As printed in Michigan Health & Hospitals Magazine, Sept/Oct 1998

The Community Benefits Column

Community Benefits are Key: A Common Link for Effective Integration

By Robert M. Sigmond

As the Michigan Health & Hospital Association leads the nation in the commitment to build healthy communities, other organizations are becoming involved in many different kinds of community initiatives
with confusion and even conflict resulting. With community concepts assuming a central role in local
health care reform, differing methodologies present major challenges in demonstrating benefits
to target communities.

Think about community service, community rating, community medicine, community planning,
community benefits, community care networks, community development, community empowerment,
healthy community collaboratives- and more. All have a role in the transformation of health services organizations, but community benefits are key because they represent the common link for most
effective integration (see:sidebar). Visualizing how these different initiatives evolved provides useful
clues for maximum community benefits from these efforts.

Community Service

Community service is the most traditional function of hospitals and other health services organizations. Before scientific medicine, protecting the community from exposure to dangerously sick people even took precedence over quality patient care. By the 20th century, the classical division of hospital functions was patient care, education, research and community service. More recently, community service has encompassed all activities not responsive to marketplace incentives, including almost all education and research as well as unreimbursed patient care. Community service has a proud history, reflecting an organization’s altruistic mission and the ethical motivation of many of the staff. Nationally, community
service accounts for more than $ 15 billion of annual hospital expenditures and is usually expressed in
terms of inputs rather than outputs or results. The challenge is to reshape these expenditures to reflect explicit community benefit goals.

Community Rating

Community rating was a key element of the first community collaboration among hospitals in the 1930s. Community rating sets undifferentiated capitated prices so that those requiring the most services are supported by those who are fortunate enough to require little service. An alternative to experience rating
that allows the healthier population to avoid community obligations, community rating is now becoming
more closely related to integrated delivery and a major factor in local health system transformation. It is
the key to the community benefits of financing initiatives.

Community Medicine

Community medicine has taken many forms in the effort of clinicians to pioneer in local health care.
These include community health centers, community mental health centers, community oriented primary care clinics, women’s health centers and more. Community medicine brings clinical and community leadership together in integrating the care of patients, populations and communities, with heavy emphasis
on prevention and healthier life styles. Often overlooked, the challenge is to bring their pioneering spirit
into community benefit projects.

The Community Care Network Vision

The community care network (CCN) vision was developed by the American Hospital Association as its approach to local health care reform. CCN builds on traditional community service, incorporating community medicine and capitated managed care and the commitment to community benefits as well. The CCN vision sees reformed local health networks incorporating four dimensions: community health focus, community accountability, managed risk sharing of limited resources, and a seamless continuum of patient, population and community care.

Healthy Communities Collaboratives

As contrasted with the CCN vision that originated in the provider world, the healthy communities vision represents a different perspective, in which the role of provider organizations is important but necessarily limited. Now adopted by the American Hospital Association, this vision emphasizes notions beyond the medical model and even the traditional public health model, including community development, lifetime education, employment security, family values and diversity. Healthy community collaboratives see community empowerment as an essential key to community health improvement.

Community Benefits

With the evolution of tax-exemption standards beyond charity patient care to a broader charitable concept
of caring for the entire community, the community benefits concept originated with the Internal Revenue Service. More recently, community benefit has been defined operationally as community service with
an outcome orientation.

Along with managing capitated programs, community benefit programs are becoming the starting point for local health care reform of individual provider organizations. When effectively managed, they bring together
all of the organization’s involvement with the different kinds of community initiatives.

The greatest challenge facing community benefit managers is enlisting those within the institutions who
are focussing sharply on care of patients and populations, with little understanding of the importance of collaboration to benefit targeted communities. A secondary challenge is enlisting others who are focussing sharply on community outreach, unaware of the potential community benefit contribution of those within
the organization who are dedicated to quality patient care. As health services organizations embrace
various community initiatives, structured internal collaboration is the necessary foundation for sustainable outreach beyond the walls.