Arthur C. Sturm, Jr. 

Does your community benefit program have enough benefit? More important, can you prove that it does?

As more and more states and local municipalities scrutinize hospital records to see if they indeed qualify for tax-exempt status based on some measure of "community benefit," the need to advance those programs to higher levels of reporting becomes increasingly important. First, documented community benefit speaks to the core of the mission of not-for-profit hospitals. But equally important is the need to respond more effectively to government bodies. Those who don't qualify may lose their tax-exempt status and end up on the local property tax rolls at minimum-and perhaps even on the state income tax list.

Historically, hospitals have used broad measures such as total dollars spent on charity care and outreach to make the argument that they are indeed providing community benefit. But as officials become more demanding for harder facts-particularly for proof that community benefit activities are generating measurable outcomes-hospitals are forced to sharpen their thinking or else reluctantly start writing checks.

So the more you can demonstrate a clearer community benefit linked to improved outcomes or health status, the stronger your delivery of your mission and the more concrete your case for retaining tax-exempt status. 

Your Customer Database: A Familiar Resource with a New Purpose

Ironically, one of the newest tools to document community benefit may already be at your disposal. It's your customer database.

Customer databases-operating under monikers such as customer relationship management, relationship marketing programs, and the like-are helping hospitals understand how to reach, motivate, and track individuals along specific product lines. The data document the services and associated revenue across product lines and provide a platform to educate patients on other programs the hospital has to offer. A typical example is cardiology. Rather than simply identifying the revenue of an open-heart procedure, the hospital can look at the total financial contribution of a cardiology patient from the initial contact point, such as a screening, to post-discharge activities. The hospital can then educate the patient on noncardiovascular services that other CV patients have used, such as orthopedics.

The same approach can be applied to community benefit.

Essentially, hospitals can do a better job documenting both the scope of the outreach efforts and the health improvements of the underinsured or uninsured patient. The approach uses the same infrastructure, programs, and reports found among the insured population, but now hospitals can go beyond reporting the gross financial impact of charity care. While most billing systems capture transactions, a customer management system tracks people from their first point of contact, through inpatient or outpatient care and continuing use. "First point of contact" includes screenings and other public events that historically have not been included in an individual's record.

The approach supports guidance provided by the American Hospital Association in a Nov. 13, 2006, letter to members that stated: "Although total dollar value is very important ... there is another number that's even more important. That's the number of people whose lives are made better and healthier because of the very special work you do as part of your historic mission." 

Providing a Before-and-After Picture

"We're going to use our customer data to track community benefit in very clear and meaningful terms," said Alex Bacchetti, regional vice president of planning and business development for Provena Northern Illinois Region. "Our goal is to do a better job of taking historically soft services like community screenings and turning them into documented gateways for community benefit."

Once the database is built, Bacchetti and his team will track individuals from point of contact such as a community screening through clinic experience. But rather than looking for profit, they will be measuring community benefit by identifying the number of individuals reached, those at risk, and the subsequent care and improved health status through services at the hospital. Depending on the service offered, the hospital will have a true before-and-after picture of the individuals it has served. Armed with those statistics, the hospital will be in a better position to present government officials with hard data on the scope of care provided to an uninsured population, and how that contributes to health improvement. 

Early Tests Show Results and Provide Direction

As a precursor to the more comprehensive effort, Provena points to its recent experience that shows that interventions with indigent individuals can make a difference. Working under a Healthy Communities Access Program grant (a federal program to improve access for uninsured and underinsured), Provena placed ambassadors in its emergency departments at two facilities to help uninsured individuals find a medical home after discharge from the ED. The program aims to make improvements in four areas: 

  • Access to primary care
  • Access to prescription drugs
  • Access to subspecialists
  • Management of chronic disease

Although the program is in its infancy and data are only beginning to be analyzed, the initial results appear dramatic.

Two test sites were used. At Provena Mercy Medical Center in Aurora, Ill., repeat visits to the ED declined by 58 percent. More dramatic, the same program at Provena Saint Joseph Hospital in Elgin, Ill., saw recidivism decline by 61 percent.

"Through our customer database, we will now be able to track these individuals through our care stream to better document access to necessary health services, cost savings to the government through more appropriate utilization of the ED, as well as the hospital's financial contribution," said Bacchetti. "The more we can document both the care and contribution, the bigger the win for all parties involved, especially the uninsured and underserved."

Provena's approach will centralize an individual's "experience" in one central database to simplify tracking and reporting. It will be the first time the hospital will be able to look at the impact of outreach programs and their ability to find individuals at risk who are then treated. Thus the hospital will have a complete record of all encounters, interventions, health improvements, and related costs in one database to present as part of its evidence of providing community benefit.

What's in Your Customer Database?

Customer databases can give hospitals needed support to their community benefit proof by documenting a wide range of metrics, starting with the number of individuals served and including: 

  • Cost of outreach programs
  • Number of individuals identified as at risk
  • Number of individuals who received subsequent care (short- and long-term)
  • Improved health of those served, as seen in lower use of high-cost services such as the ED or better management of chronic conditions such as diabetes

View Exhibit 1

Exhibit caption:About one-fifth of those screened had some type of cardiovascular risk and about the same percentage were seen at the hospital within the following 12 months.

The table above shows how the database can report such activity, using a cardiovascular screening program targeted to an underserved population as an example.

By using their customer database in this way, hospitals can collect the "up-front" information, including cost of services, as well as the "reach" into the community's health. A customer database can also document hospital costs associated with treating those individuals, who without the screening program might never have received the necessary medical interventions.

The pressure to document community service beyond the number of outreach programs will likely only increase. Those hospitals that cannot make a documented case for community benefit may have to divert revenue from general funds to local and state tax rolls. For organizations that have embraced a customer management tool for targeting profitable patients, the conversion to documenting community benefit is relatively simple.

Arthur C. Sturm, Jr., is president and CEO, SRK, Chicago (

Publication Date: Monday, January 01, 2007

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