• Align hospital investments with the needs of their communities;
• Address the lack of focus on equity in existing community benefit strategies and investments; and
• Ensure responsible use of the nonprofit hospital charitable tax exemption.

How Hospitals Address COVID-19 Inequities

Hospitals are on the front lines of this pandemic; many struggle to meet surge demands for care, which are straining hospital staff and budgets. Despite these challenges, some hospitals are also reaching out to their communities and creating partnerships to improve access to COVID-19 testing and treatment for populations that have been disproportionately impacted.

The Catholic Health Association has outlined how hospitals can shift their community benefit programs to respond to the pandemic through community health improvement activities, such as:

• Promoting awareness and education activities for the community and first responders (e.g., telephone hotlines, public service announcements, and media responses);
• Charging only nominal fees for services or screenings for COVID-19 and flu immunizations, and improving access through mobile units and off-site testing;
• Having executive and other employee time dedicated to planning for and recovering from the public health emergency;
• Providing community mental health services;
• Launching interventions to address the social needs of the community (e.g., social and environmental improvements, such as reducing food and housing insecurity); and
• Establishing command centers specific to disaster readiness.

These community health improvement activities have the potential to help address the underlying inequities leading to disparities in COVID-19 and other health outcomes. This represents a sea change as most hospitals have not addressed the equity concerns that communities raise, and community health improvement activities represent only 0.37 percent of total community benefit spending, according to 2014 IRS data.

There are some examples of hospitals that do address COVID-19 inequities though community health improvement services. These bright spots exemplify the importance of:

• Responding to community health needs identified by community residents;
• Partnering with community-based organizations that serve and have the trust of historically marginalized populations; and
• Leveraging hospital data to identify needs, as well as the critical importance of addressing social determinants of health, such as education and employment.

These examples demonstrate ways that hospitals can address equity.

• Children’s Hospital of Philadelphia partnered with the Philadelphia Housing Authority (PHA) and a local catering company to provide free family dinners at two PHA locations in West Philadelphia from April through June.
• MetroHealth (Cleveland) Institute for HOPE and the Greater Cleveland Food Bank are partnering to deliver fresh produce directly to patients’ homes. The hospital identified patients who most need the food deliveries by looking at its top utilizer zip codes and identifying people who had been regularly visiting its on-site food distribution.
• Kaiser Permanente has dedicated $1 million to increase capacity for preventing and treating COVID-19 among the homeless. Kaiser has partnered with National Health Care for the Homeless Council to make grants to local homeless shelters to increase their capacity for services and outreach.

 Community Benefit Obligations of Nonprofit Hospitals during the Pandemic

Nonprofit hospitals have a mandated Internal Revenue Service (IRS) obligation to provide community benefit, even if they are struggling to meet the demands of COVID-19. In 2011, hospitals benefited from at least $24.6 billion in tax exemptions, according to a 2015 analysis that used the most recent data available. In lieu of these taxes, hospitals are required to provide community benefits. According to a recent study, community benefit spending remained flat between 2011 and 2017, and community benefits may shrink as hospitals grapple with diminishing bottom lines amid the pandemic.

Every three years, the IRS requires nonprofit hospitals to complete a community health needs assessment (CHNA) with input from a public health department and medically underserved, low-income, and minority populations in their communities.

It is particularly challenging to engage residents and community leaders in this time of social distancing when many hospital staff are working at or over capacity to respond to COVID-19. Some nonprofit hospitals have been granted an extension until the end of the year to complete their scheduled CHNAs. Others may choose to do a limited or rapid needs assessment to update their pre-COVID-19 assessments. However, if CHNAs are not completed or are not updated to take COVID-19 into account, it raises the question of how hospitals will respond to urgent community needs and continue to meet the requirements of their tax-exempt status.

