INTERVIEW: Holding hospitals accountable to communities

The Lown Institute’s recent findings on hospital fair share spending shed a light on the deficit between what nonprofit hospitals were given in tax breaks and what they invested back into the community. One of the key takeaways from the findings is that 82% of nonprofits have a fair share spending deficit. How can we ensure that nonprofit hospitals are paying their fair share? What policy avenues or partnerships have worked in the past?

The Lown Institute spoke to Catherine Dunham, MA, EdD learn more about the history of advocacy and policy around nonprofit hospital community benefit.

Dunham was chief policy & cabinet coordinator for the Massachusetts Department of Health and Human Services from 1983-1991, National Program Director for Robert Wood Johnson Foundation from 1992-2006, and former Vice President of Preservation for Affordable Housing. Now retired, Dunham spoke to us about nonprofit hospitals, community benefits, and what it takes to strip a hospital of its tax-exempt status.

Lown Institute: How did you first get involved with work around hospital community benefit?

Catherine Dunham: It really began with my work as the chief policy & cabinet coordinator for Governor Michael Dukakis, where this work was a focus of the state legislature. They passed beneficial legislation that dramatically expanded access to coverage, regulated hospital pricing, and addressed the costs that were sucking available money out of social spending. We realized that the more money the health systems, including hospitals and insurers, are taking up, the less we can invest in other sectors.

From there I worked with RWJF on recognizing community health leadership on the grassroots level, before moving on to Brandeis to work on the Access Project. They were doing some groundbreaking work there – for example, in 1999, they conducted a study on Community Participatory Based Research with local coalitions totaling around ten thousand people. By talking to people in the community, they were able to show that medical debt was a serious problem for the first time. They also were active in the community through educational services, where they would train community members on usable skills to demonstrate what could be done with proper social spending.

We don’t see a lot of consequences for nonprofit hospitals that aren’t fulfilling their social mission. But one prominent example of a hospital paying the price was Provena Covenant Medical Center, which lost its tax exempt status. What did it take for this to happen?

Provena Covenant Medical Center was a nonprofit medical center in Illinois that had really been brutal when it came to medical debt. They faced off with the Champaign County Health Care Consumers, a health consumer organization led by Claudia Lennhoff, who had figured out what was going on with medical debt and had taken it to the local tax board. The Access Project, led by myself and Mark Rukavina, worked with them to put pressure on Provena. There was one egregious case that had caught everyone’s attention, where a man had been admitted to the Provena ER for a suicide attempt and had no income to pay for his care afterwards. They went after him financially, but he was unable to come to court or find representation, and they ended up throwing him in jail over it. The worst part is he was probably eligible for social benefits that could have paid for his treatment, but he either didn’t know about them or didn’t know how to access them.

His case wasn’t unique unfortunately. Outlets like the Wall Street Journal, who we had worked with to publicize the Provena story, also documented horrendous actions by hospitals in the name of medical debt, and the media attention lit small fires under a bunch of hospitals. So the Access Project and the Campaign County Health Care Consumers brought what they knew to the local tax board to discuss Provena’s tax exemption status and medical debt. The local tax board determined what was going on was wrong, but it took around two years to demonstrate the burden that was being placed on the public.

How did other hospitals respond to Provena being stripped of its tax exempt status?

It definitely made them feel a bit of pressure, but I don’t think it was meaningfully effective. If the idea to review nonprofit hospitals had spread to other local tax boards, maybe it would have been more impactful. I remember when the head of Yale New Haven Hospital was called to testify in front of Congress about medical debt and he was indignant. The medical center was wreaking havoc, they had liens on around a third of the homes in New Haven – and when he was called in, he treated it like a waste of time. There were only a few politicians who were attuned to this problem as well. Elizabeth Warren is a great example, she’s been on top of this doggedly since the beginning of her career. The passage of the ACA [Affordable Care Act] also helped because it included more measures to hold hospitals accountable regarding community benefits, but then surprise billing emerged as a major problem and we took a step back in our progress.

The Provena hospital system really did try much harder and got much better afterwards, but the case didn’t impact other hospitals’ behavior in the way we had hoped. New state regulations would have been the primary mechanism of enforcement for other hospitals, and we were in touch and supporting groups in other communities as well, but there was no substantial change. The levers of change are there, but it’s not easy or direct.

You’ve also been able to see how nonprofit hospitals could better leverage their status for the good of the community.

There are definitely ways nonprofits can use their resources to benefit their communities. One of the ways I’ve seen is through investing in affordable housing. It’s a mission related investment and it gives them a reasonable rate of return. They don’t even need to see it as a charitable act, they can see it as an investment. They can keep housing prices reasonable, drastically improving the living conditions of the residents of their community, and they can expect to profit in the long run off of it. It’s not a risky investment and is good for the community, plus it maximizes public relations. Some for-profits like United Healthcare have been investing this way for years. It’s something nonprofits systems should consider.

We’ve seen how difficult it can be to get hospitals to invest in the social determinants of health. Should this type of spending be done through the healthcare system?

No, money for social investments shouldn’t go through hospitals. They add unnecessary overhead. Hospitals shouldn’t be our default for this because their expertise is in acute care, research, and training. Their public health knowledge is biased, and money going through hospitals for social causes is massively inefficient. That doesn’t mean we shouldn’t expect them to help the community, but we need to specify what hospitals should be doing, expect them to allocate a portion of their assets into the community, and then redirect the other funds directly to the social determinants of health.

Cathy Dunham was the chief policy and cabinet coordinator for Massachusetts Governor Michael Dukakis from 1983-91. She then founded and led two national programs focused on community health and health care access for the uninsured for the Robert Wood Johnson Foundation from 1992-2006 (The Access Project, and the Community Health Leaders Award program). Her most recent work focused on connecting affordable housing to health systems as Vice President of Preservation of Affordable Housing (POAH). Cathy holds a doctorate degree in Education and Social Analysis from Clark University.