Comparison of the Financial and Operational Characteristics of For-Profit and Nonprofit Hospitals Receiving Federal Graduate Medical Education Payments, 2011-2020.

This study compares graduate medical education (GME) payments between nonprofit and for-profit hospitals between 2011 and 2020 to assess how hospitals value GME.

Characteristics of Academic-Affiliated Health Systems.

PURPOSE: Changing market forces increasingly are leading academic medical centers (AMCs) to form or join health systems. But it is unclear how this shift is affecting the tripartite academic mission of education, research, and high-quality patient care. To explore this topic, the authors identified and characterized the types of health systems that owned or managed AMCs in the United States in 2016. METHOD: The authors identified AMCs as any general acute care hospitals that had a resident-to-bed ratio of at least 0.25 and that were affiliated with at least one MD- or DO-granting medical school. Using the Agency for Healthcare Research and Quality 2016 Compendium of U.S. Health Systems, the authors also identified academic-affiliated health systems (AHSs) as those health systems that owned or managed at least one AMC. They compared AMCs and other general acute care hospitals, AHSs and non-AHSs, and AHSs by type of medical school relationship, using health system size, hospital characteristics, undergraduate and graduate medical education characteristics, services provided, and ownership. RESULTS: Health systems owned or managed nearly all AMCs (361, 95.8%). Of the 626 health systems, 230 (36.7%) met the definition of an AHS. Compared with other health systems, AHSs included more hospitals, provided more services, and had a lower ratio of primary care doctors to specialists. Most AHSs (136, 59.1%) had a single, shared medical school relationship, whereas 38 (16.5%) had an exclusive medical school relationship and 56 (24.3%) had multiple medical school relationships. CONCLUSIONS: These findings suggest that several distinct types of relationships between AHSs and medical schools exist. The traditional vision of a medical school having an exclusive relationship with a single AHS is no longer prominent.

The place of private care governance in the South African health care system.

BACKGROUND: South Africa essentially has two health care systems-the public and private ones. While much is known about how the public system operates, little work has been conducted on the private sector, perhaps not surprisingly in a profit-oriented, proprietary system. But it is a massive system with its own agenda, interests, and organizations. In this paper, we address the place of private care governance issues, one seen by government as maldistributed, costly, and controlled by few groups and the medical search for profit. METHODS: Using qualitative in-depth interviews, 10 top executive managers of the hospital were asked about its functionality in terms of patient care, profitability, and the practice of governance. Data were analyzed based on themes using NVivo 10 software. RESULTS: The study demonstrates that private hospital functionality finds meaning in board structure, composition and functions, purposeful governance practices as evidenced in well-designed management structures and roles, systematizing governance through the planning of activities, and devising appropriate strategies to deal with both internal and external pressures in the health care environment. CONCLUSION: The study findings establish that shareholders and managers goals converge resulting in the institutionalization and consolidating of relational governance practices in the hospital. Yet other stakeholders appeared to be sidelined.

A robust analysis of hospital efficiency and factors affecting variability.

The objectives of this paper are to use data envelopment analysis to measure hospital inefficiency in a way that accounts for patient outcomes and to study the association between organizational factors, such as hospital-physicians integration level and teaching status, and market competition with hospital inefficiency. We apply the robust data envelopment analysis approach to a sample of private (both not-for-profit and for-profit) hospitals operating in the United States. Our data envelopment analysis model includes mortality and readmission rates as bad outputs and admissions, surgeries, emergency room, and other visits as good outputs. Therefore, our measurement of hospital inefficiency accounts for quality. We then use a subsampling regression analysis to determine the predictors of hospital inefficiency. For-profit, fully integrated and teaching hospitals were more efficient than their counterparts. Also hospitals located in more competitive markets were more efficient than those located in less competitive markets. Incorporating quality in the measurement of hospital efficiency is key for producing valid efficiency scores. Hospitals in less competitive markets need to improve their efficiency levels. Moreover, high levels of hospital physician integration might be instrumental in ensuring that hospitals achieve their efficiency goals.