CHNAs have been the key method states have used to ensure that hospital community benefit investments are directed toward current community needs, as expressed by communities. Some states, as detailed below, go beyond the federal requirements through legislation and licensure to explicitly require that hospitals tie their community benefit implementation plans to their needs assessments. As COVID-19 reveals long-standing health inequities, it is more important than ever that hospitals work with residents to identify and address community needs and underlying inequities.

Currently, a focus on equity in community benefit strategies and investments in CHNAs is lacking – though equity is raised when assessing community needs. A 2016 study of urban nonprofit hospital CHNAs found that 65 percent cited health disparities or health equity explicitly, 100 percent referenced health equity implicitly, and 75 percent reported that external stakeholders identified health equity as a need. Yet, only 46 percent prioritized health equity in their CHNAs and a mere 9 percent of the hospitals’ implementation strategies included activities explicitly designed to improve health equity.

States are beginning to address this disconnect because equity is a demonstrated, high-priority need that the pandemic has laid bare. Community benefit is a lever states are beginning to pull.

Current State Efforts to Leverage Community Benefit Investments

States are continuing, even now, to leverage hospital community benefit requirements and hold hospitals accountable to invest in community health improvement. They’re using a variety of state levers, including state licensure and certificate/determination-of-need approval processes.

This is especially important now because charity care – a component of community benefit – may increase due to the economic downturn. States that want hospital community benefit programs to also focus on addressing community needs and social determinants of health will need tools to communicate their expectations and monitor modifications.

States are going beyond the federal community benefit requirements to ensure:

• Authentic and meaningful community engagement and input;
• A focus on identifying, tracking, and reducing disparities identified in CHNAs;
• Community benefit spending advances state priorities as identified in CHNAs and statewide health improvement plans;
• Hospitals work with public health to align assessment and tap the capacity of public health to address health equity and social determinants of health;
• Investments in equity are in alignment with state-supported, local, cross-sector collaboratives addressing health equity; and
• Hospital community benefit reporting that makes transparent the connection between real investments and identified community needs.

Ensuring Authentic and Meaningful Community Engagement and Input

States can work to ensure that hospitals truly seek out and act on meaningful input from a wide range of community representatives. Prior to the outbreak of COVID-19, Maryland enacted legislation (effective July 1, 2020) requiring its Health Services Cost Review Commission to establish a Community Benefit Reporting Workgroup and to adopt regulations based on workgroup recommendations. This law expands on the federal requirements for community engagement by requiring that the workgroup include people impacted by hospital community benefit spending. The law also requires hospitals to not only solicit and take into account input from individuals who represent the interests of their communities, but also to conduct their CHNAs in consultation with community members, which may look different due to COVID-19, but remains critical.

In addition, four states (California, New Hampshire, New York, and Rhode Island) statutorily require that certain communities or groups, such as community organizations, members of the public, or racial and ethnic minorities, be represented in the CHNA, above and beyond what the federal government requires. A Texas statute encourages hospitals to consult with certain groups or entities when assessing community needs. Researchers have also recommended that states require engagement of community members and organizations in the development of community benefit implementation plans, in addition to the CHNA.

Community health improvement initiatives are proven to be more effective when communities are engaged throughout the process. The examples above illustrate some strategies for engaging the community in needs assessment and are feasible even during a pandemic. Hospitals can develop partnerships with community organizations that serve and have the trust of vulnerable communities. They can also analyze patient data to identify needs and combine them with direct input from community members.

Identifying and Tracking Reductions in Disparities in CHNAs

Maryland requires CHNAs to describe a hospital’s effort to track and reduce disparities in the community. Requiring efforts to address health disparities as part of state community benefit requirements is a critical policy to improve equity, yet is not a federal requirement nor are disparities even mentioned in the federal regulations.

Addressing Community Needs and Advancing State Priorities

States are working to ensure that community benefit implementation plans address the needs identified by the CHNA process using strategies for engaging the community in needs assessment. Maryland’s new law requires hospitals to submit an annual report describing how each of the activities undertaken by the hospital addresses the community health needs of the hospital’s community, a description of gaps in the availability of providers to serve the community, and a list of the unmet community health needs identified in the most recent CHNA. Although this law is new, other states may find it a useful model for tying community benefit investments to documented needs.

