Definitions
Charity care. Free care and discounted care given
to people who are unable to pay, based on established
fnancial assistance policies. Charity care does not
include bad debt. It should be reported in terms of costs,
not charges.
Community benefts. Community benefts are pro-
grams or activities that provide treatment or health and
healing as a response to identifed community needs.
They are not provided for marketing purposes. A com-
munity beneft must meet at least one of the following
criteria:
■
■
Generates a low or negative margin.
■
■
Responds to needs of special populations, such as
minorities, older people and people with disabilities who
are living in poverty, people with chronic mental illness,
and other disenfranchised people.
■
■
Supplies services or programs that would likely be
discontinued—or would need to be provided by another
not-for-proft or government provider—if the decision was
made on a purely fnancial basis.
■
■
Responds to public health needs.
■
■
Involves education or research that improves overall
community health.
Medicaid/Public program expense. Payment
shortfall incurred when caring for patients with Medicaid
coverage. The payment shortfall is not the same as a
contractual allowance, which is the full difference be-
tween charges and government payments. It is the
difference between reimbursement provided and the
cost of care.
Community health improvement services. Activi-
ties carried out for the express purpose of improving com-
munity health. They extend beyond patient care activities
and are usually subsidized by the health care organiza-
tion. Community services do not generate inpatient or
outpatient bills, although there may be a nominal patient
fee or sliding scale fee. Forgiving inpatient and outpatient
care bills to low-income people should be reported as
charity care.
Subsidized health services. Clinical services
provided despite a fnancial loss. The fnancial losses are
so signifcant that negative margins remain after remov-
ing the effects of charity care and Medicaid shortfalls.
Nonetheless, the service is provided because it meets an
identifed community need and if no longer offered would
either be unavailable in the area or fall to the government
or another not-for-proft organization to provide the care.
Cost of health professions education. This
includes funding of educational programs that are open
to all health professionals in the community or that result
in a degree or training necessary to practice in a health
profession.
Financial and in-kind contributions to other
community groups. This category includes funds
and in-kind services donated to individuals or the com-
munity at large, including contributions or matching
funds provided to not-for-proft community organizations,
contributions to charity events of not-for-proft organiza-
tions after subtracting the market value of participation
by the employees or organization, contributions provided
to individuals for emergency assistance, and scholar-
ships to community members not specifc to health care
professions.
Community-building activities. Community-building
activities include cash donations, in-kind donations and
budgeted expenditures for the development of community
health programs and partnerships. Community-building
enhancements include physical improvements, economic
development, community health initiatives, partnerships,
environmental improvements and community leadership
skills training.
Prisoner care written off at cost. DCH Regional
Medical Center and Northport Medical Center write off
charges at cost for care provided to prisoners housed in
city and county jails.
Bad debt at cost. Uncollectible charges, excluding
contractual adjustments, arising from failure to pay by
patients whose health care has not been classifed as
charity care.
DCH Health System
VHA/CHA community benefit cost reporting Fiscal Year 2010
Net community beneft expense
Benefts for people living in poverty
Charity care at cost $3,850,512
($8,333,512 total charity care cost, less $4,483,000
received from Tuscaloosa County sales tax)
Unreimbursed Medicaid/public program expense $13,297,133
SUBTOTAL $17,147,645
Benefts for broader community
Community health improvement services $5,411
Subsidized health services $588,438
Cost of health professions education $1,259,168
Financial and in-kind contributions to other community groups $76,872
Community-building activities $20,260
SUBTOTAL $1,950,149
Additional expenses
on behalf of the community
Prisoner care written off at cost $199,555
Bad debt at cost $27,455,248
SUBTOTAL $27,654,803
TOTAL $46,752,597
Total 2010 community beneft is 11 percent of DCH Health System net patient revenue.
For every dollar of tax support, DCH returns approximately $10.43 in community beneft.
F A L L 2 0 1 1
7
H E A L T H Y C O M M U N I T Y