Wait times in Canada.

A significant barrier to accessing healthcare in Canada is long waiting lists, which can be linked to the way that Medicare was structured. After significant pressure, provincial governments began to address wait times. An example of a successful strategy to reduce wait times for elective surgery is the Saskatchewan Surgical Initiative, which saw wait times in the province change from being among the longest in Canada to the shortest.

Hospital-ownership status and cesareans in the United States: The effect of for-profit hospitals.

BACKGROUND: Given the increasing proportion of United States hospitals that are for-profit, we examined whether women who give birth in for-profit hospitals are more likely to have cesareans than women who give birth in not-for-profit hospitals. We hypothesized that cesareans are more likely to occur in for-profit hospitals because of the organizational emphasis on short-term financial indicators, including payment of shareholder dividends. METHODS: We used logistic regression and difference of means tests to analyze data from the Listening to Mothers III survey of women who gave birth in the United States in 2011 and 2012. RESULTS: Controlling for patient-level characteristics, we found that the odds of a woman's having a cesarean were two times higher in for-profit hospitals than in not-for-profit hospitals. We also found for-profit hospitals were significantly more likely to be members of multihospital systems and to have fewer full-time registered nurses and staff members per hospital bed. CONCLUSION: This research suggests that women who give birth in for-profit hospitals are more likely to have cesareans than women who give birth in not-for-profit hospitals. This information is important to women when deciding where to give birth. Knowing which hospital characteristics are associated with a greater likelihood of cesarean is helpful since hospital cesarean rates may be difficult to find. These findings are also informative for obstetric professionals, who can implement improvement initiatives to decrease cesarean rates and improve the overall quality of care for childbearing women in the United States.

Do diagnosis-related group-based payments incentivise hospitals to adjust output mix?

This study investigates whether the diagnosis-related group (DRG)-based payment method motivates hospitals to adjust output mix in order to maximise profits. The hypothesis is that when there is an increase in profitability of a DRG, hospitals will increase the proportion of that DRG (own-price effects) and decrease those of other DRGs (cross-price effects), except in cases where there are scope economies in producing two different DRGs. This conjecture is tested in the context of the case payment scheme (CPS) under Taiwan's National Health Insurance programme over the period of July 1999 to December 2004. To tackle endogeneity of DRG profitability and treatment policy, a fixed-effects three-stage least squares method is applied. The results support the hypothesised own-price and cross-price effects, showing that DRGs which share similar resources appear to be complements rather substitutes. For-profit hospitals do not appear to be more responsive to DRG profitability, possibly because of their institutional characteristics and bonds with local communities. The key conclusion is that DRG-based payments will encourage a type of 'product-range' specialisation, which may improve hospital efficiency in the long run. However, further research is needed on how changes in output mix impact patient access and pay-outs of health insurance.

For-profit hospital ownership status and use of brachytherapy after breast-conserving surgery.

BACKGROUND: Little is known about the relationship between operative care for breast cancer at for-profit hospitals and subsequent use of adjuvant radiation therapy (RT). Among Medicare beneficiaries, we examined whether hospital ownership status is associated with the use of breast brachytherapy--a newer and more expensive modality--as well as overall RT. METHODS: We conducted a retrospective study of female Medicare beneficiaries who received breast-conserving surgery for invasive breast cancer in 2008 and 2009. We assessed the relationship between hospital ownership and receipt of brachytherapy or overall RT by using hierarchical generalized linear models. RESULTS: The sample consisted of 35,118 women, 8.0% of whom had breast-conserving operations at for-profit hospitals. Among patients who received RT, those who underwent operation at for-profit hospitals were more likely to receive brachytherapy (20.2%) than patients treated at not-for-profit hospitals (15.2%; odds ratio [OR] for for-profit versus not-for-profit: 1.50; 95% confidence interval [95% CI] 1.23-1.84; P < .001). Among women aged 66-79 years, there was no relationship between hospital ownership status and overall use of RT. Among women ages 80-94 years of age--the group least likely to benefit from RT due to shorter life expectancy--undergoing breast-conserving operations at a for-profit hospital was associated with greater overall use of RT (OR 1.22; 95% CI 1.03-1.45, P = .03) and brachytherapy use (OR 1.66; 95% CI 1.18-2.34, P = .003). CONCLUSION: Operative care at for-profit hospitals was associated with increased use of the newer and more expensive RT modality, brachytherapy. Among the oldest women who are least likely to benefit from RT, operative care at a for-profit hospital was associated with greater overall use of RT, with this difference largely driven by the use of brachytherapy.

