2019 Community Benefit Report

January 8, 2019

VHHA takes pride in annually publishing the Community Benefit report. This publication is an important opportunity to highlight the substantial community contributions, public health and safety investments, and economic impact Virginia’s local hospitals and health systems make each day. These contributions include provision of essential health services to support community well-being, extensive free and discounted care to patients without insurance, and many other programs that support health care access, critical and often under-funded health services, and promote quality of life in Virginia.

These community benefit investments include free care and financial assistance to needy people, Medicaid program losses, subsidized health services such as trauma care, behavioral health, and community programs that improve the health of people in communities across Virginia. Community benefit, as defined by the IRS, totaled $1.6 billion in 2017. With other forms of community support, including Medicare losses, taxes paid, and bad debt expenses absorbed by Virginia hospitals, the total benefit to Virginia communities in 2017 exceeded $3.29 billion.

Local hospitals and health systems are economic cornerstones in their communities. They directly provide more than 125,000 good-paying jobs with payroll and benefits exceeding $8.5 billion, and contribute roughly $40 billion in economic activity, according to 2016 data. Hospitals also face financial challenges associated with uncompensated care. Data from Virginia Health Information (VHI) show that from 2008-2016, the annual rate of Virginia acute care hospitals with negative operating margins has ranged from 20 percent to 38 percent. Among rural acute care hospitals, the range is 40 percent to 63 percent. Two rural Virginia hospitals have closed since 2013. In 2018, under the leadership of Governor Ralph S. Northam and other state elected officials, Virginia took an important step to help improve patient access to care and alleviate the strain of uncompensated care on hospitals and other providers by approving a compromise budget to expand Medicaid eligibility under the Affordable Care Act to as many as 400,000 low-income, uninsured Virginians.

Medicaid coverage expansion in Virginia, made possible through financial support from hospitals to offset state costs, will likely result in a reduction in the uninsured rate in Virginia (12 percent in 2017, according to Kaiser Family Foundation research) and a decline in uncompensated care. Such decreases have been experienced in other expansion states. Yet there will still be thousands of uninsured Virginians. Access to care will remain a challenge for many, and providers will continue to grapple with uncompensated care costs and their impact on the health care delivery systems. In this environment, Virginia hospitals remain committed to serving all patients while working to improve the safety and quality of care provided. This commitment is reflected in some of the recent accolades earned by Virginia hospitals. For example, Virginia was named among the top three states for patient safety in the Fall 2018 Hospital Safety Grade scores from the Leapfrog Group, a national health care patient safety ranking organization. Additionally, VHHA earned the “2018 HRET HIIN Quality Award” presented by the American Hospital Association (AHA) and the Health Research & Education Trust (HRET). This award recognizes a state hospital association for demonstrating exemplary dedication and leadership in advancing the quality and safety of health care for patients.

Health care and hospitals are critical to the health, growth, economic vitality, and prosperity of Virginia. Our elected officials are focused on critically-important efforts to enhance access to physical and mental health care, combat substance abuse, improve population health, help patients in underserved areas, and much more to keep Virginia thriving. As we move ahead, Virginia hospitals and health systems will continue to strive for excellence in health care service, safety, value, and access in support of patients and the Commonwealth of Virginia. We look forward to working with our elected leaders, community partners, and other constituents to advance Virginia as a model for this important work.

Read the full report here.