at major teaching hospitals: process of care and long-term survival of cancer patients following initial diagnosis. There is also evidence that short-term (30-day) mortality is lower on average at such hospitals, although the quality of evidence is somewhat lower. Quality of care is mulitdimensional. Empirical evidence by teaching status on dimensions other than survival is mixed. Higher Medicare payments for care provided by major teaching hospitals are partially offset by lower payments to nonhospital providers. Nevertheless, the payment differences between major teaching and nonteaching hospitals for hospital stays, especially for complex cases, potentially increase prices other insurers pay for hospital care.

CONTEXT

The relative performance of teaching hospitals has been discussed for decades. For private and public insurers with provider networks, an issue is whether having a major teaching hospital in the network is a "must." For traditional fee-for-service Medicare, there is an issue of adequacy of payment of hospitals with various attributes, including graduate medical education (GME) provision. Much empirical evidence on relative quality and cost has been published. This paper aims to (1) evaluate empirical evidence on relative quality and cost of teaching hospitals and (2) assess what the findings indicate for public and private insurer policy.

METHODS

Complementary approaches were used to select studies for review. (1) Relevant studies highly cited in Web of Science were selected. (2) This search led to studies cited by these studies as well as studies that cited these studies. (3) Several literature reviews were helpful in locating pertinent studies. Some policy-oriented papers were found in Google under topics to which the policy applied. (4) Several papers were added based on suggestions of reviewers.

FINDINGS

Quality of care as measured in process of care studies and in longitudinal studies of long-term survival of cancer patients tends to be higher at major teaching hospitals. Evidence on survival at 30 days post admission for common conditions and procedures also tends to favor such hospitals. Findings on other dimensions of relative quality are mixed. Hospitals with a substantial commitment to graduate medical education, major teaching hospitals, are about 10% to 20% more costly than nonteaching hospitals. Private insurers pay a differential to major teaching hospitals at this range's lower end. Inclusive of subsidies, Medicare pays major teaching hospitals substantially more than 20% extra, especially for complex surgical procedures.

CONCLUSIONS

Based on the evidence on quality, there is reason for patients to be willing to pay more for inclusion of major teaching hospitals in private insurer networks at least for some services. Medicare payment for GME has long been a controversial policy issue. The actual indirect cost of GME is likely to be far less than the amount Medicare is currently paying hospitals.

Leveraging Population Health Expertise to Enhance Community Benefit

As the Internal Revenue Service strengthens the public health focus of community benefit regulations, and many states do the same with their tax codes, hospitals are being asked to look beyond patients in their delivery system to understand and address the needs of geographic areas. With the opportunities this affords come challenges to be addressed. The regulations' focus on population health is not limited to a defined clinical population—and the resulting emphasis on upstream determinants of health and community engagement is unfamiliar territory for many healthcare systems. At the same time, for many community residents and community-based organizations, large medical institutions can feel complicated to engage with or unwelcoming. And for neighborhoods that have experienced chronic underinvestment in upstream determinants of health—such as social services, housing and education—funds made available by hospitals through their community health improvement activities may seem insufficient and unreliable. Despite these regulatory requirements, many hospitals, focused as they are on managing patients in their delivery system, have not yet invested significantly in community health improvement. Moreover, although there are important exceptions, community health improvement projects have often lacked a strong evidence base, and true health system-community collaborations are relatively uncommon. This article describes how a large academic medical center tapped into the expertise of its population health research faculty to partner with local community-based organizations to oversee the community health needs assessment and to design, implement and evaluate a set of geographically based community-engaged health improvement projects. The resulting program offers a paradigm for health system investment in area-wide population health improvement.

Nonprofit Hospital Community Benefit in the U.S.: A Scoping Review From 2010 to 2019

Background: U.S. nonprofit hospital community benefit recently underwent significant regulatory revisions. Starting in 2009, the Internal Revenue Service (IRS) required hospitals to submit a new Schedule H that provided greater detail on community benefit activities. In addition, the Affordable Care Act (ACA), which became law in 2010, requires hospitals to conduct community health needs assessments (CHNA) and develop community health implementation plans (CHIP) as a response to priority needs every 3 years. These new requirements have led to greater transparency and accountability and this scoping review considers what has been learned about community benefit from 2010 to 2019.

Methods: This review identified peer-reviewed literature published from 2010 to 2019 using three methods. First, an OvidSP MEDLINE search using terms suggested previously by community benefit researchers. Second, a PubMed search using keywords frequently found in community benefit literature. Third, a SCOPUS search of the most frequently cited articles in this topic area. Articles were then selected based on their relevance to the research question. Articles were organized into topic areas using a qualitative strategy similar to axial coding.

