Community Investment and the Social Determinants

Nonprofit hospitals spend an average of $67.9 billion annually on community benefits.

2021 is off and running, and healthcare organizations are positioning themselves for success; community investment and development to address the profound costs associated with the social determinants of health (SDoH) is one hot-ticket item, especially for hospitals.

The Federal Reserve Bank of Philadelphia recently released their annual report, Hospital Community Development and Investment, showing that nonprofit hospitals in the United States spend an average of $67.9 billion annually on community benefits. Of these expenditures, over half is spent on patient care: 41.2 percent for unreimbursed care, and 20.9 percent for charity care. These numbers are just the tip of the SDoH iceberg!

The report explores each subcategory for investment, across hospital size, geographic region, and poverty rate. Opportunities abound across various areas for every healthcare organization, through commitment to spending for the following:

  • Physical Improvements and Housing for vulnerable populations, involving neighborhood improvement and revitalization, housing upon inpatient discharge, housing for seniors, and parks and playgrounds;
  • Economic Development to assist small business development and creating employment opportunities in areas with high unemployment;
  • Community Support for childcare, mentoring programs, neighborhood support groups, violence prevention, disaster readiness, public health emergency preparedness, and community disease surveillance;
  • Environmental Improvements to address environmental hazards impacting community health, such as alleviation of water or air pollution, removal or treatment of waste, or other activities;
  • Leadership Development and Training in conflict resolution; civic, cultural, or language skills; or medical interpreter skills for community residents;
  • Coalition Building, as well as participation to address health and safety issues;
  • Community Health Improvement Advocacy to support policies and programs to safeguard or improve public health, access to healthcare services, housing, the environment, and transportation; and finally
  • Workforce Development to recruit physicians and other health professionals to work in underserved areas and collaborate with educational institutions to train and recruit health professionals as needed.
  • There’s also an “Other” subcategory, for activities not described in these categories.

Nonprofit hospitals are facing increased obstacles to pursue their mission of promoting health and well-being, including rising utilization and costs, often associated with high rates of uncompensated care. This rate has risen steadily since $17.4 billion was reported in 1995; it is now at a high of $41.3 billion for 2019, per the recent American Hospital Association Uncompensated Care Cost Fact Sheet. The numbers are expected to rise exponentially in 2020 and beyond from COVID costs. Hospitals must define fresh ways to mitigate these fiscal care gaps, implement new spending priorities, and engage in strategic investments that bridge gaps in funding.

We used our Monitor Mondays Listeners Survey to ask whether listener organizations invested in community development initiatives. The results yielded opportunities for every organization as a whole, and appear here.

Programming Note: Listen to Ellen Fink-Samnick’s live reporting on the social determinants of health on Monitor Mondays, 10 a.m. Eastern.


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