Healthcare Policy: Benefiting the Community and Those in Need

Healthcare Policy: Benefiting the Community and Those in Need
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Healthcare Policy: Benefiting the Community and Those in Need
Expectations of Hospitals
Under Community Benefit Spending, nonprofit hospitals are expected to address health social determinants to maintain their tax-exempt status. As such, nonprofit hospitals are expected to invest heavily in community health to justify their tax-exempt status (Wen et al., 2023). The heavy investment geared towards addressing social determinants of health is expected to positively impact the communities around the hospitals. As informed by Chaiyachati et al. (2018), the Affordable Care Act (ACA) requires hospitals to carry out community health needs assessments triennially as a way of reporting their community benefit efforts. However, hospitals are not required to report on changes in outcomes, which limits researchers from studying the link between investment and community health (Wen et al., 2023).
According to Chaiyachati et al. (2018), Congress and the public are increasingly scrutinizing whether nonprofit hospitals provide enough community benefit to warrant their sizeable and favorable tax benefit. Chaiyachati et al. (2018) also point out that from 2008, the IRS required all nonprofit hospitals to report their community investments, the level of subsidized free care provided, and research/educational activities for health professionals. Therefore, it is evident that relevant bodies and the public expect nonprofit hospitals to invest significantly in the communities they serve. Furthermore, ACA and provisions by the IRS require nonprofit hospitals to report their investments.
Efforts by States
With no methodology to determine the correct level of spending, states have stepped in to ensure nonprofit hospitals adhere to the expectations of the ACA and IRS. According to Johnson et al. (2018), only seven states in the U.S. specify the minimum community benefit spending threshold, while twenty-one states require nonprofit hospitals to report their community benefit spending to a state body without a minimum threshold. The research by Johnson et al. (2018) found that nonprofit hospitals spend more on community benefits when states have in place reporting laws without threshold laws.
Illinois, Nevada, and Oregon are key states that have made efforts to prompt nonprofit hospitals to spend more on community benefits. In Illinois, nonprofit hospitals are required by law to spend ...