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Community Health Needs Assessments - Pitfalls to Avoid

March 12, 2013:

A version of this article was published by The Nonprofit Quarterly and may be accessed by clicking the following link:

Avoiding Misconceptions in Filing Community Health Needs Assessments – March 12, 2013

[Community Health Needs Assessments (CHNAs) are part of the Patient Protection and Affordable Care Act (PPACA, or ACA) passed in 2009 and referred to as "health care reform" by some and as "Obamacare" by others. In June, 2012, the US Supreme Court decided in favor of upholding the ACA (albeit without the penalties for states choosing not to participate in the expansion of Medicaid benefits). As a result, the CHNA provision of the law is highly likely to continue in law and regulation. Republican efforts to repeal or change the ACA are focusing on parts of the law unrelated to CHNAs.]

 


UPDATED SEPTEMBER 18, 2012


CHNAs were included in the ACA because there is concern that those hospitals which benefit from tax-exempt recognition by the IRS (nonprofit hospitals) may not be paying sufficient attention to the "public benefit purpose" which lies at the heart of the justification for tax-exempt treatment.   

Congress wanted a way to assess whether tax-exempt hospitals are fulfilling their responsibilities as nonprofit organizations as well as being health care facilities. The US Department of Health and Human Services (HHS) oversees hospitals and, in that role, implements a variety of assessment and compliance requirements of hospitals and health care facilities, including nonprofit hospitals. On the other hand, the IRS is responsible for oversight of nonprofit organizations. Therefore, it makes sense that the CHNA requirement is tied to the IRS and the Form 990 informational return filed by nonprofit organizations. CHNAs are designed to document public benefit purpose; more specifically, the responsiveness of nonprofit hospitals to community needs.

We are concerned that the legislative intent of the CHNA assessment process is being ignored by some and misinterpreted by others, with the result being negative for hospitals and their communities. The IRS, responsible for monitoring compliance, has signaled their strong interest in evaluating assessments based on Congress’s legislative intent. So, ignoring or misconstruing the intended purpose and uses of the assessment may have enforcement implications as well as implications for the management, delivery, and governance of health care in communities across the country.

Sumption & Wyland has been following the developing practices surrounding community health needs assessments since 2009, when we performed an assessment for a Sioux Falls hospital. Since then, we have developed a process for assisting nonprofit hospitals with their CHNAs. We are currently pilot-testing this CHNA process with two rural hospitals, and we anticipate working with several more hospitals on their assessments later in 2012 and into 2013.

We believe that there are four distinct mistaken beliefs that hospital leaders, and those who seek to help them comply with the CHNA requirement, are making:
 
Statistical data is sufficient. 
The promotion of the belief that CHNAs are a data-driven reporting exercise. Access to the right statistical data compiled from third-party sources is the key to success;
 
A CHNA is a marketing exercise.
CHNAs are sometimes portrayed as a hospital’s marketing exercise, similar to a community benefit survey, where the hospital’s job is to "educate" the community using the CHNA process;
 
CHNAs are a structure for public health sector alignment.
Some are portraying the CHNA process as a way for public health officials and organizations to change the focus of nonprofit hospital service delivery to more closely reflect established public health priorities; and
 
CHNAs aren’t really that different or that important.
Some are misrepresenting the CHNA process and, incidentally, minimizing the need for outside assistance by hospitals in formulating assessments and developing action plans.
 
The mistakes have one common thread; namely, that they discourage or discount the soliciting of opinions, attitudes, and perceptions from community members being served by the hospital doing the CHNA.

Let's address these four mistakes:
 
1.  Statistical data is sufficient.
 
It’s not surprising that hospitals are focusing on the data aspects of the CHNA requirement. After all, relatively few hospitals track external health care data on a regular basis; they tend to rely on internal utilization data and anecdotal reporting on external trends in their planning. They are unlikely to employ statistical analysts in their administrative offices, and they are unlikely to even know where to start when asked to consult external data.

There are several groups and organizations that are developing, or have developed, web-based or workstation-based access to various statistical data bases. US Census data, CDC data, state health department data, and other data are now available online either free or for a fee. These data may be downloaded and analyzed, with some providers even making sophisticated geographic information systems (GIS) mapping software available over the Internet.

Providing access to statistical data definitely makes the CHNA research process easier. However, it’s not a substitute for the process itself. I spoke with a hospital CEO recently who assured me that he "had the CHNA covered" because his state was developing an Internet-based tool for statistical data reporting. He didn’t realize that the statistical data collection is part of the preparation, not the assessment itself.

Statistical data doesn’t involve asking real people what they think about and what they want, and it doesn’t do a lot when formulating an action plan to address community health needs. Both of these non-statistical activities are essential to CHNA success.
 
2. A CHNA is a marketing exercise.
 
All too often, the word "marketing" is misused as a synonym for "sales" or "advertising." We believe the CHNA is a *real* marketing opportunity, while others portray it as an opportunity to sell the hospital, its services, and health issues in general.

There is an organization traveling the country, doing one-day seminars for health care leaders and others on using data for various purposes, including CHNAs. As part of the day-long workshop, they present a two-hour session on performing a community health needs assessment.

Their process is long on statistical data (see above) and data collection from health care experts. The only involvement with the local community is two "community meetings" where the agenda is heavily weighted with presentations from the hospital CEO about all the wonderful things the hospital does. At the end of the meeting, a survey is presented to attendees asking them what they think about what the hospital does.

There are at least two problems with this. First, the "community meetings" are designed in such a way as to influence the survey results, generally to the benefit of the hospital. Second, the meetings are designed as talking opportunities rather than listening opportunities. At the training session I attended, I turned to another attendee and said, "it sounds like the old joke about the egotistical person at the party - ‘That’s enough of me talking about myself. Now, what do you think of me?’"

