BOTH NONPROFIT HEALTH CARE PROVIDERS AND HEALTH PLANS
The Value of Nonprofit Health Care
This Alliance report briefly describes the history and size of the nonprofit health care sector, its role and
differentiation from the governmental and for-profit health care sectors, its relative performance along various
dimensions according to the research literature, and challenges looking ahead.
Great Governance: A Practical Guide for Busy Board Leaders and Executives of Nonprofit Health Care Organizations
This fourteen-page Guide, approved by the Alliance Board in August 2011, is intended to answer the
question: Among all of the 50 to 100 best practices permeating the literature, which will make the
most difference in achieving great governance?
It includes two appendices: one providing a list of
resources for additional information and guidance to accomplish the key steps recommended under the
seven great-governance benchmarks contained in the Guide, and the other providing two checklists
derived from the key steps.
Advisors in the developing the Guide were: F. Kenneth Ackerman, Jr., Howard J. Berman, Douglas Brown,
Richard Chait, John R. Combes, M.D., Sean Murphy, James E. Orlikoff, Lawrence Prybil, PH.D., James
Rice, Ph.D., and Michael Roberto. Bruce McPherson, Alliance President, served as facilitator in the
Maximizing Community Benefit: A Six-Point Program
This position paper, approved by the Alliance Board in April 2009, calls on all nonprofit health care
organizations to adopt as quickly as possible, if they haven't already, six specific community benefit
practices to maximize their community benefit.
A Key to Health Care Reform: An Organized Health Care Coalition in Every Community
This 2011 Alliance position paper calls on every nonprofit health care organizations to help establish,
where it doesn’t already exist, and actively participate in, an organized coalition in its community
consisting of representatives of all key stakeholders to improve the effectiveness of care provided to
low-income and uninsured patients and to reduce the incidence of chronic illness for all population groups.
Nonprofit Health Care Market Concentration in the Public Interest
This Alliance report presents the proceedings of an April 18, 2011 roundtable discussion on this issue
co-sponsored with the health care journal Inquiry. The panelists for this discussion were: Howard Berman,
retired President and CEO, The Lifetime Healthcare Companies, Inc, Rochester, NY and Alliance Board Chair;
Arthur (Art) Lerner, Partner, Crowell & Mooring LLP, Washington, DC; Patrick Madden, retired President & CEO,
Sacred Heart Health System, Pensacola, FL (now residing in Nashville, TN); and Lawrence (Larry) Van Horn,
Associate Professor, Health Care Management and Executive Director, Health Affairs, Owen Graduate School
of Management, Vanderbilt University, Nashville, Tennessee. Bruce McPherson, Alliance President, moderated
Nonprofit Health Care and Universal Health Care Coverage
This Alliance report presents the proceedings of an October 1, 2007 roundtable discussion co-sponsored with
the health care journal Inquiry
on the role of nonprofit health care organizations in
promoting, and operating under, universal health care coverage. The panelists for this discussion were:
Terry Andrus, President and CEO of the East Alabama Medical Center, Opelika, Alabama; William Cox, President
and CEO of the Alliance of Catholic Health Care, Sacramento, California; Bradford Gray, Ph.D., Principal
Research Associate of the Urban Institute, Washington, DC and Editor of the Milbank Quarterly; Cleve
Killingsworth, President and CEO of Blue Cross Blue Shield of Massachusetts, Boston, Massachusetts; and Paula
Steiner, Senior Vice President of Marketing and Sales for Blue Cross Blue Shield of Illinois, Chicago,
Illinois. Bruce McPherson, President and CEO of the Alliance, moderated the discussion.
Ownership Status of the Health Care Organizations Involved in the Largest Fraud Judgments and Settlements
This list, published by the Taxpayers Against Fraud Education Foundation in June 2011, indicates that, of the 29
largest health care fraud settlements under the False Claims Act since 1986, only one involved a nonprofit health
care organization and only one a public entity. The remaining 27 were all for-profit companies.
Nonprofit Health Care: Making a Distinctive Contribution
This four-page paper by the Alliance of Catholic Health Care, updated in June 2008, briefly describes the roots
of the nonprofit sector in America, its essential character, its role in health care, changing structures within
a constant mission, and sustaining the mission.
Nonprofit Health Care Organizations and the Public Trust
This five-page Alliance report, a reprint of an article appearing in the Fall 2006 issue of the journal Inquiry
presents a roundtable discussion on the importance of public trust and its dimensions for nonprofit health care
organizations, how they have been performing in this regard, whether there should be a higher or different standard
for them, and what as individual organizations they can do, and should avoid doing, to improve their trustworthiness.
