Policy commercializing nonprofits in health: the history of a paradox from the 19th century to the ACA

POLICY POINTS: Health policy in the United States has, for more than a century, simultaneously and paradoxically incentivized the growth as well as the commercialization of nonprofit organizations in the health sector. This policy paradox persists during the implementation of the Affordable Care Act of 2010.

CONTEXT

For more than a century, policy in the United States has incentivized both expansion in the number and size of tax-exempt nonprofit organizations in the health sector and their commercialization. The implementation of the Affordable Care Act of 2010 (ACA) began yet another chapter in the history of this policy paradox.

METHODS

This article explores the origin and persistence of the paradox using what many scholars call "interpretive social science." This methodology prioritizes history and contingency over formal theory and methods in order to present coherent and plausible narratives of events and explanations for them. These narratives are grounded in documents generated by participants in particular events, as well as conversations with them, observing them in action, and analysis of pertinent secondary sources. The methodology achieves validity and reliability by gathering information from multiple sources and making disciplined judgments about its coherence and correspondence with reality.

FINDINGS

A paradox with deep historical roots persists as a result of consensus about its value for both population health and the revenue of individuals and organizations in the health sector. Participants in this consensus include leaders of governance who have disagreed about many other issues. The paradox persists because of assumptions about the burden of disease and how to address it, as well as about the effects of biomedical science that is translated into professional education, practice, and the organization of services for the prevention, diagnosis, treatment, and management of illness.

CONCLUSIONS

The policy paradox that has incentivized the growth and commercialization of nonprofits in the health sector since the late 19th century remains influential in health policy, especially for the allocation of resources. However, aspects of the implementation of the ACA may constrain some of the effects of the paradox.

What have you done for me lately? Assessing hospital community benefit

This issue brief reviews key aspects of the ongoing policy debate related to not-for-profit hospitals, the advantages they derive from tax exemption, and the benefits they provide to communities served. It provides a historical context for how federal standards for assessing hospitals' tax-exempt status have evolved and describes recent activities to explore additional policy changes. Legislative and regulatory actions at the state and local level are also examined. Evidence on the performance of not-for-profit hospitals in comparison to their for-profit competitors on measures of cost, quality, and access is summarized, and perspectives on the need to preserve a not-for-profit presence in health care are explored. Efforts to develop standardized metrics for measuring community benefit are described, and alternative conventions for reporting charity care contributions are discussed.