Financial Implications of Community Benefit

Karen Minich-Pourshadi, for HealthLeaders Media , October 13, 2010
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"When you do the needs assessment, you realize that there are a lot of health needs in the community and you need to really target the critical areas," he notes. "The placement of resources really can make the difference, and it truly demonstrates how the health system provides a community benefit. The placement of those resources doesn't necessarily align with our organization's business strategies, but it all goes back to being a mission-motivated organization."


Angela M. Haggard, system director of community benefit for Provena Health, a 1,700-bed Catholic health system in Mokena, IL, agrees that mission takes the priority over the tax benefits. Provena Health looks for ways to benefit the community while taking into account the facility's strategies. Every three to five years the hospital partners with other organizations in the community to do a community needs assessment. On an annual basis it looks at the needs assessment to determine where to put its resources. 

"The biggest challenge is there is so much need and a limited amount of charitable resources," she explains. "So we try to link our strategic plan to these programs. You still want to grow, and these programs can work in tandem with your plan."

While the community benefit program selection process can be tied in to a facility's mission and strategic plan, it still needs to make a measurable impact on the health of the community.

"The calculations for this assessment are very detailed, and it looks at our cost-to-charge ratio. But the requirements for the state and federal governments don't match," she notes. To ensure the trackability of these programs and prevent disparity between the reporting requirements, Provena Health uses Lyon Software, a Sylvania, OH-based community benefits business. The program gathers quantitative  information, including the number of people it serves, program outcomes, and impact on the community.
From the tracking, another peripheral benefit can arise. Sandy Kraiss, senior director of finance for the Illinois Hospital Association, notes that tracking the community benefit can open up the opportunity to tell your story.

Everybody involved in a program that benefits a community needs to track these stories and begin to tabulate them as part of the tracking process, Kraiss says. "Everybody on your leadership team and in your communications department needs to be aware of what you are doing to benefit your community."

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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