Community Benefit Laws, Hospital Ownership, Community Orientation Activities, and Health Promotion Services

Background: The hospital industry has exhibited a pattern of isomorphic change with regard to business operations. Many states have enacted community benefit laws to compel hospitals to provide community benefits to improve their community orientation. Purposes: We seek to identify what kinds of isomorphic change might be associated with the enactment of these state community benefit laws. To do this, we conducted a longitudinal study of changes in community benefit provided by hospitals in both states with community benefit laws and states without community benefit laws. Methodology/Approach: This study used a quasi-experimental panel design with the passage of community benefit laws/guidelines as the treatment variable. Our sample was composed of 390 not-for-profit hospitals and 129 investor-owned hospitals in 9 treatment states and 1,493 not-for-profit and 714 investor-owned hospitals in 35 control states. Community benefit was measured by the (a) community orientation activities reported and the (b) health promotion services offered by hospitals. Findings: The not-for-profit hospitals in the states without community benefit laws had increased their community orientation activities and health promotion services in a manner similar to that of the not-for-profit hospitals in the states with community benefit laws. There was no significant difference between the not-for-profit hospitals in the states without community benefit laws and those in the states with community benefit laws in 1994 or 2006 for either dependent variable. The changes in the community benefit for the not-for-profit hospitals in the states without community benefit laws and in the states with community benefit laws were significant and positive for both dependent variables. Practice Implications: Managers of acute care hospitals should engage in community orientation activities to maintain their legitimacy, differentiate themselves from other hospitals, avoid regulation, and manage resource dependency on managed-care payers