Transparency with a catch. AHA urges hospital price disclosure, but wants protection from lawsuits and broad definition of community benefits

The AHA last week added its two cents to the transparency debate, approving a policy that supports a patient's right to know pricing. James Springfield, left, CEO of Valley Baptist Health System, who backs the AHA's policy, says the changes come at a time when "the public is clamoring ... to learn more about the mystical world of healthcare.

Not-for-profit versus for-profit health care providers--Part II: Comparing and contrasting their records

The debate over which health care providers are most capably meeting their responsibilities in serving the public's interest continues unabated, and the comparisons of not-for-profit (NFP) versus for-profit (FP) hospitals remain at the epicenter of the discussion. From the perspective of available factual information, which of the two sides to this debate is correct? This article is part II of a 2-part series on comparing and contrasting the performance records of NFP health care providers with their FP counterparts. Although it is demonstrated that both NFP and FP providers perform virtuous and selfless feats on behalf of America's public, it is also shown that both camps have been accused of being involved in potentially willful clinical and administrative missteps. Part I provided the background information (eg, legal differences, perspectives on social responsibility, and types of questionable and fraudulent behavior) required to adequately understand the scope of the comparison issue. Part II offers actual comparisons of the 2 organizational structures using several disparate factors such as specific organizational behaviors, approach to the health care priorities of cost and quality, and business-focused goals of profits, efficiency, and community benefit.

The impact of state community benefit laws on the community health orientation and health promotion services of hospitals

This study examined the effect of state community benefit laws and guidelines on the community health orientation and the provision of hospital-based health promotion services in hospitals. The sample included all not-for-profit and investor-owned acute-care hospitals in the United States during the year 2000. Multiple regression procedures were used to test the effect of community benefit laws and type of ownership while controlling for organizational and environmental variables. The results of these procedures indicated that, on average, not-for-profit hospitals in the ten states with community benefit laws/guidelines reported significantly more community health orientation activities than did not-for-profit hospitals in the forty other states. The results of the multiple regression procedures also indicated that, on average, the investor-owned hospitals in the ten states with laws/guidelines reported significantly more community health orientation activities than did the investor-owned hospitals in the forty other states. The study found that community benefit laws had the effect of decreasing ownership-related differences in reported community health orientation activities. Further, Levene's test of equality of variance showed that the not-for-profit hospitals in community benefit states exhibited significantly lower variance in the community health orientation activities when compared with the not-for-profit hospitals in non-community benefit states. However, none of the statistical tests supported the hypotheses that community benefit laws compelled or induced hospitals to offer significantly more health promotion services. The study concluded that coercive measures such as community benefit laws were effective in compelling not-for-profit hospitals to report increased community orientation activities, and it also concluded that the mimetic pressures associated with these laws were effective in inducing investor-owned hospitals to report increased community orientation activities.

Straight talk. New approaches in healthcare

Not-for-profit health systems are under the public microscope. Sen. Charles Grassley, (D-Iowa) chairman of the Senate Finance Committee, has been critical of the charity care and billing practices of not-for-profit health systems, and vows to introduce legislation to correct abuses throughout the tax-exempt sector. The House has studied the issue as well. Not-for-profit health systems also have been accused in hundreds of lawsuits of overcharging uninsured patients and aggressively pursuing debt collection. In this installment of Straight Talk, we explore the issues surrounding tax-exempt status and how health systems should publicize their charitable work. Modern Healthcare and PricewaterhouseCoopers present Straight Talk. The session on charity care and tax-exempt status was held on October 4, 2005 at Modern Healthcare's Chicago headquarters. Fawn Lopez, publisher of Modern Healthcare, was the moderator.

Changing the balance. In ordering Evanston Northwestern to divest a hospital, the FTC could give insurers more power in negotiating with providers

As officials at Evanston Northwestern Healthcare plan their appeal of an order to divest one of its three hospitals, hospitals around the country ponder the national implications of the ruling. Industry observers say the action means hospitals may have a harder time merging to gain leverage with insurers. The AHA's Melinda Hatton, right, says she was "deeply disappointed" but not surprised by the ruling.

The ties that bind. Proposed IRS regulations would put an organization's tax exemption at risk for the behavior of its executives and board

Newly proposed IRS regulations have a simple message for not-for-profit hospitals: If you want to keep your tax-exempt status, don't engage in excess-benefit transactions. The proposals arrive as compliance officers are paying more attention to the issue. "I wouldn't say that tax awareness is high, but it's higher than ever before," says Lisa Murtha, right.

Hospitals under attack

This article presents an overview of recent cases brought by plaintiffs all over the nation against nonprofit hospitals and their charity care practices. The article focuses on Illinois law and the context of these cases and provides a background for the impetus of this influx of charitable care lawsuits.

The plight of the not-for-profit

Recent controversies in the hospital sector have questioned whether the levels of charity care, community benefit, and executive compensation provided by not-for-profit hospitals are consistent with mandates of their tax-exempt status and mission statements. This article demonstrates that these recent controversies stem from a combination of historical influences, regulatory inequities, and competitive disadvantages, which are suffocating many not-for-profit hospitals across the nation. Once the current environment is described, the article discusses each threat and offers actionable recommendations to quell current attacks faced by the industry. First, to address the current probe by the Internal Revenue Service, hospitals must begin to link their executive compensation with their organizational mission. Second, to address recent lawsuits, the article presents a standardized definition of community benefit and recommends an alternative model to classify charity care. Finally, to address recent congressional hearings, the article offers a plan for hospitals to gauge their expected benefit to the community they serve.

Does mission still matter? A hospital may forfeit its future by forgetting its community

The public finds it increasingly difficult to distinguish voluntary, not-for-profit health care organizations from their for-profit competitors. One result of this trend is challenges to not-for-profits' tax-exempt status. In 1987, this article's author, with Bruce Vladeck, published a book called Mission Matters: A Report on the Future of Voluntary Health Care Institutions. That book warned not-for-profit hospitals that, if they were to survive, they must maintain a close relationship with their communities. They urged such hospitals to nurture five traditional characteristics: Values that reflect community commitment. Accountability to patients and communities. Long-term commitment in the face of short-term trends and opportunities. A physician-hospital relationship that fosters a symbiosis of service. Institutional voluntarism that allows institutions to be both provider and beneficiary of community service. In this article, the author seeks to remind leaders of voluntary, not-for-profit institutions, including Catholic institutions, that they neglect community service at their own peril.

A higher standard. Report tells Congress to let regulators strip tax-exempt status and go after boards that approve unreasonable executive pay

It's time to give regulators the power to strip the tax-exempt status from charities that offer unreasonable executive compensation. That's the word from the Panel on the Nonprofit Sector's report to Congress. The report's 120 recommendations come amid increasing scrutiny of not-for-profits, and a spokesman for Sen. Chuck Grassley, left, says the Iowa lawmaker hopes to introduce legislation on the matter soon.

Looking harder. Not-for-profit hospitals use Sarbanes-Oxley to strengthen their boards' financial accountability

The Sarbanes-Oxley Act is intended to improve corporations' financial accountability, but boards of not-for-profit hospitals are taking their own cues from its provisions.