The question of whether hospitals in Orange County and other parts of California are providing “appropriate” amounts of community benefit spending surfaced again last month. Such spending has come under scrutiny in recent years.
This time, the Berkeley-based Greenlining Institute issued a report that contends there’s no way to discern whether nonprofit hospitals in California are spending the appropriate amounts of their operating budgets on community benefit spending in exchange for corporate income tax exemptions and property tax exemptions.
Community benefit, as required by tax law, involves programs that improve the health of the populations hospitals serve and can also include charity care for patients who can’t afford to pay their medical bills.
The nonprofit group examined Irvine-based St. Joseph Health and six other large nonprofit hospital operators in California. St. Joseph’s local holdings include St. Joseph Hospital-Orange, St. Jude Medical Center in Fullerton and Mission Hospital, which has campuses in Mission Viejo and Laguna Beach.
The group, which based its study on public data, found that the seven hospitals spent about 7.2% of their operating budgets on community benefit spending, the majority of that on charity care rather than on community health improvement programs as the tax exemptions require.
“When we delved into the data, we found that the publicly reported information for the largest companies is so opaque and incomplete it’s almost like a black box,” Carla Saporta, the report’s co-author, said in a news release.
The report recommended that state law be aligned with portions of federal healthcare reform that address community benefit spending.
The report came under fire even before it was released. The Sacramento-based California Hospital Association issued a statement a day prior to its release, saying the report “troubled” it.
The association contended that the report is “heavy on political rhetoric and light on substance” and noted that many of its suggestions are already part of state law.
The association, to bolster its point, mentioned St. Joseph Health’s funding of the Garden Grove-based Healthy Smiles for Kids of Orange County nonprofit organization as an example of an effort that benefits a community’s health. Healthy Smiles has a stationary dental clinic in Garden Grove and a mobile clinic that visits area schools to perform dental screenings and fluoride treatments.
The association argued against creating one-size-fits-all standards for community benefits spending.
Community benefit dollars are “extremely important to us,” said Dulce Medina, Healthy Smiles director of programs and outreach, in the news release.
Association Chief Executive C. Duane Dauner even cited federal healthcare reform in the release:
“Locally developed community benefit plans are an important part of ACA implementation and should not be replaced with a one-size-fits-all mandate from Sacramento. That would undermine the ability of hospitals to meet their community’s specific needs.”
The association also took a shot at Greenlining’s suggestion that hospitals “become social organizations” that help change nonhealth-related conditions in their communities.
“Hospitals are being squeezed by Medicare and Medi-Cal payment cuts and are not paid to get involved in people’s housing, work and recreational lives,” CHA said.
The pair also traded shots about how data was obtained. Greenlining said that the seven hospital systems and the trade group were unwilling to provide data in addition to publicly available information.
The association said it directed the institute to the Office of Statewide Hospital Planning and Development website for more current data, as well as offered to work with Greenlining “but received no response.”
St. Joseph Health welcomes discussion of community benefit, Chief Executive Deborah Proctor told the Business Journal in a statement.
“Since our start, we have always invested in our communities, focusing on services for the poor and vulnerable,” she said. “In fact, we would do this without government regulation as it is the right thing to do. As reported in the Greenlining document, our contributions have been consistent and our funding has been dedicated to much-needed medical care.”
Nurses Get A Raise
After signing a new contract, nurses at UC Irvine Healthcare and other University of California hospitals and student health centers represented by California Nurses Association-National Nurses United will get a 4% pay increase across the board for each of the next four years.
The deal covers 12,000 registered nurses across the state.
Two-tiered pensions—something the union argued is important to retain benefits equality for future nurses—were among the issues National Nurses United successfully fought the UC system over.
“The unity and militancy of UC nurses was the key to maintaining our single-tier pension,” said Tam Nguyen, a nursing association board member who works at UC Irvine Medical Center.
The association also pointed out that the deal recommits UC to provide lift teams for hospital patients in order to prevent patient falls and accidents and injuries to nurses. It said nurses who the union represents will appoint direct-care nurses to hospital committees that review and update patient classification systems that determine if registered nursing staffing needs to be increased based on the severity of individual patients’ illnesses.
