Dependable Data. Reduced Risks. – How to Best Define your Hospital’s CHNA Community

How to Best Define your Hospital’s CHNA Community

An important first step in the Community Health Needs Assessment (CHNA) process is defining a hospital’s community. Unlike other regulatory service area definitions, the 501(r)(3) requirements for non-profit hospitals allow facilities a great deal of flexibility in defining their community. In this article, we elaborate on how to interpret these requirements to easily navigate secondary data collection, align with partners, minimize risk, and direct community
benefit initiatives.

strategic consulting


A hospital’s traditional primary and secondary service area, or the service area(s) defined by business development or marketing departments, may differ significantly from the community benefit service area. Carnahan Group’s recommended first step in defining a community is to review hospital discharge data for a recent time frame (typically one year). Using this information, a hospital can seek to include the vast majority of the areas that
patients originate from. For example, a facility could examine the ZIP Codes where the top 50% of inpatient discharges originate. This process may leverage the existing calculation of a facility’s Stark-compliant service area.

Our team recommends defining the CHNA community at the county level whenever possible as a means of avoiding exclusion of the specific sub-populations mentioned within the IRS guidelines. Using the inpatient discharge data as a guide, we suggest selecting whole counties that include the majority of patients served. A CHNA conducted for a county-level community can still include a multitude of data points at the ZIP-Code, block group, or census
tract-level, as appropriate.

Facilities targeting specific types of patients, such as a children’s hospital, long-term care facility, or a heart hospital, may choose to further refine their community according to patient populations or specific clinical functions. In these instances, the county-level geography may be layered with specific sub-populations.

The list below includes examples of community definitions:

  1. Jackson County
  2. Children within Hillsborough County
  3. Individuals with heart disease within Orleans Parish
  4. Older adults within Jefferson County
  5. Cancer patients, survivors, and their family members within the tri-county region


Part of the needs assessment process includes gathering relevant secondary data. Although it may be tempting to dissect a hospital’s geographical service area by ZIP-Code or Census Tract to gain tactical precision, it can be extremely valuable to zoom out and compare a community to others across the state or nation. Many sources of important demographic and health outcomes information provide statewide or national datasets with county-level information. This type of benchmarking is perhaps best demonstrated by the County Health
Rankings & Roadmaps program.

To summarize, it is beneficial to consider the availability of up-to-date secondary data, and corresponding benchmarks, in constructing a community definition.


Defining a facility’s community in tandem with other entities, like a local or county health department, can enable collaboration and sharing of resources. Several other organizations are also required to conduct regular needs assessments involving similar types of primary and secondary data. The development of a shared community definition and a shared assessment can lead to significant cost savings and better align multiple organizations for
collaborative implementation strategies.

It is important to note that any facilities engaging in a joint report should define their community in a manner that encompasses each individual facility’s whole community.


The IRS guidance stipulates that a hospital facility should not define their community in a way that excludes medically underserved, low-income, or minority populations.

A community definition should not meaningfully exclude individuals or sub-populations experiencing:

  1. Health disparities
  2. Health insurance or underinsurance
  3. Eligibility for financial assistance policy
  4. Geographic barriers (i.e. rural residents)
  5. Language barriers including individuals with limited English proficiency
  6. Financial or cost barriers
  7. Transportation difficulties
  8. Stigma
  9. Other barriers

Careful consideration of inpatient discharge data and the level of granularity of the geographical definition can ensure that facilities remain in compliance with the requirements.


As a partner, Carnahan Group guides hospital systems and facilities to identify a community definition that promotes collaboration and resource sharing while minimizing the risk of excluding sub-populations outlined in the IRS guidance.

Each of Carnahan Group’s CHNA reports includes a clear and concise documentation of the methodology utilized to define the community. The community definition enables the collection of meaningful primary and secondary data and the compilation of a valuable CHNA that fulfills all relevant requirements.


Carnahan Group, Inc. is an innovative healthcare advisory firm that leverages its expertise and technology to drive compliance improvements and cost reductions for some of the nation’s largest healthcare organizations. For almost two decades, Carnahan Group has served the healthcare industry by providing physician compensation and business valuations, Community Health Needs Assessments, and other strategic services.


Discover the benefits of partnering with Carnahan Group on your next CHNA.

Call us at 813.289.2588 or click here.

Written By: Kelsey Anderson, Senior Strategic Healthcare Analyst

Download this Whitepaper here.