Some states have aligned their community benefit requirements with State Health Improvement Plans (SHIPs) developed by public health departments. New York requires that hospital Community Health Improvement Plans specifically address goals contained in its SHIP, known as the Prevention Agenda 2019-2024. New York also requires hospitals to report their community benefit spending, and how it relates to its prevention agenda. Improvement plan.

Massachusetts has aligned community benefit requirements with state health priorities by tying the Department of Public Health’s Determination of Need process to standards for community engagement and social determinant of health investing. While the process is currently underway, the Massachusetts Attorney General’s office is considering how to give nonprofit hospitals the flexibility to bring an equity lens to addressing the needs revealed by COVID-19.

Promoting Collaboration with Public Health Departments

New York encourages hospitals to work with public health departments on both their CHNAs and the related community health improvement plans. This link to public health is a key policy to ensure the capacity to address health equity, which is a foundational principle of public health. The authors of the 2016 study of CHNAs conclude that hospitals might have the will to promote health equity, but not necessarily the know-how.

Working with public health departments is also important to reduce duplication, considering both nonprofit hospitals and public health departments conduct regular community health needs assessments. Maryland requires hospitals to consider the most recent community needs assessment developed by the state or local health department when identifying community health needs. Five states go further (ME, MA, NH, NY, and TX), requiring or encouraging local public health officials to be involved in the community needs assessment process.

Aligning Community Benefit with Local Health Improvement Coalitions

In 2015, Rhode Island began implementing Health Equity Zones (HEZs) which now exist in 10 communities across the state. HEZs are geographic areas where the Rhode Island Department of Health invests a blend of funding streams to address differences in health outcomes. Local, cross-sector coalitions conduct a collaborative, community-driven needs assessment and implement a plan to address the identified needs. For example, the Southside, Elmwood, and West End Health Equity Zone in Providence galvanized residents to advocate for housing as a social determinant of health, achieving the remediation of several blighted properties, hosting a Neighborhood Housing Summit, and advancing equitable housing policy.

Rhode Island (prior to COVID-19) required two hospitals to invest in their local HEZs and collaborate with them on their CHNAs as a condition of approval for changes sought under the Hospital Conversions Act, which governs changes in hospital ownership and significant reductions in certain hospital services. Although not directly tied to community benefit, the advent of Rhode Island’s Health Equity Measures this year creates additional opportunities for alignment between the HEZs, the state’s health equity goals, measures, and hospital community benefit.

Establishing Transparent Reporting that Ties Investments to Community Need

Maryland requires nonprofit hospitals to submit an annual community benefit report including a list of the initiatives that were undertaken by the hospital and the cost of each. New York asks hospitals to report itemized community benefit spending. Connecticut, as a part of its certificate-of-need process, similarly requires that hospitals identify community benefit dollars spent on specific needs identified in their CHNAs. New Hampshire and Vermont also require hospitals to report community needs from the most recent CHNA and tie these to community benefit spending.

The Way Forward

COVID-19 has drastically altered the health care landscape in the United States. As states struggle with reduced budgets and revenue, they need to leverage every resource available for community health improvement, particularly for the most vulnerable residents. Hospitals are on the frontline in communities, leading testing and treatment. Community benefit provisions hold nonprofit hospitals accountable for investing in communities in return for the federal tax breaks they receive. As hospitals pivot community benefit investments to respond to COVID-19, states can ensure that the underlying inequities exposed by the pandemic are addressed. States can develop strategies that hold hospitals accountable while balancing the many COVID-19-related demands. States can and are going beyond federal community benefit regulations to ensure that the associated investments are responsive to the needs of their most at-risk populations to reduce glaring inequities and move, ultimately, toward long-term resilience for all communities.