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» A magazine for and about Oregon Community Hospitals.
Public trust and confidence are critical to sustaining success,
building a broad and cohesive base of hospital advocates, and
ensuring widespread support for the hospital’s important
mission and vision. Producing a community benefit report is
a critical component of this process and provides hospitals an
opportunity to clearly demonstrate the benefit and value they
provide to their local communities.
Too often, boards of trustees assume that public awareness,
trust and confidence are not an issue unless they hear
otherwise. This can be a dangerous assumption, and ignores
the fact that issues of community confidence and trust often
bubble below the surface, and may not be apparent to board
members in the course of their engagement with the people
they work with and know in the community.
It is no secret that hospitals and their boards of trustees
are under a large microscope of scrutiny today. They have
been challenged by plaintiffs’ attorneys in federal and state
class-action lawsuits for allegedly overbilling the uninsured,
employing heavy-handed collection practices and failing to
live up to their tax-exempt status.
Hospitals have also been in the crosshairs of the Internal
Revenue Service and the U.S. Senate Finance Committee
for their executive compensation practices and community
benefit reporting, and hospitals are unfairly blamed by
businesses and payers for being the primary culprits behind
dramatically rising health care costs.
What do governing boards do, and how do they do it?
The IRS has become increasingly interested in a broad scope
of not-for-profit tax-exempt hospital activities, including
governance.
Early in 2007 the IRS released voluntary guidelines on
“good governance” among tax-exempt organizations. Those
guidelines covered board responsibilities including mission,
ethics, due diligence, fiduciary responsibilities, transparency,
finance and compensation, among others. The heads-up
for boards is that the IRS is increasingly interested in who
governs hospitals, how they govern, and how the community
benefits.
IRS Form 990 and Schedule H
The Form 990 includes 15 specific schedules organizations
must complete, depending upon the types of activities
they engage in. One of those is “Schedule H,” which must
be completed by all hospitals or other organizations that
provide medical care. The form also includes schedules
on executive compensation, related organizations, asset
transfers/termination of exempt entity, tax-exempt bonds
and governance.
Hospital trustees should be aware that the form also asks
for a variety of governance related information, including
information about board size; the number of independent
board members; trustee loans and compensation; trustee
family relationships with employees; business relationships
with other persons and organizations; governance service
with other organizations doing business with the hospital;
changes to governing documents; conflict of interest policies;
meeting documentation; financial audit; and transparency.
The perception problem
There is a significant pent-up consumer frustration about
health care driven by a lack of awareness and understanding
of the current system and its challenges, something that
an effective community benefit report and community
engagement effort can address. Most people do not
understand how hospitals are organized and managed, how
they work, what they do to provide charity care, or what
they do in their communities as a part of their mission to
provide community benefit and improve community health.
They do not understand the magnitude of the forces that are
changing health care, including payment inadequacies, the
negative impacts of overregulation, the dramatic increase in
“disruptive technologies,” changes in the workforce and more.
In the absence of information and evidence, people rely on
personal experiences, their own intuitive beliefs and personal
opinions to shape and sustain their belief structure about
what’s good and bad about health care. And it is extremely
hard to impact peoples’ strongly-held beliefs and perceptions.
Hospital leaders have an opportunity to help shape positive
public perceptions about their hospital. They have an
obligation to communicate the unique challenges it faces,
how it’s dealing with those challenges in a very difficult
environment, and why the hospital relies on the commitment
and loyalty of its community to ensure its ability to continue
providing high quality health care services well into the
future.
Using connections to build benefit and understanding
Trustees are in a unique position as community
representatives and advocates work to ensure the hospital
has tight community connections. They should listen to
community needs and challenges, and build community
understanding and awareness about the issues and challenges
their hospital faces—challenges that the community likely
doesn’t fully understand or appreciate.
While it’s hard to impact strongly held beliefs and
perceptions, perception can be tipped with the correct
information and communication, delivered consistently and
TRUSTEE SPOTLIGHT:
WHAT HOSPITAL TRUSTEES CAN LEARN FROM THEIR COMMUNITY BENEFIT REPORT
SPECIAL SECTION: A COMMITMENT TO COMMUNITY: TRUSTEE SPOTLIGHT