The federal health law鈥檚 efforts to get nonprofit hospitals to provide more community-wide benefits in exchange for their lucrative tax status has gotten off to a slow start, new research suggests. And some experts predict that a recent repeal of a key provision of the law could further strain the effort.
The was mandated by the Affordable Care Act. The health law required hospitals that meet federal tax standards to be nonprofits to perform a community health needs assessment (CHNA) every three years, followed by implementing a strategy to deal with issues confronting the community, such as preventing violence or lowering the rates of diabetes.
A in the journal Health Affairs shows spending in these areas has remained relatively stagnant.
The research showed average spending by tax-exempt hospitals on community benefits in 2010 was 7.6 percent of total operating costs and bumped to 8.1 percent by 2014. But the bulk of that spending goes toward unreimbursed patient care, such as charity care. The ACA was trying to spur more spending on broader community initiatives, which have remained below 1 percent of operating costs at the hospitals.
鈥淭his is not easy for hospitals to do,鈥� said Gary Young, the study鈥檚 lead author and director of the Center for Health Policy and Healthcare Research at Northeastern University in Boston. 鈥淏y tradition, by the nature of their resources, hospitals have not been oriented to prevention, they鈥檝e been oriented to treatment.鈥�
New efforts by the Republican-led Congress may complicate the effort. The repeal last month of the ACA鈥檚 penalties for most people who don鈥檛 have health insurance has some experts questioning how some of these hospitals will be able to spend more on community benefits. The Congressional Budget Office has estimated that because of that change about 13 million people would give up their coverage by 2027, which could drive up costs for hospitals because there would be more uninsured patients.
鈥淎nything that destabilizes the system and takes money out of the hospitals鈥� revenue stream is going to negatively impact them,鈥� said Gregory Tung, assistant professor at the University of Colorado鈥檚 School of Public Health. 鈥淚t鈥檚 tough for hospitals to be navigating that uncertainty.鈥�
Jill Horwitz, professor of law at UCLA who specializes in health issues, said hospitals have trouble planning community efforts when they are unsure of their finances.
鈥淚t鈥檚 a very difficult context in which to operate a stable system,鈥� Horwitz said. 鈥淥ne day to the next, it鈥檚 hard to know what the rules are, what the reimbursement is going to be and what kind of insurance your patients will have.鈥�
More than half of the hospitals in the United States are private, nonprofit organizations that are tax-exempt.
Lawrence Massa, president & CEO of the Minnesota Hospital Association, said the repeal of the ACA鈥檚 individual mandate penalties will change hospitals鈥� calculations.
鈥淲e certainly expect to see our uninsured rate go up as a result of repealing the individual mandate,鈥� he said, 鈥渟o that鈥檚 going to have an opposite type of effect of where we thought the trend was going to be because we changed the rules in the middle of the game.鈥�
But it鈥檚 too early to tell how hospitals will respond, according to Massa. Many are still grappling with the new requirements.
The ACA was enacted in 2010, but the provision requiring community-based action did not come into effect until the end of March 2012, and enrollment in ACA marketplace plans didn鈥檛 begin until 2014. Hospitals began early investments for assembling the needs assessments in 2011 and 2012, Massa said.
鈥淚n the later years, they鈥檒l be using that data and comparing and reporting to the IRS how they鈥檝e changed their community benefits spending as a result of those community health needs assessments,鈥� he said. 鈥淚f everything stayed the way it was, I think we would know by 2020 whether this had the kind of impact that was anticipated.鈥�
Young and his research colleagues acknowledged in their study that 鈥渃ertainly, more time is needed鈥� to assess the full impact of the law鈥檚 requirements on spending for community benefits.
Nonetheless, Young said, many hospitals lack the means to provide greater preventive care in the community.
They don鈥檛 have the necessary infrastructure, 鈥渢he personnel or the knowledge to develop those strategies,鈥� he said. 鈥淭hey don鈥檛 have the resources to necessarily invest in those areas.鈥�
Horwitz agreed. 鈥淚f we鈥檙e going to require this high level of spending on community benefits and paying for patients who can鈥檛 afford care, something else has to give,鈥� she said.