Jill Horwitz writes for Health Affairs Today
 â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â
Problems viewing this email?
View Message In Browser
Tuesday, March 29, 2022 | The Latest Research, Commentary, And News From
Health Affairs
Dear John,
****Today's newsletter comes from the desk of Jill Horwitz from the UCLA
School of Law.
Why Nonprofit Hospitals Can't Fix The Health Care Crisis
As US health spending enters the stratosphere, it is critical to control
hospital costs and protect the increasing number of patients who cannot
afford care.
Doing so needs to be part of a comprehensive federal effort to reform
the health care system.
Policy makers and scholars are instead doubling down on a tired
intervention that has failed for decades-mandating that nonprofit
hospitals provide more free care and community benefits to solve a host
of social problems rather than focus on their charitable, legal purpose:
to promote health.
This intervention is justified by evidence that, by some financial
measures, nonprofit hospitals do not behave differently than
for-profits. However, cost-shifting to nonprofit hospitals will not
solve the health care crisis.
This strategy will likely backfire by increasing expense and waste at
hospitals, further harming the economy and, potentially, the health of
patients.
Targeting hospitals may have the same appeal as banks did for the robber
Willie Sutton: "That's where the money is." Yet, as a group,
nonprofit hospitals are far from flush.
The average nonprofit hospital earns a negative operating margin. In
Sutton's terms, nonprofit hospitals are bad banks to rob.
Requirements imposed by state community benefit laws, the Affordable
Care Act's Section 501(r) exemption rules, and the IRS ask hospitals
not only to identify and address their community's hospital-care needs
but also the financial wherewithal of its patients and the community's
broader health, housing, environmental, workforce, and other social
needs.
Nonprofit hospitals are designed to provide sophisticated medical care,
not health insurance or social services. With few exceptions, nonprofit
hospitals don't have the expertise to be insurers.
Although all hospitals, for-profit and nonprofit alike, should partner
with local social service providers, given their expensive overhead and
personnel, hospitals make for terribly ineffective providers of the
social services related to social determinants of health, given their
expensive overhead and personnel.
Public benefit laws, however, direct hospitals wade into areas outside
their (narrow) expertise.
This is a particularly bad moment to ask hospitals to do more. The
pandemic hit hospital finances hard, even accounting for temporary
federal subsidies.
Adding to their financial strain through indigent care and community
benefit requirements could not come at a worse time. Hospitals across
the country are short-staffed. Workers are burned out, demoralized, and
leaving the field.
Employers are struggling to find nurses to hire despite the seemingly
contradictory fact that unemployment is high, disproportionately so for
nurses who are members of racial and ethnic minorities.
Any profits that nonprofit hospitals manage to earn would be better
spent rebuilding a robust workforce, thus improving the quality of care
for everyone.
Finally, nonprofit hospitals make unique contributions to medical care
that are too often overlooked.
Austin Nichols and I published an article in Health Affairs this month
that evaluates differences in medical service provision
among nonprofit, for-profit, and government hospitals.
The findings extend a long line of research showing that nonprofits are
strikingly different from analogous for-profits.
On average, nonprofits are less likely than comparable for-profits to
offer profitable services such as invasive cardiac treatments, which are
expensive for Medicare and tend to be over-provided.
At the same time, nonprofits are more likely to provide relatively
unprofitable services such as psychiatric care, which are poorly
reimbursed and disproportionately needed by poor and uninsured patients.
Moreover, for-profit hospitals are more likely than nonprofits to
respond to changes in financial incentives.
For example, we found that relative to nonprofit and government
hospitals, for-profits opened emergency departments only when emergency
care became more profitable.
If nonprofits are compelled to spend more on free care and other
community benefits, they will be forced to make up that money somehow.
Competition, coupled with laws such as corporate practice restrictions
in many states, make it hard for nonprofits to control their physician
staffing, so they will try to increase revenues instead.
The obvious response is to provide more profitable, less-necessary care
and bill the government for it. That is an outcome no one wants.
Some nonprofits earn enormous profits, and some of them behave badly,
including by failing to inform eligible patients about mandated
financial assistance programs.
These problems are important and should be addressed. But they are not
the central reason that our system is failing and people are suffering.
This focus on nonprofits is largely a misguided distraction.
Solving the health care crisis that is harming both our economy and our
people will require big interventions and hard choices: imposing price
regulation, making difficult tradeoffs with respect to quality and
quantity of care, finding waste and eliminating it, negotiating drug
prices, addressing physician specialist salaries, reigning in medical
prices and unsustainable administrative costs, and more.
These problems and solutions are the province of a nation, not a
nonprofit hospital.
[link removed]
[link removed]
Seth Berkowitz Puts A Figure To Social Determinant Health Spending
Listen to Health Affairs Editor-in-Chief Alan Weil interview Seth
Berkowitz from the University of North Carolina School of Medicine about
social determinants of health benefit programs, health spending, and
non-emergency medical transportation.
Listen Here
Elsewhere At Health Affairs
Today in Health Affairs Forefront, Scott Weiner and Arjun Venkatesh
state that financial incentives and financial penalties
can end emergency department boarding.
Katie Keith examines the impact of
enhanced
subsidies
under the American Rescue Plan Act (ARPA) and the continued importance
of Marketplace coverage during the pandemic, particularly as Marketplace
enrollment reaches a record high.
Daily Digest
Despite CMS Reporting Policies, Emergency Department Boarding Is Still A
Big Problem-The Right Quality Measures Can Help Fix It
Scott G. Weiner and Arjun K. Venkatesh
Record-High Marketplace Enrollment, But Failure To Extend Subsidies
Could Impact Consumers
Katie Keith
Podcast: Seth Berkowitz Puts A Figure to Social Determinant Health
Spending
Alan Weil and Seth Berkowitz
[link removed]
Jobs At Health Affairs
Health Affairs is the perfect place to advance your career while
contributing to the leading research and analysis on improving health
policy and health care.
Our team contains a deep bench of experienced professionals in health
policy, dedicated to making health care better. Below are the current
job openings at Health Affairs:
* Development Assistant
(New)
* Sales And Partnerships Manager
* Health Affairs Scholar Editor-In-Chief
(Deadline
to apply is March 31)
* Health Affairs Podcast Fellowship
(Deadline to apply is March 31)
Â
[link removed]
[link removed]
Â
[link removed]
Â
[link removed]
Â
[link removed]
Â
mailto:
[email protected]
About Health Affairs
Health Affairs is the leading peer-reviewed journal
at the intersection of health,
health care, and policy. Published monthly by Project HOPE, the journal
is available in print and online. Late-breaking content is also found
through healthaffairs.org , Health Affairs Today
, and Health Affairs Sunday
Update . Â
Project HOPE is a global health and
humanitarian relief organization that places power in the hands of local
health care workers to save lives across the globe. Project HOPE has
published Health Affairs since 1981.
Copyright © Project HOPE: The People-to-People Health Foundation, Inc.
Health Affairs, 1220 19th Street, NW, Suite 800, Washington, DC 20036, United States
Privacy Policy
To unsubscribe from this email, click here
.
_________________
Sent to
[email protected]
Unsubscribe:
[link removed]
Health Affairs, 1220 19th Street, NW, Suite 800, Washington, DC 20036, United States
