Not-for-profit systems still working on community outreach

Many advocates for low-income communities expected major healthcare systems would be driven to boost their investment in community programs aimed at improving overall population health as more patients became insured and care moved to value-based payment.

And some of the nation's leading healthcare systems are moving in that direction. They are beginning to deploy their physician networks in innovative programs aimed at reducing the incidence of diabetes, hypertension and drug abuse, which undermine the health profile of the low-income communities they serve.

Great Neck, N.Y.-based Northwell Health, for instance—which over the past two years has added hospitals and physician practices in low-income areas of Queens and Brooklyn to its suburban Long Island base—created an Office of Community and Public Health as early as 2012. The goal was to narrow the health disparities between the poor and affluent communities it serves.

“It was no longer acceptable to us to just run our practices and run our hospitals and not provide opportunities for heightened education on prevention and wellness to be really respectful of diversity and health literacy concerns,” said Dr. Stacey Rosen, vice president of women's health at Northwell's Katz Institute for Women's Health.

Rosen said a key component of Northwell's initiative has been the role its physician workforce of more than 2,300 has played in conceptualizing and implementing its community benefit programs. One of the system's larger efforts has been an education outreach campaign intended to help community members make better food and lifestyle choices to lower their risk of developing severe cases of diabetes, hypertension and heart disease.

But the size of its investment in community health still isn't large. And that appears to be the case at most major healthcare systems and their physician networks. And at some, investment in community health is even shrinking.

One reason: the financial incentives behind maintaining their tax-exempt status have yet to substantially change, while the move to value-based care reimbursement—which will drive a greater emphasis on prevention—is just getting started.

“Part of the challenge has always been based on the way health systems and physicians are paid,” Rosen said. “As we move toward payment models that focus on quality and avoiding disease and staying healthy, I think we will come up with more and more processes that will have to be focused on the communities and be respectful of all of the communities we serve.”

Maintaining their not-for-profit tax status requires systems to provide community benefit. That has historically been demonstrated by providing uncompensated and charitable care.

A 2013 study published in the New England Journal of Medicine found tax-exempt hospitals in 2009 devoted more than 85% of their community benefit spending to charity care and other patient-care services. Only 5.3% of those expenditures went toward community-health improvement initiatives. A 2015 study in Health Affairs valued tax-exempt status for not-for-profit hospitals at $25 billion in 2011.

The past three years' sharp reduction in the number of uninsured hasn't changed the basic financial equation for justifying that tax benefit. Most of the coverage expansion has come through Medicaid—the lowest-paying insurer. While that results in less charitable care, it creates a comparable if not larger increase in uncompensated Medicaid costs, which is also a component of community benefit.

“The biggest impact of the Affordable Care Act on our organization and probably many others has more to do with the expansion of Medicaid,” said Steven Glass, chief financial officer of the Cleveland Clinic.

The system's investment in community outreach in recent years has actually dropped. In 2015, the Cleveland Clinic reported a net community benefit of $693 million, about 11.3% of total operating expenses, which compares with $754 million and 13.7% of total operating expenses in 2012. That represents about an 8% drop in net community benefit.

Over that period, which spans the major increase in ACA coverage, the amount the system spent on outreach programs declined 22% to $39 million from $50 million. While the amount spent on patient charity care declined 56% to $69 million in 2015 compared to $155 million in 2012, the amount claimed as community benefit to cover the shortfall between what Medicaid reimburses and the actual cost for that care went from $105 million in 2012 to more than $242 million by 2015, up 130%.

The Cleveland Clinic's main campus is located in an area of the city where the unemployment rate averages around 17%, according to data from the center's 2013 community needs assessment report. The area also has a median household income level that's lower than the rest of the region or the state, and an uninsured rate of around 27%.

Like Northwell, Cleveland Clinic has engaged in community outreach initiatives such as holding minority health fairs, wellness education and prevention campaigns. “With the Medicaid expansion, we have seen more patients that have presented that have Medicaid insurance than we've had in the past,” Glass said. “Many of these people had no insurance, and as a result it significantly impacted their access to healthcare.”

A similar scenario is playing out at the Mayo Clinic, where in 2015 its total community benefit was estimated at more than $1.5 billion, which represented 10.8% of its total expenses, according to system reports. It spent just over $73 million on charity care, with shortfalls from Medicaid and other indigent programs costing $476 million.

But according to Martha Cashman, director of community engagement at Mayo, the funding shift does not fully reflect what the system has been able to accomplish in terms of its community outreach efforts. She said for the past several years Mayo has operated a community health worker program that trains individuals to counsel patients with multiple chronic conditions and encourage them to make better health choices.

“We look at this collaboratively and ask ourselves how can we begin to move the needle on issues such as obesity, diabetes, mental health, financial stress and homelessness,” Cashman said.

Dr. Roger Pasinski, director of the Revere HealthCare Center at Massachusetts General Hospital in Boston, believes the ACA and the rise of accountable care organizations have created economic circumstances that make it more likely providers will use more of their community benefit efforts to promote prevention and wellness, which will hopefully lead to lower hospitals cost.

“Once you're running an ACO you really have to prevent the maximum amount of bad outcomes to help yourself survive financially,” Pasinski said. “So I think the ACO progression has kind of helped us redouble our efforts to look at prevention.”

Revere, a community-based, multispecialty group practice owned by Massachusetts General, has run a community benefit initiative for over 20 years. One of its major issues these days is reducing the rate of teen substance abuse.

The Revere center has expanded access to naloxone, the medication that reverses the effects of an opioid drug overdose. The system also employs recovery coaches who offer both inpatient and outpatient counseling services and are trained in linking patients to ongoing community support. Massachusetts General says the programs led to a 12% reduction in the average length of stay for patients who received a consult between October 2014 and July 2015.

Other efforts over the past five years have included work on a food and fitness coalition with community groups to develop walking paths and a farmers market to increase access to healthier eating options.

“I think our community is always grateful when our physicians are out there on an issue,” Pasinski said.