Nonprofit Hospital Community Benefit Spending and Readmission Rates

Addressing social determinants of health may help hospitals improve population health and outcomes that are tied to financial incentives, such as readmission rates. Whether this strategy is effective remains unknown. The authors measure the association between nonprofit hospital spending on their community's social needs and Medicare readmission rates. This is a retrospective cohort study (July 2013 to June 2014) that combines Internal Revenue Service tax reports of community benefit spending by private, acute care, nonprofit hospitals with Medicare readmissions data for residents of their surrounding community, the hospital's zip code. Total community benefit spending and 2 of the largest subsets of spending-health care-related and community-directed spending-were measured and normalized as the proportion of each hospital's total expenditure. Associations between quintiles of community benefit spending and Medicare readmission rates were measured using discharge-level multivariate linear regression, adjusting for patient, hospital, community characteristics, and local public health department spending. The sample consisted of 1405 nonprofit hospitals with 341,913 discharges. Associations between readmission rates and total community benefit spending and the health care-related subset were not statistically significant. Discharges from hospitals in the upper quintiles of community-directed spending were associated with lower readmission rates by 0.82 to 1.21 absolute percentage points (P = 0.01 to <0.001) compared to the lowest quintile. The magnitude of associations between community-directed spending and readmissions was larger for preventable readmissions and smaller when including beneficiaries beyond the hospital's zip code. These associations suggest that community-directed spending may be associated with better health care outcomes.