Federal health care reform has expanded medical insurance to millions of people, altering the role that hospitals play in improving community health. However, current federal and state community benefit policy is an ineffective tool for ensuring that hospitals address the social determinants of health afflicting their communities. Policy shifts and other incentives that promote improved population health outcomes can encourage health care organizations to do the same. Hospitals' Responsiveness to Community Needs In the early 19th century, hospitals emerged as welfare institutions, or as branches of cities' almshouses. 1 The municipal almshouse served as a haven for its elderly, unemployed, ill, disabled, delinquent, minors, and incompetent. In the words of Charles Rosenberg, the internal composition of the almshouse "inevitably reflected the diversity of misfortunes afflicting its clients." 1 Physicians became widely engaged to care for clientele at almshouses, where staff positions were sought after as valuable learning and teaching opportunities. Thus, at no point when the hospital first emerged, was "public medicine" detached from medical careers or "distinguishable from the more pervasive problem of dependency." 1 However, beginning in the early 20th century, the welfare hospital for the "rootless and dependent" 1 gradually transformed into a market institution, potentially profitable and powered by patient payments. 1,2 Simultaneously, physicians became increasingly employed by national medical networks and academic institutions whose clientele were less marked by dependency. 2 As a result, market forces in today's medical system may be opposed to the charitable interests of hospitals' past. Nevertheless, nongovernmental nonprofit hospitals retain remnants of their historical mission-a "charitable purpose." 3 In 2019, the American Hospital Association reported that 56% of community hospitals in the United States are organized as nongovernment nonprofit organizations, and, government hospitals included, nearly 80% of community hospitals enjoy tax-exempt status. 4 In return, they are exempt from billions in state and federal tax liability (an estimated $24.6 billion in 2011 5). Courts typically describe the indirect subsidy as a quid pro quo that charitable hospitals receive for alleviating a substantial government burden through the care they provide.
