5190.0: Wednesday, November 15, 2000 - 2:35 PM

Abstract #11642

Measuring the economic value of hospital community benefits in California

Ed Mendoza, MPH, Elsa Murphy, and David Werdegar, MD, MPH. California Office of Statewide Health Planning and Development, 1600 9th Street, Room 433, Sacramento, CA 95814, (916) 654-1606, emendoza@oshpd.state.ca.us

In 1994, California law recognized that, in exchange for their tax exempt status, non-profit hospitals assume a social obligation to provide community benefits in the public interest. To that end, 209 non-profit hospitals are now required to submit an annual report to the state documenting what community benefits they provide to their communities and quantifying the economic value of these benefit activities. The statute defines community benefit to include unreimbursed costs of providing care (e.g., charity care) as well as new program activities (e.g., community health education) that arise as a result of community needs assessments. Both hospitals and the state have attempted to establish methods for documenting the value of the variety of community benefits reported. However, traditional methods of accounting, usually applied to the unreimbursed cost of care (which are problematic, in and of themselves), do not easily translate to non-traditional hospital services, and cannot be easily applied where community benefit activities involve a broad collaboration among many community partners. This paper discusses the advantages and disadvantages of several approaches to economic valuation ranging from those that are based on hospital accounting principles to those based on a “social accountability model”. The differences in approaches serve to highlight basic value conflicts in the program. Fiscal accountability, which is often focused on a hospital’s unreimbursed cost of care, may not necessarily apply to priority areas identified through the needs assessment process and may not serve to encourage a hospital to expand its scope of services to meet those needs.

Learning Objectives: At the conclusion of session, participants should be able to: (1) describe the California statutory provisions that require non-profit, community hospitals to report community benefits to the state; (2) identify various methods for quantifying the economic value of these community benefits; and (3) discuss the impact of these methods on the nature and scope of community benefit activities

Keywords: Community Benefits, Economic Analysis

Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: California Office of Statewide Health Planning and Development
I have a significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.
Relationship: Employment

The 128th Annual Meeting of APHA