The Fall 2006 issue of Great Boards will be out in a few weeks.
Our lead story will look at community benefit: why it's become a hot issue, how to define and measure it, and most important -- what boards need to ask about their hospitals' efforts. (We'll also post links to sample community benefit reports on the Great Boards website.) In addition, the next issue will describe a practical process for one of the board's most important responsibilities, choosing and preparing the next board chairperson.
When we began working on the community benefit story over the summer, it appeared our first task would be persuading boards to get community benefit squarely on their radar screens. Events overtook us. Persuasion is moot.
This week Sen. Charles Grassley, chairman of the Senate Finance Committee, said he's "directed his staff to develop proposals on ways to make sure non-profit hospitals deliver their fair share of care to the poor and community benefit." Grassley made the announcement at hearings on charitable care and community benefits at not-for-profit hospitals. He also released a summary of responses to a survey of 10 major non-profit hospitals, asking a series of questions about their care to the poor and service to the community. Perhaps signaling future legislation, he said: "There are no uniform standards or definitions for charity care and community benefit. The IRS and Congress have allowed non-profit hospitals to use their own definitions."
The Senator offered sharp criticism in releasing the report: "Non-profit doesn't necessarily mean pro-poor patient. Non-profit hospitals may provide less care to the poor than their for-profit counterparts. They may charge poor, uninsured patients more for the same services than they charge insured patients. They sometimes give their executives gold-plated compensation packages and generous perks such as country club memberships. All of this calls into question whether non-profit hospitals deserve the billions of dollars in tax breaks they receive from federal, state, and local governments. Unfortunately, it's almost impossible to get an exact measurement of how much charity care and community benefit, such as vaccination clinics or cancer screenings, that non-profit hospitals offer to earn their special tax status. That's because non-profit hospitals don't have to report any kind of information about those activities to the IRS."
Despite the criticism, the report shows the 10 hospital systems surveyed provided more than half a billion dollars in uncompensated care to patients in 2004. According to survey responses, the hospitals' charity care and financial assistance programs provided free care and discounts for uninsured patients ranging up to 500% of the federal poverty level. Other community benefit programs included health screenings, child immunization, nurse triage, poison control, blood drives, prenatal programs, clinical research and health professional training.
Richard Umbdenstock, AHA's chief operating officer and president-elect, took the offensive, stating: "No other part of the health care sector comes close to that record of service to communities." The 10 systems surveyed were: Advocate Health Care Network and Advocate Health and Hospitals Corp., Banner Health, The Cleveland Clinic, Fairview Health Systems, New York Presbyterian Hospital System, North Mississippi Health Services, Phoebe Putney Health Systems, Resurrection Medical Center and Resurrection Health Care, Sutter Health, and William Beaumont Hospital.
The Catholic Health Association and VHA Inc. have teamed up to provide a practical tool to help hospitals take charge of this issue and be prepared to demonstrate their community benefit activities. The tool has even won Grassley's seal of approval. In a joint press conference with CHA this week, he said CHA's guidelines "show a deliberate effort to do things right. I will be urging other hospitals to use this as a template because I think this is an honest approach." For more information, go to: http://www.chausa.org/communitybenefit.
In the next Great Boards, we'll provide examples of how hospitals and health systems are not only delivering community benefits, but also, how they are telling their stories effectively to the communities. You'll receive an email update when the issue is available.
In future issues, we'll continue to follow the growing pressures for public accountability, transparency, and institutional integrity from not-for-profits of all stripes, and in particular, hospitals and health systems
CHANGING YOUR E-MAIL ADDRESS. To change your e-mail address on our subscriber list, follow the simple instructions at the end of this message. To keep the Great Boards newsletter free, we ask subscribers to update their own records right on line.
TELL A FRIEND. If you find the Great Boards newsletter and our other governance resources helpful, tell a friend or colleague. Just forward this message to them and they can sign-up free on our website: http://www.greatboards.org/newsletter/subscribe.asp
FEEDBACK. Have a question or topic you'd like us to address? Interested in retreat or consulting services for your board? Visit www.GreatBoards.org and send a message from the Contact page or send an e-mail to bbader@GreatBoards.org
Barry S. Bader, Bader & Associates
12225 Seline Way, Potomac MD 20854, 301-340-0903
www.GreatBoards.org *** bbader@GreatBoards.org