Hospitals everywhere are under intense pressure to reduce costs and improve services. At the same time, every hospital is working hard to show why it makes a positive difference in the community.
Some hospital groups are seeking to get the government involved through community-benefit legislation. An article in MODERN HEALTHCARE*(April 22, p. 17) reported on the debate on such legislation in Tennessee. As the individual responsible for Columbia/HCA Healthcare Corp.'s work on this legislation, I would like to set the record straight on Columbia's position and correct several factual errors in the article.
No hospital needs government permission or direction to report on the benefits it provides to the community. When hospitals do this it is called "marketing," and it is an increasingly important part of what hospitals do. When hospital groups seek to involve government, they are often trying to convince the government that the benefits it has bestowed upon them are worthwhile or that their competition is somehow not meeting the government's legitimate expectations.
This is not only an issue between the for-profit and not-for-profit sectors, but it will increasingly become an issue within the tax-exempt sector as competing not-for-profits go head to head in many markets.
Given the dramatic changes occurring in the healthcare system, it is important that citizens be given meaningful information upon which they can make informed judgments. When we do this as individual hospitals or systems, it is marketing, and we properly put our best foot forward. When it is done in response to a government mandate, the public has a right to assume that the information is based on an impartial and objective standard. Columbia will support community-benefit legislation that provides meaningful information based on objective standards.
As this issue is discussed in Tennessee and other states, we believe several basic principles are essential. First, communities, not hospitals, should determine their healthcare needs. The Hospital Alliance of Tennessee proposal considered in the Tennessee General Assembly this year would have permitted hospitals to report virtually anything they do as community benefit.
The only responsible approach is to measure every community's needs through a careful self-appraisal conducted by healthcare professionals, consumers and business leaders, independent of any hospital.
Second, hospitals should be given credit for the benefits they actually give to communities. Some hospitals pay taxes, others don't. The working families in every community pay higher taxes so that those hospitals that don't pay taxes can keep their money to provide benefits for the community. In fact, the average working family in Tennessee pays about $130 in additional taxes so that not-for-profits will not have to pay taxes.
Any community-benefit law must ensure that all hospitals file community-benefit reports, but not-for-profits must be held accountable for the benefits they provide in return for their tax-exempt status.
Real community-benefit legislation will give citizens understandable information about how hospitals use the money given them by their communities. To accomplish this we must put a reasonable value on the amount of taxes communities allow hospitals to keep each year to provide these benefits. This information, together with the charitable contributions hospitals receive, will allow citizens to compare the benefits provided by hospitals with the funds communities have given them for these benefits.
If some hospitals come up short, they will no doubt be subjected to community pressure to improve. Those hospitals providing real value-benefits in excess of what they have been given-will be properly recognized and supported for their efforts.
While local communities have different healthcare needs, there are two priorities that should be set by states in any legislation on this topic. Those are care for the uninsured and medical education. The uninsured must be served when they need health services, and there should be no higher priority given to the resources that communities give hospitals than to provide for care of this population. Education also must continue to be a top priority in every community. However, each community must carefully evaluate its future healthcare needs when investing in the training of healthcare professionals.
Community-benefit legislation must also avoid any incentives that reward higher healthcare costs. The Hospital Alliance of Tennessee proposal would have given more community-benefit credit to hospitals with higher costs. This problem occurs because the legislation would have measured community benefit as the difference between the cost of a service and the reimbursement received for providing that service. Thus, an inefficient hospital with unnecessarily high costs would get more "credit" for providing community benefits than a comparable, more-efficient hospital with lower costs.
This is the opposite of what sound public policy should encourage. Community-benefit legislation should encourage the delivery of high-quality, cost-efficient healthcare services as one of the most important benefits that any hospital can provide to its community.
With respect to the inaccuracies in the April 22 article, Columbia never proposed any amendment to the hospital alliance bill that would have made the reporting requirements apply only to tax-exempt hospitals. Also, the audit provision that killed the bill was not added at the request of Columbia, although Columbia does support an audit provision. It was actually added by the alliance at the request of consumer groups and several members of the General Assembly.
Community-benefit legislation that provides meaningful and understandable information upon which citizens can fairly judge a hospital's contributions can be a real plus in this time of rapid change in healthcare. We need better measures to ensure that the changes that are occurring are positive for all our citizens. Any legislation that does not meet this test is little better than a state-sponsored advertisement.
Editor's note: Columbia executives did not respond to an interview request regarding the recent defeat of community-benefit legislation in Tennessee.