Nonprofit Health Entities and Community Benefits

The obligations that a nonprofit has to the public vary by institution based on the nonprofit’s mission and the purposes for which it was organized. Most nonprofits are organized to accomplish some charitable, social welfare, or public benefit purposes. In order for a board to fulfill its mission, it therefore must provide community benefits and be responsive to community needs.

An increasing number of states require hospitals and/or health plans to provide community benefits. Fifteen states have enacted community benefits statutes governing hospitals - California, Georgia, Indiana, Minnesota, New York, Oklahoma, Pennsylvania, Rhode Island, Texas, Utah, West Virginia, Connecticut, Idaho, Maryland and New Hampshire. Click here to open Community Catalyst’s Compendium of State Community Benefit Laws (PDF). In Massachusetts, the Attorney General issued voluntary Hospital Guidelines (PDF) and HMO Guidelines (PDF) for providing community benefits. Most of these laws and the Massachusetts guidelines require health providers to perform community benefits and annually report to the state Department of Health (or similar agency) about the level of community benefits they provide. A number of the laws also require a community health needs assessment and community participation in both development and monitoring of the plan.

With or without state laws in place, health consumers can and should constantly monitor the community benefits provided by nonprofits in their area. The first step is for people to come together to identify community health needs and current problems. Through meetings with a local nonprofit hospital or health plan, communities can learn what the nonprofit is doing to fulfill its charitable mission and obligation. The public can then evaluate current community benefits and decide what benefits they would like to see. This information can form the basis for negotiating with the hospital or health plan, for media coverage about hospital obligations and local needs, and for consumer pressure on the Attorney General and other state regulators and officials to use their authority to make hospitals and health plans better serve community health needs.

In many conversion transactions and in states with formal community benefit requirements, residents have negotiated for much-needed services, including:

• Making care more available to people who otherwise cannot afford it (both hospital and physician services);
• Consumer outreach and related services for new immigrant populations;
• Free prescription drugs for low-income elders and families;
• Increased funding for community health centers;
• New facilities and services in neighborhoods with unmet health needs;
• Improved language translation services and outreach to bring health services to non-English speaking people; and
• Joint planning with local leaders and others for services and programs they need.

Here is a fact sheet written by Community Catalyst, discussing the community benefits standard. “Defending Community Benefits in a Changing Health Care World” (PDF)