The panelists for this discussion were: William Foley, President and CEO of Provena Health based in Mokena, IL; David
Klein, President and CEO of Lifetime Healthcare Companies headquartered in Rochester, NY; and Mark Schlesinger,
Professor of Public Health and Fellow at the Institute for Social and Policy Studies at Yale University in New Haven,
CN. Bruce McPherson, Alliance President, moderated the discussion.
If Nonprofit Doesn't Mean "No Profit," How Much is Enough in Health Care?
This is a reprint of an article in the Fall 2005 issue of the journal Inquiry
. It is the second of a new feature
called Dialogue, which is a collaboration with the Alliance for Advancing Nonprofit Health Care to conduct roundtable
discussions on current, major issues as they arise in the nonprofit health sector. The panelists for this discussion
were: Mark Bartlett, Executive Vice President and CFO, BlueCross BlueShield of Michigan; Detroit; Michael Delucia,
Ph.D., Senior Assistant Attorney General and Director of Charitable Trusts, New Hampshire Attorney General’s Office,
Concord, NH; Charles Goheen, CFO of the Fallon Community Health Plan, Worcester, MA; John O’Brien, President and CEO
of UMass Memorial Health Care, Inc., in Worcester; and Gerald Wedig, Ph.D., Professor and Researcher in Organization
Economics, Corporate Finance, and Governance in Health Care Organizations at the William E. Simon Graduate School of
Business Administration, University of Rochester, NY. Bruce McPherson, Alliance President, moderated the discussion.
"Do’s and Don’ts” in Nonprofit Health Care Executive Compensation Practices
This special briefing, entitled, “Regulation of Executive Compensation at Nonprofit Health Care Organizations: Coming
Changes?,” was prepared in November 2009 by David Bjork, Senior Vice President and Senior Advisor at Integrated
Healthcare Strategies under commission by the Alliance. He explores environmental forces and current executive
compensation practices that may result in increased public scrutiny and regulation of those practices, and recommends
the adoption of certain practices and the discontinuance or modification of others.
Not-For-Profit Advocate Calls for Managerial Rigor
This Q & A article appeared in the February 4 issue of Managed Care magazine. Howard Berman, Alliance Board Chair and
retired CEO of Lifetime Healthcare, the largest nonprofit health care organization in New York State, discusses the
value of nonprofit health care as well as the challenges and opportunities ahead for the boards and managers of these
Why Nonprofits Matter in American Medicine: A Policy Brief
This 36-page paper, co-authored by Mark Schlesinger, Ph.D. and Brad Gray, Ph.D. and distributed at a June 20, 2005 Aspen Institute Luncheon Seminar in Washington, DC, is an excellent synopsis of research findings on the value and performance of the nonprofit health sector. In the policy brief they address key criticisms of the sector and conclude that "none of the charges are sustainable in their conventional form...". They note, however, that nonprofit medical care faces some very real and important challenges:
- American's limited understanding of ownership and, consequently, limited capacity to select providers or plans on the basis of ownership form;
- Inadequate level of community involvement and public accountability for many nonprofit health care organizations;
- Poorly defined standards or expectations for forms of community benefits that go beyond care for the indigent; and
- Our current limited understanding of ways in which the behavior of for-profits and nonprofits interacts in local communities and, consequently, the most appropriate mix of ownership for each community.
published a web-exclusive article by these two authors on June 20, 2006 that draws upon this comprehensive search of the research literature.
Public Expectations of Nonprofit and For-Profit Ownership in American Medicine
From the November/December 2004 issue of Health Affairs
This article, by Mark Schlesinger, Brad Gray and Shannon Mitchell, summarizes findings of past surveys on public
expectations regarding nonprofit and for-profit ownership of nonprofit health care organizations, as well as summarizes
the results of their own telephone interview survey conducted in the summer of 2002 of 5,000 U.S. residents.
The following were some of the findings from their own survey: about one-third had little or no understanding of
ownership differences; most have a jaundiced view of all types of health plans and hospitals (except for fairness
of treatment, regardless of race), but especially of health plans and most pronounced regarding trustworthiness;
and yet, most believed that ownership does matter. Quality of care was viewed more positively in for-profits, more
so in health plans than hospitals, while nonprofits were judged more trustworthy by a wide margin on three of four
measures (discharging sick patients when insurance runs out, charging for services that patients don't really need,
and overcharging for health insurance). Nonprofit health plans were viewed as being more humane (treats you like a
number rather than as a person) by a wide margin, whereas most respondents expected both ownership types of
hospitals to treat patients humanely. Of the 40 percent who believed that ownership did matter in terms of humane
hospital treatment, however, most favored nonprofits.
