Meeting Unmet Needs: An Expanded View of Community Benefits

Whenever comparisons are made between health care spending in the United States and other western countries, U.S. expenditures are for being multiples of those observed in Europe and elsewhere. Those international differentials narrow considerably, however, when the combination of health care, public health, and social services spending is considered. Other developed countries have long spent considerably more on public health and social services, while the United States has a much higher proportion of that combined spending coming in the form of health care expenditures. In the aggregate, the total amounts spent are much more alike than the health care figures alone would suggest. The international difference in the allocation of overall spending has occurred at least in large part because the U.S. system has adopted the market as its mechanism to govern the distribution and pricing of health care services. As a result, investments have gravitated to competition for a growing pool of health care dollars rather than a purposeful redirection of resources into public health or social services, neither of which has a market to attract attention and capital.  

Public health, virtually by definition, is what economists call a common good. Society wants everyone to benefit, but not everyone can or would participate voluntarily in paying for them, so these goods and services are typically funded through taxation. Much the same can be said of social services. Other countries were quicker to recognize this, and deliberately diverted resources to provide those common goods, leaving less available for health care services, which in turn precipitated more regulation of what has been left to the market in the U.S. The addressed by public health and social services funding in other countries are not absent in the United States; if anything, given the geographic and economic diversity here, those needs may actually be even greater. Dealing with the medical manifestations of unmet public health and social services needs has fallen to health care providers here.  Consequently, there is a growing imperative for health care providers to take steps to mitigate the most pressing of the socioeconomic problems before their medical manifestations become overwhelming.

There have been a number of promising signals in Washington about support for wellness initiatives and preventive services, but it remains to be seen how that support is ultimately squared with  contemplated cuts to or the and Prevention (which would adversely impact local public health departments), either of which would portend an even bigger wave of unfunded demand—medical, public health, and social. Standing squarely, and all but alone, in the path of this unmet need are health care providers.

A consequence of American underinvestment in public health and social services is the prevalence of disparities in health care outcomes, with life expectancy varying by among residents in different neighborhoods in Chicago, Washington D.C., and New York.  Despite the highest per capita health care spending among OECD countries, the United States consistently experiences across several key measures, including life expectancy, infant mortality, preventable mortality, and a higher incidence of chronic conditions. Community Health Needs Assessments (CHNAs) routinely find a (hospital beds, physician practices, ambulatory facilities, diagnostic testing) in more affluent communities with high levels of commercial insurance and much lower (if any) supply in less affluent areas with high proportions of Medicaid beneficiaries or uninsured individuals. The disparate resources mean vulnerable populations have lower per capita utilization of diagnostic testing, inconsistent prenatal care, and limited access to specialists, and vulnerable populations disproportionately access the health care system through hospital emergency rooms. These persistent access disparities have profound negative effects, including later discovery of cancers, more low birth weight deliveries, and higher neonatal complications for people of lower socioeconomic status. The concentration of supply in affluent geographies and the undersupply in economically vulnerable service areas is a direct result of trusting the market to govern distribution and pricing while underinvesting in the “public good.”

The socioeconomic ramifications of these disparities in health outcomes and wellbeing are far-reaching, extending into workplace productivity, household financial stability, and quality of life—for not just patients but for family caregivers as well. The costs associated with the medical manifestations of the disparities inevitably come back to providers, in the form of avoidable utilization of scarce resources (like emergency departments and high-acuity hospital beds) at reimbursement rates that fall far short of covering expenses. Health systems are increasingly realizing that investments in meeting previously unmet needs in traditionally underserved segments of the population—not just medical needs but public health and socioeconomic needs—can pay significant dividends not measured in traditional return on investment but by losing less money. By stemming the growing wave of unprofitable demand arising from unfunded public health and social services, health systems can reduce their financial deficits on that segment of their businesses. A dollar not lost is as valuable as a dollar earned, and the outcomes for the patients are improved.

It can be debated whether or not health systems should be expected to extend community wellbeing investments beyond direct medical care, but what is not up for debate is the reality that no one else is stepping into that vacuum. Health systems cannot solve socioeconomic problems alone, but they can serve as conveners, providing the managerial infrastructure needed to lead and coordinate grass roots collaboratives. Partnerships between health systems and social services organizations, exemplified in the emergence of “Blue Zones”, commonly involving substantial financial investments by hospitals, are an effective way to leverage resources. Across the country, health systems are investing hundreds of millions of dollars to address socioeconomic drivers of health and wellbeing—including housing, food insecurity, employment, education, transportation, neighborhood safety, and general economic development. Specific initiatives are too numerous to cite inclusively, but examples are plentiful from coast to coast:

• Kaiser Permanente’s Thriving Communities Fund created or preserved over 15,000 affordable housing units in high-cost areas of northern California.
• Boston Medical Center’s Housing Prescriptions program provided direct support to families at risk for eviction and funded new affordable housing developments.
• Geisinger Health System in Pennsylvania created a “Fresh Food Farmacy” targeting patients with type 2 diabetes and food insecurity, providing weekly groceries and nutritional counseling.
• Intermountain Health in Utah partners with community colleges and training programs to connect patients and family members with employment opportunities.
• UMass Memorial Health in Worcester, Massachusetts allocates 1% of its investment portfolio, redirecting funds from stocks and bonds to investments in low-income housing, subsidized commercial development, and loans to social services organizations.
• Children’s Hospital of Philadelphia and Cincinnati Children’s Hospital are each partnering with local schools and investing in early childhood education, efforts to reduce absenteeism, and school-based mental health services.

America’s underinvestment in public health and social services relative to its global peers is not a new phenomenon, but the medical manifestations of the resulting unmet needs have become an existential threat to many health care providers. During the Covid pandemic, hospitals and health systems discovered how fragile their underlying economics are—and how susceptible they are to being completely overwhelmed by a public health calamity. With no one else stepping into the socioeconomic void, it has fallen to health systems to invest in community resources that have the potential to dampen what will otherwise be overwhelming low acuity demand. As more health systems invest in services and service areas that do not attract resources or attention in a market-based strategy, but which meet unmet needs in populations that could otherwise overwhelm their capacity, there should be opportunities to recognize those investments as a critical component of their community benefits for tax exemption.