Not-for-profit hospitals targeted — again

At the Capitol this week, time is at a premium, as the Legislature races to meet a Friday deadline for passing bills out of the house of origin. Given that workload, and the long list of good ideas that need attention, it is perplexing to note that a failed bill from 2013 has been recycled and is receiving new consideration; a bill that poses the threat of genuine harm to the health needs of our communities in a time of important health care reform.

Assembly Bill (AB) 503 is proof that bad ideas too often don’t fade away, even when they lack merit and a weak record of support.  The measure is virtually a carbon copy of 2013’s AB 975, which was solidly defeated in the Assembly by a vote of 28-38.  The new version would impose a costly scheme to redefine community benefit standards at California’s not-for-profit hospitals, limiting consumer access to special health care services through neighborhood programs. In addition, it would impose a one-size-fits-all mandate on the types of community benefit programs carried out by the state’s non-profit hospitals.

New ambiguous rules at this point would only threaten the goal of broader and more comprehensive health coverage for all of our residents.

Currently, non-profit hospitals work with local stakeholders, such as public health departments, senior groups and non-profit agencies, to tailor community benefit plans to meet the specific health needs of their area.  In agricultural areas, there could be emphasis on mobile services to meet health care needs of farm laborers.  In a community with a high number of retirees, it could mean programs that focus on geriatric care.  Community benefit programs now fund a wide range of services, including trauma centers, burn units, neonatal care, diabetes and cholesterol screening, dental clinics for children, adult day care, and more.  These programs are provided regardless of a patient’s ability to pay.

AB 503 would cripple many of these common-sense programs directed at meeting local health care needs by imposing new Sacramento mandates.  90 percent of a non-profit hospital’s community benefit spending would be re-directed to charity and prescribed community health programs. This will result in dramatic cuts or outright elimination of current community benefit investments that don’t fit into a narrow formula.  Translation: our communities lose, in a big way, the ability to participate in programs and services that meet their specific needs.

Proponents claim, falsely, that AB 503 is needed in order to provide transparency.  In fact, by state law, all non-profit hospitals are required to conduct community health needs assessments and develop community benefit plans with the input of local stakeholder groups.  These plans are submitted each year to the California Office of State Health Planning and Development (OSHPD) and are available for review online. Current law also requires hospitals to report on measurable objectives within specified timeframes, providing for a genuine sense of accountability. Just like its predecessor, AB 503 is a solution in search of a problem that doesn’t exist.  It not only poses a threat to programs that are already effectively serving their communities, its vague and costly standards carry a burden that would adversely impact successful implementation of the federal Affordable Care Act.  In fact, the ACA’s community benefit provisions were modeled after California’s current community benefit laws.  New ambiguous rules at this point would only threaten the goal of broader and more comprehensive health coverage for all of our residents.

California’s hospitals are committed to serving their communities.   AB 503 represents a pointless hurdle to these goals.  There is no point to reviving a debate that was overwhelmingly rejected by lawmakers last year. This bill should follow its earlier twin, AB 975, to the legislative graveyard.

Ed’s Note:  C. Duane Dauner is President and Chief Executive Officer of the California Hospital Association


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