Results: Literature appeared around several topic areas: governance; CHNA and CHIP process, content, and impact; community programs and their evaluation; spending patterns and spending influences; population health; and policy recommendations. The plurality of literature centered on spending and needs assessments, likely because they can draw upon publicly available data. The vast majority of articles in these areas use spending data from 2009 to 2012 and the first cycle of CHNAs in 2013. Policy recommendations focus on accountability for impact, enhancing collaboration, and incentivizing action in areas other than clinical care.

Discussion: There are several areas of community benefit in need of further study. Longitudinal studies on needs assessments and spending patterns would help inform whether organizations have changed and improved operations over time. Governance, program evaluation, and collaboration are some of the consequential areas about which relatively little is known. Gaps in knowledge also exist related to the operational realities that drive community benefit activities. Shaping organizational action and public policy would benefit from additional research in these and other areas.

Association of Nonprofit Hospitals' Charitable Activities With Unreimbursed Medicaid Care After Medicaid Expansion

IMPORTANCE

In the United States, nonprofit hospitals receive tax-exempt status with the expectation that they provide a high level of benefit to local communities. Prior work has shown that Medicaid expansion reduced hospital spending on uncompensated care.

OBJECTIVE

To measure the association of tax-exempt hospital spending with community benefit and changes in uncompensated care after Medicaid expansion.

DESIGN, SETTING, AND PARTICIPANTS

This cohort study was performed using a difference-in-differences analysis (ie, a pre-post treatment-control design) to estimate changes in reported charitable categories associated with Medicaid expansion. Data from Internal Revenue Service form 990, Schedule H, tax filings for 2253 tax-exempt hospitals in the United States from 2012 to 2016 were used. Data were analyzed from June to November 2019.

EXPOSURE

The proportion of the hospital's tax filing that spanned the period after Medicaid expansion.

MAIN OUTCOMES AND MEASURES

Hospital-reported spending on uncompensated care, unreimbursed Medicaid expenses, and other community benefit spending categories.

RESULTS

Across 2253 hospitals, mean (SD) uncompensated care costs between 2012 and 2016 were $4.20 million ($8.80 million) and unreimbursed Medicaid expenses were $7.60 million ($18.62 million). Compared with tax-exempt hospitals in states that did not expand Medicaid, those in states that did expand Medicaid reported mean reductions in their provision of uncompensated care of $1.11 million (95% CI, $0.35 million to $1.87 million; P < .001), representing a mean change of -2% (95% CI, -6% to 2%; P < .001). These reductions have been offset by mean reported increases in the provision of unreimbursed Medicaid expenses of $1.63 million (95% CI, $0.31 million to $2.94 million; P = .02), representing a mean increase of 2% (95% CI, 1% to 4%; P = .01). Tax-exempt hospitals in states that expanded Medicaid reported no statistically significant mean increase in spending on other community benefit activities.

CONCLUSIONS AND RELEVANCE

In this study, large decreases in uncompensated care among tax-exempt hospitals associated with Medicaid expansion were not accompanied by increases in other reportable categories of community health benefit spending. Instead, they were accompanied by increased spending on unreimbursed Medicaid expenses.

Did Performing Community Health Needs Assessments Increase Community Health Program Spending by North Carolina's Tax-Exempt Hospitals?

As of March 23, 2012, the Internal Revenue Service (IRS) requires tax-exempt hospitals to conduct a Community Health Needs Assessment (CHNA) every 3 years. This study assessed whether the IRS CHNA mandate incentivized North Carolina's tax-exempt hospitals to increase investments in community health programs. The authors gathered the 2012-2016 community benefit reports of 53 North Carolina private, nonprofit hospitals from the North Carolina Hospital Association. Community benefit spending data from the year of the first CHNA were compared to that 2 years later using paired t tests among matched subjects. No significant increases were found in hospitals' community health programs spending (P = 0.6920) or in providing patient care financial assistance (charity or discounted care) (P = 0.0934). In fact, aggregate community health programs spending effectively decreased by 4%, from $393.3 million to $377.5 million. Among all community benefit items, only the unreimbursed cost for treating Medicare patients increased significantly (P = 0.0297). The proportion of spending on community health programs relative to patient care financial assistance decreased significantly (P = 0.0338). Performing CHNAs did not incentivize North Carolina's tax-exempt hospitals to progressively invest in community health programs. The hospitals continue to spend heavily on patient care financial assistance and little on disease prevention and community health improvement activities. These findings suggest that tax-exempt hospitals continue to function as a safety net for the poor and the uninsured rather than as active partners in population health management initiatives. At present, performing CHNAs may be more a demonstration of compliance than a tool to improve population health.