Research Roundup: Community Benefits and Hospitals’ Tax-Exempt Status

Each week, KHN reporter Alvin Tran compiles a selection of recently released health policy studies and briefs.

The New England Journal Of Medicine: Provision Of Community Benefits By Tax-Exempt U.S. Hospitals –The federal health law requires tax-exempt hospitals to assess and address the needs of the community in which they serve by the end of 2013. These hospitals are exempted from federal and local taxes because to help finance their charitable efforts but the question as of these hospitals provide appropriate levels of community benefits remains unclear and controversial. In this study, researchers analyzed 2009 tax reports of more 1,800 tax-exempt hospitals to assess the level and pattern of community benefits they provide. "We found that hospitals devoted, on average, 7.5% of their operating expenditures to community benefits," the authors reported. "However, the level of benefits provided varied widely among the hospitals." They also add that most of those expenditures go to charity care and other patient benefits and compared to other expenditures, hospitals spent little on community health improvement (Young et al., 4/18).

JAMA Internal Medicine: Impact Of Providing Fee Data On Laboratory Test Ordering – Between 2000 and 2009, the number of imaging and diagnostic tests increased by 85 percent – but according to the study authors, empirical evidence suggests that not all tests are needed for provide high quality care. The researchers presented fees of 61 procedures and examinations to physicians and non-physicians at the Johns Hopkins Hospital and compared the number of tests they ordered to a control group of physicians who did not see the cost information. Their study showed a 9.1 percent reduction in the number of tests ordered among participants exposed to the fees. "Displaying the Medicare allowable fees of diagnostic tests at the time of offering can modestly affect provider ordering behavior," the authors  concluded (Feldman et al., 4/15).

The Kaiser Family Foundation: Impact Of The Medicaid Expansion For Low-Income Communities Of Color Across States –Some states are wrestling with the question of whether to expand their Medicaid programs under the provisions of the federal health law. "While the Medicaid expansion will increase coverage options for all low-income Americans, it will disproportionately impact low-income people of color," the authors of this brief write. "Overall, people of color are more likely than whites to be uninsured and low-income, since they are more likely to work in low-wage jobs that do not offer employer-sponsored insurance and often have difficulty affording coverage when it is offered." This brief provides data on the uninsured by race and ethnicity across states based on analysis of the 2011 American Community Survey (Artiga and Stephens, 4/16).

The American Enterprise Institute/Robert Wood Johnson Foundation: Preserving The Future of Medicare: Three New Papers -- These research papers, released together, examine some of the key issues currently surround Medicare and its role in the federal budget. "The authors explain why reform matters, how to properly implement premium support, how to fix traditional Medicare, and how to structure a system of competitive bidding," AEI and RWJF said in announcing the publication of the papers. They include:

--The Role Of Medicare Fee-for-Service In Inefficient Health Care Delivery
This report looks at the fee-for-service system within Medicare, which comprises the third largest category of federal spending, and its effects on health care across the country and its cost. "At the heart of the crisis is rapid growth of entitlement spending driven by health care cost inflation. And at the heart of the health cost problem is Medicare. Put simply, America cannot solve its budget problems without slowing the pace of rising costs, and it cannot slow the pace of rising health costs without fundamental Medicare reform. ... In the end, real change will almost certainly require a more fundamental reform than has been enacted to date, such as using market forces to encourage the kind of far-reaching changes in how services are delivered to Medicare patients that are needed to bring costs under control," the author concludes (Capretta, 4/16).

--Plan Competition And Consumer Choice In Medicare: The Case For Premium Support
This brief reviews the difficulties Congress has had in reducing costs in the program and examines the plan by Republicans to offer premium supports to Medicare beneficiaries. "There is broad agreement," the author writes, "that our future depends on slowing the growth of Medicare spending while ensuring seniors’ access to appropriate care. Premium support is the core of a marketbased reform of Medicare financing. By shifting from defined benefits to defined contributions, premium support dramatically alters the economic incentives that drive program spending rather than program value, and it makes consumers an active part of the solution. The political and technical challenges of instituting marketbased reforms cannot be overstated, but the alternative approach of centralized decision making and cost control is less appealing" (Antos, 4/16).

--A Competitive Bidding Approach To Medicare Reform
This paper looks at the proposals to use competitive bidding among insurance plans to provide Medicare coverage, its potential to save money and improve the program and the challenges to such a system. "The most promising option for addressing Medicare reform is competitive bidding—using health plans’ bids to determine the government’s contribution to a basic set of benefits in every market area" (Feldman, Dowd and Coulam, 4/16).

Here is a selection of news coverage of other recent research:

Reuters: Hospital Program Improves Antibiotic Prescribing
A quality improvement program at a single children's hospital succeeded in cutting back inappropriate antibiotic prescribing, in a new study. Researchers found within six months of introducing new electronic and educational tools, doctors were meeting national guidelines for treatment of childhood pneumonia in 100 percent of patients (Grens, 4/17).

MinnPost: Pharmaceutical Reps Rarely Tell Doctors About Drugs' Potential Harms, Study Finds
U.S., French and Canadian doctors receive little or no safety information about drugs when visited in their offices by pharmaceutical sales reps for the drugs, a new study has found. That failure to include information on harm occurred even though the United States, France and Canada all have national laws that require drug sales reps to discuss safety information about their products with doctors (Perry, 4/12).

Reuters: People, Networks May Sway Parents' Vaccine Choices
The people and information sources parents surround themselves with may influence their choice to vaccinate their children or not, according to a survey from one county in Washington state. Of almost 200 parents who took the survey, almost all said they had groups of people offering advice on vaccination, but those who chose not to fully vaccinate their children were more likely to have larger social groups and to turn to other sources, such as books, pamphlets and the Internet, for guidance (Seaman, 4/15).