PUBLIC AND ORAL HEALTH
Authors: Mays G. , Mamaril C. 
Published: August 2020

The Affordable Care Act (ACA) expanded health insurance coverage and strengthened incentives for health care organizations to engage in community‐wide health improvement initiatives. These incentives include enhanced community benefit requirements for tax‐exempt hospitals, adjusted medical loss ratio requirements for health insurers, tax incentives for employers, and competitive federal funding through the Prevention and Public Health Fund. Reduced uncompensated care costs and cost‐shifting may allow hospitals and other institutions to increase investments in community health, particularly when coupled with incentives to do so. Prior research is inconsistent regarding how health care organizations have responded to these reforms, due in part to data limitations. This study uses novel longitudinal data from a national cohort of U.S. communities to estimate whether changes in coverage and uncompensated care have led to changes in the implementation of community health activities by hospitals, physicians, insurers, and employers.

The National Longitudinal Survey of Public Health Systems (NALSYS) follows a national cohort of approximately 600 communities between 2012 and 2018 to measure the implementation of guideline‐recommended community health improvement activities in each community and the network of organizations contributing to each activity. Importantly, these data are reported by local public health officials rather than by hospitals and health care institutions who may inflate reported contributions. Survey data are linked with county‐level coverage estimates, demographic and socioeconomic characteristics, health care market structure data, and CMS hospital cost report data on uncompensated care costs. Fixed‐effects regression models with instrumental variables (IV) are used to estimate the causal effects of changes in coverage and uncompensated care on implementation of community health activities by hospitals, physicians, insurers, and employers while controlling for unmeasured confounding.

Stratified random sample of 600 U.S. counties observed between 2012 and 2018.

Coverage increased and uncompensated care costs declined after 2014 in 87% and 73% of communities, respectively, but by widely varying magnitudes. IV estimates indicate that a 10% reduction in uncompensated care costs resulted in a 14% increase in implementation of community health activities by hospitals (P < 0.01), along with an 8% increase in implementation by insurers (P < 0.05). Results for physicians and employers were not statistically significant. The estimated hospital and insurer effects were concentrated in states that expanded Medicaid eligibility under ACA (P < 0.01).

Hospitals and insurers have expanded their involvement in community‐wide health activities proportionate with the level of decline in demand for uncompensated care in their communities.

Incentives for health care institutions to engage in community‐wide health improvement initiatives appear effective in communities where gains in coverage lead to savings that can be redeployed for community benefit. This response may be an important but unrecognized pathway through which coverage gains improve population health, but recent erosion in coverage may dampen this effect.

The Robert Wood Johnson Foundation.