The process the training organization promotes even includes the recommendation that the marketing VP or equivalent hospital administrator serve as the point person on the steering committee for the CHNA. Other recommended members include health experts outside the hospital, especially public health officials.

There’s nothing wrong with a hospital using the data from its CHNA to improve its marketing efforts. In fact, we believe that one of the key findings in many communities will be that many community members are unaware of the breadth and depth of services provided by their nonprofit hospital. Understanding this finding will provide hospitals (and the communities they serve) with opportunities to increase utilization, and perhaps even revenue.

The problem is that, in order to learn what someone thinks and why they act the way they do, it’s usually necessary to ask them. Observation from a distance gets one only so far in assessing community perceptions. Hospitals need to have the courage to ask the questions, even if the answers are uncomfortable.

3. CHNAs are a structure for public health sector alignment.
 
There is a phrase in the Affordable Care Act that states that CHNAs "take[s] into account input from persons who represent the broad interests of the community served by the hospital facility, including those with special knowledge of or expertise in public health..."

This has opened a door which public health professionals and advocates are using to attempt to influence the CHNA process toward established public health goals and initiatives. The CHNA requirement is seen by some as the method by which nonprofit hospitals become instrumentalities of the public health agenda. The CDC is advocating that hospitals use a service area description that explicitly includes medically underserved areas that would not necessarily be evident when looking at a hospital’s utilization data.

CDC officials have been quoted as expressing strong interest in partnering with the IRS as it writes the regulations for evaluating the CHNA reports which must accompany Schedule H of the IRS Form 990 filing for each nonprofit hospital.

CDC officials also have well-defined ideas of what should be included in a nonprofit hospital’s CHNA action plan. For example, one CDC staffer on a webinar conference call indicated that all CHNAs should include a priority on smoking & tobacco use cessation activities.

Smoking & tobacco use cessation activities are a laudable goal in the abstract, but is it realistic to expect all communities to identify it at or near the top of their list of priorities? Is it appropriate for all nonprofit hospitals to devote resources to this activity, regardless of other community-based initiatives and regardless of other pressing health concerns in the community?

When pressed, CDC officials recognize that communities, and the hospitals that serve those communities, may identify issues not on the CDC’s list. They also realize that there may be valid reasons why initiatives or issues that appear valid at first may be impractical owing to geographic, regulatory, or other reasons outside the control of the hospital or even its potential partners.

The fact remains that the CHNA requirement was not instituted to gauge or encourage a hospital’s pursuit of a public health mission. It was instituted to gauge a community’s needs and how the nonprofit hospital serving that community chooses to respond to those needs. This does not mean that a hospital shouldn’t care for the poor, medically underserved, or otherwise vulnerable populations in their communities. The hospital has the responsibility to be responsive to the whole community.
 
4. CHNAs aren’t really that different or that important.
 
The "Community Health Assessment Toolkit" assembled by the Association for Community Health Improvement (ACHI), Community Connections, and the American Hospital Association (AHA) is a framework for conducting a CHNA to comply with the requirements of the ACA and the likely regulations yet to be issued by the IRS.

In 2011, ACHI estimated that conducting a CHNA would cost a nonprofit hospital between $60,000 and $140,000. On the other hand, there are those who believe – and are telling nonprofit hospital administrators, public health officials, and others – that a CHNA can be performed for $10,000 or less.

Why do the estimates vary so widely?

We believe that the ACHI/Community Connections/AHA process is comprehensive and envisions extensive assistance from outside consultants. Most hospitals, and especially smaller, more rural, independent hospitals, do not have the staff time or expertise to engage in a comprehensive CHNA process once every three years while conducting routine business.

However, if a hospital buys into the statistics-driven process without substantive community input that other groups outline, then it’s possible to deliver a product of some sort that might be called a CHNA for a lower price.

There are four problems with a hospital short-changing itself in this way:

  • First, the hospital may, or may not, find itself in substantial compliance with the IRS regulations governing CHNAs.
  • Second, the hospital shortchanges itself of the opportunity to discover, in the Peter Drucker phrase, "what the customer considers value," which is the central issue of the CHNA.
  • Third, a CHNA performed to the ACHI/Community Connections/AHA standard is a powerful document that can inform not only marketing and program services, but also organizational strategic planning. A minimalist approach to the CHNA process invites the hospital to miss a lot of potentially valuable information that can be used in several productive ways.
  • Fourth, a comprehensive process that engages the community at large as well as potential partners and other community experts increases the visibility and leadership profile of the hospital.


Conclusion

Yes, we’re consultants. We provide assistance with CHNAs. Our viewpoint can be attacked as biased in our own interest. We understand and accept that. There are those who do not understand, as we do, that the best businesses are those that serve their clients’ interests best.

We believe that the ACHI/Community Connections/AHA CHNA model is a good one, but that the price point estimates are too high. That’s why we’re pilot-testing two sites in 2012 – to be sure we can deliver the right service without undercharging for the service.

We also believe that many, if not most, hospitals are still not preparing themselves for their first CHNA. We anticipate that many hospitals will rush to complete something - anything - resembling a CHNA to meet the first deadline (for most hospitals, sometime in 2013, depending on their fiscal/tax year). Hospitals rushing to meet a looming deadline are at risk of falling into the traps identified here - statistical reports, with little or no substantive community input, which provide little or no value beyond bare tax compliance, and which may move the hospital away from its core competencies and stated mission to fulfill external agencies’ stated priorities. We’d rather see the CHNA provisions of the ACA implemented as intended, in such a way as to provide benefit to the community and the hospital that serves the community.

Click here for more information on Community Health Needs Assessments