For those surveyed who understood the ownership difference (could define it, had completed college or worked in
health care), they tended to see no differences in quality based on ownership but expected nonprofits to be more
trustworthy (most markedly with respect to lack of financially motivated discharges). Among both those who
understood and those who didn't understand the ownership difference, more than half felt that ownership did not
matter with respect to humane treatment, although the minority perceiving an ownership difference in this area
NONPROFIT HEALTH CARE PROVIDERS
Study Finds Best Hospitals Are Typically Nonprofit and Worst Are Typically For-Profit
This October 6, 2011 Health Affairs press release is about an article reporting these and other findings in a
study by lead author Ashish Jha from the Harvard School of Public Health and colleagues, who examined the
nation’s 122 “best” hospitals (lowest costs and highest quality) and the nation’s 178 “worst” hospitals.
Nonprofit Health Systems Score Higher in Quality and Patient Safety
This August 2010 study from Thomson Reuters found that nonprofit Catholic and other church-owned health systems were more likely to provide higher quality to their communities,with investor-owned systems demonstrating lower quality performance than all of the nonprofit systems.
Nonprofit Health Systems Score Higher in Quality and Patient Safety
This May 16, 2008 article in HFMA News reports on the results of a study that found that of the more than 70
health systems studied, representing more than 1,500 hospitals, the nonprofits scored 7 percent higher on
average on quality and patient satisfaction measures.
State Reports on Hospital Community Benefits
Twenty state hospital associations (including DC) annually report and post on their web sites summaries of their
member nonprofit hospitals’ community benefits, using definitions recommended by either the Catholic Health Association
(does not count bad debts and Medicare payment shortfalls as community benefits) or the American Hospital Association
(counts bad debts and Medicare shortfalls as community benefits). Some state associations also have published reports
on the economic benefits of hospitals to the communities they serve. In addition, fourteen states have mandated
community benefit reporting programs. Details on all of these reporting programs are available on the web site of
the Association for Community Health Improvement (ACHI) at www.communityhlth.org/communityhlth/resources/communitybenefit.html
Governance in High-Performing Community Health Systems: A Report on Trustee and CEO Views
This report, issued in 2009, presents findings of a study by researchers at the University of Iowa led by Lawrence Prybil, Ph.D., that focuses on three important areas of health care governance: board structure and composition; board practices and processes; and board culture. These three areas are often cited as areas of governance that governing boards need to focus on if they are to achieve a strong and effective governing board. The study recommendations stress the board's role in establishing community benefit policy, creating a community benefit committee, assessing community, adopting a formal community benefit plan, ensuring that reporting and accountability mechanisms are in place, and providing a thorough report on the organization's community benefits to its community.
Commentary on the Need for Health Care Provider Leaders to Face Facts Regarding Changes Needed to Address the Nation’s Federal Budget Deficit Dilemma
This commentary, entitled “Move Beyond Denial” and presenting the personal views of Howard Berman, Alliance Board Chair
and Bruce McPherson, Alliance President, appeared in the August 15, 2011 issue of Modern Healthcare.
Commentary on the Need for Health Care Leadership to Protect Safety-Net Providers
This commentary, entitled “Demonstrate Leadership, Help Safety Nets Now” and presenting the personal views of Howard Berman,
Alliance Board Chair and Bruce McPherson, Alliance President, appeared in the October 21 HealthLeaders newsletter.
Survey on Nursing Home Patient-Safety Culture Finds Nonprofits Better
This is a September 2011executive summary of a report prepared by the Agency for Healthcare Research and Quality presenting
the overall findings of its most recent survey (226 nursing homes and 16,155 nursing home staff responded) on their
organizations’ patient-safety culture. The nonprofits scored higher on all twelve culture composites and on other key questions.
Nonprofits Dominate 2011 List of Top Nursing Homes
In this February 2011 List of "Best Nursing Homes" published in U.S. News & World Report, the Alliance found that 78% were nonprofit, 17% public (state or county-owned) and only 5% for-profit, despite the fact that nationwide about 28% of nursing homes are nonprofift, 6% public and 66% for-profit.
Nonprofit Nursing Homes Provide Better Quality, Major Study Shows
This August 20, 2009 article reports on the results of a major new statistical review by Canadian researchers of 82 individual research studies collecting data between 1965 and 2003 on the quality of nursing homes in the U.S. The researchers found “unequivocally” that nonprofit nursing homes provide higher quality care than for-profit nursing homes.
GAO Report on the Methodology Used in CMS' Special Focus Facility Program
In this August 2009 report, the GAO concludes, using CMS' ranking methodology on nursing home quality, that the most poorly performing nursing homes tended to be chain-affiliated and for-profit.
