Measuring Community Benefit

The purpose of a non-profit healthcare organization is to benefit the community. This was the reason Cedars-Sinai was established 116 years ago, and it continues to be our purpose today.

To meet their intended purpose, non-profit organizations are expected to offer services that benefit the community and society, and to be accountable to the community through the organization’s governing body. Because a non-profit organization is exempt from paying most taxes, it has an important responsibility to continually demonstrate that it is providing appropriate community benefit.

This raises the question: How to measure the community benefit of a non-profit health system or hospital? 

Before government programs like Medicaid (called Medi-Cal in California) and Medicare, it was simpler. Among other ways, community benefit could be measured by the amount of money a hospital provided for charity care (free health services for people who were unable to afford their care). In the 1960s, when the government began to provide some reimbursement to care for low-income and elderly patients under Medicaid and Medicare, the other aspects of community benefit were recognized. These included a hospital’s financial contribution for the unreimbursed costs of caring for patients in these government programs, the hospital’s free programs to promote health and wellness in the community, grants from the hospital to local health- and wellness-related community organizations, and the unreimbursed costs of medical research and medical education.

This definition recognizes that a hospital’s community benefit is much more than providing free charity care, that each community across America has its own distinct set of needs and, by virtue of their mission, each hospital has different ways to benefit the community and society. It includes such additional aspects as strengthening underserved communities by partnering with local organizations, and other efforts focused on reducing health disparities. And it recognizes that government programs such as Medi-Cal and Medicare do not fully cover the cost of caring for these patients. This latter item is significant at Cedars-Sinai, which is one of the largest providers of Medi-Cal services among non-government hospitals and serves substantially more Medicare patients — many of whom are low-income individuals also on Medi-Cal — than any other hospital in the state.

In FY2017, Cedars-Sinai contributed $672.5 million in community benefit, including charity care and uncompensated care for the uninsured, the unreimbursed cost of caring for Medi-Cal and Medicare patients, community benefit programs, grants to local community organizations and the unreimbursed costs of research and medical education.

While our community benefit contribution can be measured in dollars, I believe that the most meaningful way to describe it is in the thousands of stories of individuals whose lives have been improved as a result of Cedars-Sinai’s community benefit programs. Whether they received free or subsidized health care, participated in one of our health and wellness education programs offered throughout the community, were part of a community health organization that received a grant from Cedars-Sinai, benefitted from a research discovery made here, or were cared for by one of the thousands of physicians, nurses and other health professionals educated at Cedars-Sinai, it is each of these individuals who best illustrate how we benefit the community and, most importantly, why we are committed to community benefit.