Community Benefit Spending Regulation for Tax-Exempt Hospitals

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The Expectations of Hospitals Regarding Community Benefit Spending as Established by Policy

Tax-exempt hospitals should conduct continuous and periodic community health needs assessments to meet the expectations of community benefit spending law. Singh et al.’s (2015) findings show that the expenditure of tax-exempt hospitals does not match the healthcare needs of the communities they serve. Among the private and tax-exempt hospitals featured in Singh et al.’s (2015) research, most of their expenses benefited patients but failed to meet the current health needs of their communities. In relation to Singh et al. (2015) study, Folkemer et al. (2011) describe that community benefits spending policy demands hospitals to examine the current and changing health needs of the communities to improve the well-being of residents. This helps tax-exempt hospitals implement budget and expenditure plans that meet recent community primary, secondary, and tertiary health needs.

The community benefit spending regulation also demands that tax-exempt hospitals have financial assistance programs and policies for low-income and uninsured patients. According to Folkemer et al. (2011), the law requires these hospitals to provide healthcare services to patients with economic and financial problems without limitation. For instance, when patients from low-income communities require emergency surgery for chronic illness, nonprofit hospitals should provide the treatment as well as bill them reasonably after assessing their financial capabilities. Folkemer et al. (2011) indicate that the law requires tax-exempted hospitals to prioritize billing insured patients before uninsured patients when delivering healthcare services. This expectation harmonizes with the recommendation of tax-exempt hospitals to use safety-net providers to enhance health equity.

Hospitals that uphold the community benefit spending regulation for tax exemption should have billing and collection controls for uninsured and economically underprivileged clients. James (2016) depicts that the provision demands nonprofit hospitals to examine patients’ financial eligibility or capabilities before billing them after treatments. Moreover, the requirements of the law indicate that providers should bill uninsured patients with hospital charges that correspond to Medicare-free or Medicaid-supported healthcare services. In the end, this will support the financial assistance policy of tax-exempt hospitals. The program also reduces health disparity and inequality among the low-income and uninsured populations.

Hospitals’ Efforts to Meet and Adhere to the Expectations of Community Benefit Spending Regulations

The efforts of tax-exempt hospitals to adhere to community benefit spending policy include engaging in social and economic empowerment programs in their communities. For instance, tax-exempt facilities provide employment opportunities to applicants from needy communities. Olive (2015) demonstrates this by showing how the Johns Hopkins University and Healthcare system supports local community members with economic and social needs. Olive (2015) indicates that Johns Hopkins provides tenders to minority community members in Baltimore. The institution also employs workers in University and Healthcare system from the underprivileged and underrepresented Baltimore communities (Olive, 2015). This helps reduce poverty and other welfare issues that are key contributors to the negative health and well-being of residents of low-income communities.

Hospitals that uphold the community benefit spending regulation for tax exemption also implement communal health education programs to meet the law’s regulatory requirements. Cronin (2017) reports that community health education programs positively impact the health of residents in these areas. In this sense, tax-exempted healthcare facilities should educate the communities on the benefits of healthy living. These education programs should also empower the community about the risks of unhealthy lifestyles. Moreover, Cronin (2017) recommends hospitals to implement disease screening, health examination, need assessments, and community outreach programs during health education initiatives in societies. Consequently, this would help control the prevalence of risky health conditions, such as ambulatory and emergency healthcare needs.

Tax-exempt organizations also implement safety-net healthcare programs to abide by community benefit expenditure regulations. According to the Commonwealth Fund (2022), these hospitals implement these initiatives to reduce the cost of care for low-income and uninsured patients. For example, nonprofit hospitals hire safety net healthcare providers for service delivery. These safety-net providers prioritize delivering healthcare services to patients without worrying about their abilities to cater to medical bills (Commonwealth Fund, 2022). Ultimately, this provides insured patients or clients from underprivileged families access to quality and reliable healthcare services from tax-exempt hospitals.

Idaho State Performance Regarding the Community Benefit Expenditure Law from 2010-2016

From 2010 – 2016, the community benefit spending for Bingham Memorial Hospital, Bmh Inc., a healthcare facility in Idaho, has been below $ 7 000 000 annually. The Community Benefit Insight (n.d.) shows that in 2010, the hospital spent nearly $ 1 100 000, while in 2011, the facility incurred almost $ 3 400 000 as the annual community benefit expenditure. In 2012, 2013, 2014, 2015, and 2015, the community benefits expenses for Bmh Inc. were nearly $ 3 200 000, $ 3 600 000, $ 5 700 000, $ 4 100 000, and $ 5 100 000, respectively (Community Benefit Insight, n.d.). For these reasons, one can conclude that the community benefit expenditure varies annually among the tax-exempt hospitals in Ihado, such as Bmh Inc. spent more in 2016 and 2014 compared to 2010, 2011, 2012, 2013, and 2015.

Between 2010 and 2016, the total functional expenses are more than the community benefits expenditure for Idaho nonprofit hospitals, including Bmh Inc. For example, Community Benefit Insight (n.d.) provides that in 2010, Bmh Inc. had a functional expense of nearly $ 72 000 000. This is 70 times more than Bmh Inc.’s expenditure on community benefits as a law requirement. Similarly, in 2016, Bmh Inc. incurred over $ 112 000 000 in functional expenses. This is 21 times more than what Bmh Inc. spent on community health benefits. Thus, Idaho tax-exempt hospitals need to improve their expenditure on civic programs to meet community benefits expenditure expectations and enhance communal health.

References

Commonwealth Fund (2022). Medicaid and safety-net providers: An essential health equity partnership. Fund Reports. Web.

Community Benefit Insight. (n.d.) Individual facility details: Bingham Memorial Hospital 98 poplar blackfoot, ID 83221. Web.

Cronin, C. E. (2017). The prevalence of community benefit participation in the hospital region and its relationship to community health outcomes. Ohio University.

Folkemer, D. C., Spicer, L. A., Mueller, C. H., Somerville, M. H., Brow, A.L.R., Milligan, C.J., & Boddie-Willis, C.L. (2011) Hospital community benefits after the ACA: The emerging federal framework. The Hilltop Institute. Web.

James, J. (2016). Health policy brief: Nonprofit hospitals’ community benefit requirements. Under the Affordable Care Act, many nonprofit hospitals must meet new requirements to retain their tax-exempt status. Health Affairs. Web.

Olive, M. (2015) Surrounded by poverty, urban hospitals reach out. Pew Charitable Trust. Web.

Singh, S. R., Young, G. J., Daniel Lee, S. Y., Song, P. H., & Alexander, J. A. (2015). 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, 105(5), 914-921. Web.

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Community Benefit Spending Regulation for Tax-Exempt Hospitals

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