Northeast Ohio Community Benefit Spending: 2015 Data Deciphered | $name

Northeast Ohio Community Benefit Spending

Northeast Ohio Community Benefit Spending: 2015 Data Deciphered

Fri, Jun 2, 2017  -  Comments (0)  -   Posted by Kirstin Craciun

Recently, I was invited to present information on population health planning and Northeast Ohio community benefit spending to the Northeast Ohio chapter of the Healthcare Financial Management Association (NEO HFMA). My first reaction was excitement, followed almost immediately by panic. Wait a minute… finance professionals? But I speak the language of words and they speak the language of numbers. Am I being punked?

#teamwork

I walked (sprinted) to talk to my colleague and number-savvy colleague, George Jeney, who pulled in our other hospital finance and data management project manager, Bob Kaliszewski, and a collaboration was born. Recognizing that we needed additional expertise we partnered with Julie Cox, director of marketing, and Luisa Gantt, digital marketing manager and benefited immensely from their strategic thinking and design savvy.

So, what did I share about Northeast Ohio community benefit spending with all of the smart folks at NEO HFMA? Well, a lot. But first, Heidi Gartland, vice president, government & community relations at University Hospitals and The Center for Health Affairs' board chair kicked off NEO HFMA’s 2017 Gerry Haggerty Annual Leadership Institute with an excellent overview of the federal requirements governing community benefit. Having the federal context explained to the audience (did you know that the “community benefit standard” dates back to 1969?) was really helpful and a great tee up to what I was covering.

For those who are unfamiliar, nonprofit hospitals are required to demonstrate the level of community benefit that they provide to justify some of the tax exemptions that they receive for their hospital nonprofit tax status. Programs or activities that are counted as community benefit must respond to an identified community need (such as one identified through a hospital’s community health needs assessment) and must not be provided primarily for organizational benefit. If you’re marketing your bariatric surgery program, that’s probably not going to count as a community benefit activity, but if you’re providing health screenings in an underserved neighborhood that’s likely going to count.

Nonprofit hospitals report information on their community benefit spending to the IRS on Form 990, Schedule H.  The community benefit table looks like this:

Northeast Ohio Community Benefit Spending: 2015 Data Deciphered

Our hospital finance gurus recently analyzed 2015 data from member hospitals’ 990s (including a simulation of the 990 data for our county hospital, MetroHealth) and we gained some insights. Can you guess which bucket of community benefit spending Northeast Ohio hospitals spent the bulk of their community benefit dollars on in 2015?

Medicaid Shortfall

If you guessed Medicaid shortfall, you’re right! I’d give you a prize, but I’m not really sure how to make that happen… If you’re new to the world of hospital finance, Medicaid shortfall is the difference between Medicaid allowable costs and Medicaid payments. Too much jargon? It’s essentially the difference between what it costs to provide care to Medicaid patients and what hospitals are actually reimbursed for providing that care. If you don’t spend your days immersed in 990 forms you might be surprised to learn that in 2015 hospitals across the U.S. received, on average, just 90 cents for every dollar they spent caring for Medicaid patients. Northeast Ohio community benefit spending on Ohio Medicaid shortfall comprised more than one-third (38%) of total community benefit spending in 2015 (shown in dark blue below).


Northeast Ohio Community Benefit Spending: 2015 Data Deciphered

Health Professions Education

The second biggest bucket of Northeast Ohio community benefit spending in 2015 was health professions education spending (30%). Captured in this light blue slice of the pie are educational programs that result in a degree, certificate or training necessary to practice as a health professional. Not to be forgotten is spending on continuing education programs necessary to retain a state license or board certification.

Financial Assistance at Cost

In yellow, coming in at 14 percent, is the third largest bucket of Northeast Ohio community benefit spending – financial assistance at cost. What the heck does that mean? Well, sometimes patients are unable to pay all or a portion of their bills. When hospitals provide free or discounted health services to patients who meet the organization’s criteria for financial assistance, that spending is captured here. It’s a little bit more complicated than that (understatement), but hopefully this gives you a general sense of this type of spending.

Research

Northeast Ohio hospitals spent 8 percent of their community benefit dollars on research in 2015  – shown in orange above. In order to count as community benefit, studies or investigations must be funded by a tax-exempt or governmental entity and aim to generate knowledge for the public (not just the hospital).

Cash and In-Kind Contributions / Community Health Improvement and Operations

The two community benefit buckets that have gained increased attention in Ohio are hospital spending on cash and in-kind contributions (purple, 4%) and community health improvement and operations (green, 4%). Hospital contributions to healthcare organizations and community groups that are restricted in writing to programs and activities meeting the criteria for community benefit count as part of cash and in-kind contributions. A lot of different programs and activities that respond to identified health needs can be captured under community health improvement including screenings, support groups, insurance enrollment assistance, and even some social and environmental improvement activities. Not to be forgotten are costs associated with community health needs assessment activities and community benefit planning and administration – trust me, this spending can add up quickly!

Subsidized Health Services

Finally, the smallest community benefit bucket (grey, 2%) encompasses hospital spending on subsidized health services. Here we think of clinical services (like burn units, trauma units and neonatal intensive care units) that hospitals provide to respond to an identified need in the community, despite losing money on those services. I know I’m incredibly thankful that our hospitals provide these crucial services.

If you’ve hung in there, hopefully you now have a deeper understanding of Northeast Ohio community benefit spending. Despite breaking out into a cold sweat while looking at all of the community benefit data, I learned a thing or two preparing for my presentation. I’ll keep sharing insights into the different ways that Northeast Ohio hospitals are spreading their impact beyond the four walls of the hospital and striving to positively impact the health of the community.

Posted in Population Health
About the Author

Kirstin Craciun

I grew up in Canada where access to healthcare for all citizens is a core principle. I bring that thinking to the work I do as The Center for Health Affairs’ director of community outreach. I spend my days helping Northeast Ohio hospitals assess health needs in the community; develop collab...

See other articles by this author and view full bio »


Leave a Comment

Your email address will not be published..... *Required fields.  
 
 

Tag Cloud