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Encouraging Nonprofit Hospitals To Invest In Community Building: The Role Of IRS ‘Safe Harbors’

February 11, 2014
by Sara Rosenbaum, Amber Rieke, and Maureen Byrnes
Health Affairs

A report released by Trust for America’s Health (TFAH) and the New York Academy of Medicine (NYAM) entitled A Compendium of Proven Community Based Prevention Programs provides further fuel for such a “safe harbor” initiative. The new report highlights 79 evidence-based disease and injury prevention programs across the country that have saved lives and improved health. It also includes an extensive review of peer-reviewed studies that evaluated the effectiveness of community-based prevention programs designed to reduce tobacco use, injuries, asthma, alcohol abuse, and sexually-transmitted infections; increase physical activity; and improve eating habits.

The TFAH/NYAM report clearly underscores the importance of investing in community building activities as an effective strategy for improving community health. The report also provides evidence of the fiscal return on investment that can be realized through such programs. For example, the report cites a cost-benefit analysis approach used to estimate the return on investment for a tobacco cessation program implemented by the State of Massachusetts. According to the report, administrative data indicated that program costs were about $183 per program participant (in 2010 dollars).  The study also estimated inpatient savings per participant of $571, meaning every $1 in program costs was associated with $3.12 in medical savings, for a $2.12 return on investment to the Medicaid program for every dollar spent.

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