State laws or guidelines that require not-for-profit hospitals to perform a certain amount of community benefits to retain their tax-exempt status could encourage improved care at private hospitals, as well, according to researchers from the University of Nevada-Las Vegas.
Ten states have community benefit laws or guidelines. Some focus on increasing access to services to improve community health, other laws require hospitals to report the amount of uncompensated care they provide, and some laws require hospitals to do both. Study authors reviewed data from 2000 from all not-for-profit and private U.S. hospitals to examine the effect of community-benefit laws and guidelines.
Researchers concluded that community-benefit laws and guidelines are not strongly enforced but that not-for-profit hospitals' compliance with them can pressure private hospitals, which are not subject to the laws, to offer similar community health services. However, laws that solely require hospitals to report the amount of community services they provided do not necessarily increase actual health programs at not-for-profit hospitals, the study found.
According to the authors, policymakers should consider factors such as cost-effectiveness, competitive strategy and tax exemption when examining not-for-profit hospitals' community-benefits programs. Researchers recommend that if policies are established to enact community benefit laws or guidelines, the laws should include specific details about the health services that are to be provided (Ginn/Moseley, Journal of Health Politics, Policy and Law, April 2006).