For-Profit Hospices Less Likely to Enroll Cancer Patients
This February 1, 2011 article summarizes this finding from a research study report published in JAMA. The study also found that for-profit hospices are more likely to treat people needing longer-term, lower-cost services, which may be due to Medicare’s payment of a fixed daily fee for all hospice care.
NONPROFIT HEALTH PLANS
Guide for Nonprofit Health Plans on Community Benefit Practices
This eight-page document, approved in May 2005 by the Alliance’s Board of Directors, is intended to assist nonprofit health plans in planning, implementing, assessing and reporting on their community benefits. Where relevant and appropriate, these guidelines draw upon the guidance developed for nonprofit hospitals and other health care providers by the Catholic Health Association and VHA, Inc.
Most Top-Quality HMOs Are Again Nonprofit
This November 29, 2011 Alliance press release reports that most of the top-quality health plans in the U.S., whether offering private, Medicare and/or Medicaid products, are nonprofit for the seventh straight year. This analysis is based on the latest NCQA quality rankings.
Most Top Member-Satisfying Health Plans Are Again Nonprofit
This March 30, 2012 press release reports that all but one of the 17 health plans in the U.S. rated #1 in member satisfaction in their regions, as well as all or most of the health plans with ‘among the best,” “better the most,” and “above average” member satisfaction ratings in their regions, are nonprofit or otherwise non-investor-owned. This analysis is based on the results of the most recent survey by J.D. Power and Associates. These findings are similar to the results of all of this firm's previous annual surveys, of which this was the sixth.
Reaching for the Stars: Quality Ratings of Medicare Advantage (MA) Plans, 2011
This February 2011 issue brief by the Kaiser Family Foundation reports that, based on CMS quality scores for MA plans, non-for-profit MA plans have higher average overall ratings (4.08 stars versus 3.22 stars).
Consumer Views on Health Plan Ownership Status
In this October 14, 2011 comment letter to CMS on the requirements for the summary of coverage and benefits form to be completed by health plans participating in state health insurance exchanges, the Alliance reports on the results of an August 2010 nationwide Zogby telephone survey which found that, while a significant portion of consumers do not know whether their current health insurance is provided by a not-for-profit or for-profit health plan, most think that there is a difference between the two types of ownership and that the difference is important.
Commentary on Vilification of Nonprofit Health Plans
In this October 11, 2010 commentary in Modern Healthcare, entitled “Stop Vilifying Insurers,” Alliance President Bruce McPherson sets the record straight with a series of facts on why some federal officials should cease and desist vilification of all private health insurers as unaccountable and greedy and should instead recognize ownership, mission and performance differences, especially between not-for-profit and for-profit health insurers.
Increased Concentration of Health Plan Markets Can Benefit Consumers Through Lower Hospital Prices
This is the key finding in this study report by Glen Melnick from USC’s School of Policy, published in the September 2011 issue of Health Affairs.
Why More Insurers Competing in Health Care Does Not Make Sense
In this two-part commentary appearing in the New York Times on October 29, 2010 and November 5, 2010, Uwe Reinhardt, economics professor at Princeton, presents both econometric and logical reasons why health insurance markets are different and why increased concentration of those markets can lower both administrative expenses and health care delivery costs.
Hospitals View Nonprofit Blues More Favorably Than Largest For-Profit Health Insurers
On March 7, 2008 Davies Public Affairs released the results of its second annual survey to assess what hospital
executives think about the major private health insurers with whom they relate. Their report is available at
Seemingly lost in the shuffle of the report and press coverage, however, were the following findings:
Blue Shield of California Caps Profits
- Hospitals also held comparatively negative opinions about the second largest for-profit health insurer: WellPoint
- Hospitals held comparatively positive opinions about state/regional Blue Cross Blue Shield plans—virtually all nonprofit and non-investor-owned. (Only one for-profit insurer, Aetna, showed somewhat better overall results, but Aetna represented on average less than 7% of respondents' insurance revenues compared to over 20% for the Blue plans)The enclosed summary shows both overall results and results for each specific element of the relationship surveyed--for the nonprofit Blue plans, for WellPoint, and for United Healthcare. Together they accounted for about 56% of the respondents' insurance revenues. About 26 % of respondents' insurance revenues were accounted for by miscellaneous health insurers not identified in the survey, and the remaining 17% by a combination of Aetna, CIGNA and Coventry/First Health.
In a June 7 commentary in the San Francisco Chronicle entitled ‘Blue Shield Will Cap Profits,” Bruce Bodaken, President of Blue Shield of California, announced that his plan was making a long-term commitment, arguably the first of its kind in the U.S., to voluntarily cap its annual net income at 2 percent of revenue and return any overage at the end of a year to its members and the community (e.g., physicians, hospitals, the safety net)