Community Benefit Sharing Responsibility, Improving Community Health Kristin D. Wilson, PhD, MHA Department of Health Management and Policy Saint Louis University School of Public Health

For Profit vs. Not-for-Profit For profit For profit Shareholders Shareholders Assets belong to the company Assets belong to the company ROI – earnings (profit) invested in the business or distribute dividends to shareholders ROI – earnings (profit) invested in the business or distribute dividends to shareholders Not-for-profit Not-for-profit Shareholders Shareholders Assets are of the Community Assets are of the Community ROI – earnings re-invested in community assets to improve community health ROI – earnings re-invested in community assets to improve community health At the heart of this issue…..community benefit At the heart of this issue…..community benefit

What is Community Benefit? A mission-driven, comprehensive, evidence- based philosophy and approach that a not- for-profit hospital embraces to improve the health of their communities A mission-driven, comprehensive, evidence- based philosophy and approach that a not- for-profit hospital embraces to improve the health of their communities Particular emphasis given to the vulnerable populations Particular emphasis given to the vulnerable populations Community benefit is incorporated into the governance, planning, budgeting, strategies, programs, services, practices, and activities of the hospital - ideally. Community benefit is incorporated into the governance, planning, budgeting, strategies, programs, services, practices, and activities of the hospital - ideally.

What is Community Benefit? The requirement to financially demonstrate and report to the IRS how tax-exempt hospitals provide and report community benefit, but does not “define” community benefit. The requirement to financially demonstrate and report to the IRS how tax-exempt hospitals provide and report community benefit, but does not “define” community benefit. Reported on the Schedule H of the Form 990 (new) Reported on the Schedule H of the Form 990 (new) Captures financial information and activities Captures financial information and activities Additional requirements for community benefit included in the recently passed health care legislation. Additional requirements for community benefit included in the recently passed health care legislation.

What “Counts” as Community Benefit? The program, activity, or service must respond to a demonstrated health-related community need The program, activity, or service must respond to a demonstrated health-related community needAND The program, activity, or service must seek to achieve at least one community benefit objective: The program, activity, or service must seek to achieve at least one community benefit objective: Improve Access to Health Services Improve Access to Health Services Enhance Population Health Enhance Population Health Advance Knowledge Advance Knowledge Demonstrate Charitable Purpose Demonstrate Charitable Purpose Source: Catholic Health Association, “Criteria for What Counts”, 982E-6139D5889AD2/0/IRS_Slides.pdf

Community Benefit Old Reporting Prior to the 2008 tax year, hospitals reported community benefit primarily as: Prior to the 2008 tax year, hospitals reported community benefit primarily as: Charity care Charity care Unreimbursed medicaid costs Unreimbursed medicaid costs Bad debt required to be separated from charity care Bad debt required to be separated from charity care Dec. 2007, IRS release a new form, the Schedule H, to attempt to standardize community benefit reporting for charity care. Dec. 2007, IRS release a new form, the Schedule H, to attempt to standardize community benefit reporting for charity care.

Community Benefit New Reporting Hospitals now describe their mission and demonstrated community benefit activities. Hospitals now describe their mission and demonstrated community benefit activities. New reporting requirements include: New reporting requirements include: Under Schedule H Part I (financial reporting – what counts): Community Health Improvement Services Community Health Improvement Services Community Benefit Operations Community Benefit Operations Health Professions Education Health Professions Education Subsidized Health Services Subsidized Health Services Research Research Cash and In-Kind Contributions Cash and In-Kind Contributions

Community Benefit New Reporting Schedule H Part II: Community Building Activities Schedule H Part II: Community Building Activities Leadership development and training for community members Leadership development and training for community members Coalition building Coalition building Community health improvement Community health improvement Advocacy Advocacy Workforce development Workforce development

Community Benefit New Reporting Schedule H Part VI: Needs assessment. Needs assessment. Patient education of eligibility for assistance. Patient education of eligibility for assistance. Describe the community the organization serves, taking into account the geographic area and demographic constituents it serves. Describe the community the organization serves, taking into account the geographic area and demographic constituents it serves. Community building activities (from part II) Community building activities (from part II) Provide any other information important to describing how the organization’s hospitals or other health care facilities further its exempt Provide any other information important to describing how the organization’s hospitals or other health care facilities further its exempt purpose by promoting the health of the community (e.g., open medical staff, community board, use of surplus funds, etc.). purpose by promoting the health of the community (e.g., open medical staff, community board, use of surplus funds, etc.).

A new “paradigm” for hospitals No longer just about who comes through the doors of the hospital. No longer just about who comes through the doors of the hospital. Hospitals must proactively reach out into the communities and be an active partner to improve the health of the community. Hospitals must proactively reach out into the communities and be an active partner to improve the health of the community. They must be able to demonstrate their efforts. They must be able to demonstrate their efforts. Requires new knowledge, skills, abilities….a new way of organizing and delivering services within the community and within their own organization. Requires new knowledge, skills, abilities….a new way of organizing and delivering services within the community and within their own organization.

Not just a numbers game….. Yes, hospitals must translate their activities into dollars Yes, hospitals must translate their activities into dollars Yes, hospitals must demonstrate through evidence (outcomes, epidemiology) Yes, hospitals must demonstrate through evidence (outcomes, epidemiology) However, those are the pieces that constitute the reporting of community benefit. However, those are the pieces that constitute the reporting of community benefit. The mission, decisions, and actions undertaken, which in turn generate those numbers, is the foundation for community benefit. The mission, decisions, and actions undertaken, which in turn generate those numbers, is the foundation for community benefit.

Community Benefit: Translating Into Our Community Mercy Health System

Community Benefit Implications for Our Community Shared responsibility for community health improvement Shared responsibility for community health improvement New opportunities for partnership to achieve improved health within the community and across disciplines New opportunities for partnership to achieve improved health within the community and across disciplines New initiatives to support the advancement of Community Benefit New initiatives to support the advancement of Community Benefit New opportunities to assess and plan for improved health New opportunities to assess and plan for improved health Legislation – Community Health Assessments and Community Benefit Planning Legislation – Community Health Assessments and Community Benefit Planning

Discussion and Questions Thank you!