Community benefits provided by religious, other nonprofit, and for-profit hospitals: a longitudinal analysis 2000-2009.

BACKGROUND: Nonprofit hospitals (NFPs) are expected to provide community benefits to justify the tax benefits they receive, but recent budgetary constraints have called into question the degree to which the tax benefits are justified. The empirical literature comparing community benefits provided by NFPs and their for-profit counterparts is mixed. However, NFPs are not a homogenous group and can include religious hospitals, community-owned hospitals, or academic medical centers. PURPOSE: This longitudinal study examines how religious hospitals compare with other NFPs and for-profit hospitals with respect to providing community benefits and how the provision of community benefits by hospitals has changed over time. METHODOLOGY: Using a pooled cross-sectional design, we examine two summated scores based on questions from the American Hospital Association annual survey that focus on community orientation among hospitals. We analyze two regressions with year, facility, and market controls to determine how religious hospitals compare with the other groups over time. FINDINGS: Overall, 11% of U.S. hospitals are religious. Religious hospitals were more likely to engage in each individual community benefit activity examined. In addition, the mean values of community benefits provided by religious hospitals, as measured on two summated scores, were significantly higher than those provided by other hospital types in bivariate and regression analyses. Overall, community benefits provided by all hospitals increased over time and then leveled off during the start of the recent economic downturn. PRACTICE IMPLICATIONS: As the debate continues regarding federal tax exemption status, policymakers should consider religious hospitals separately from NFPs. Managers at religious hospitals should consider how their increased levels of community benefits are related to their missions and set benchmarks that recognize and communicate those achievements.

The way forward.

Are independent hospitals still viable? Yes, but partnerships can provide important support.

To remain independent--or not? Strategies for assessing future positions.

Independent hospitals should take six steps when considering the viability of maintaining independence: Evaluate the links between independence and organizational mission. Assess market factors. Analyze the organization's financial status. Perform a strategic assessment. Evaluate the potential benefits of partnership. Assess the organization's ability to implement strategy.

The impact of HCA's 2006 leveraged buyout on hospital performance.

Leveraged buyout (LBO) arrangements are a reorganization strategy whereby a firm assumes a substantial amount of debt to buy back its publicly held stock to become privately held. LBOs offer a firm several advantages and have the potential to increase efficiency. In the past 20 years, several healthcare firms have engaged in LBOs, but the literature on performance changes in healthcare organizations as a result of an LBO is limited. In this article, we report on a study that examined the performance of Hospital Corporation of America (HCA) hospitals before and after the LBO that was initiated in 2006. We used data from the Medicare Hospital Cost Report Information System and analyzed data from 130 HCA hospitals and 490 comparison hospitals. Findings show that HCA hospitals reduced expenses and their number of full-time equivalents (FTEs) relative to local competitor hospitals. HCA hospitals' cash-flow-margin ratio was substantially higher when adjusted for its local competing hospitals at the beginning of the LBO as well as at end of the LBO. When compared to local hospitals, HCA hospitals had a significant decrease in their capital investment in fixed assets from 2006 to 2009. These findings underscore the effectiveness of HCA's management strategies to repay debt and increase the value of the company, and they are informative for healthcare firms and their managers who are considering LBOs.

Hospital ownership type and treatment choices.

In the face of increasing health care costs, taxing not-for-profit hospitals may be seen as the right choice to increase government revenues if not-for-profit hospitals are not different from their for-profit counterparts. This study investigates how hospital ownership type affects treatment choices to show whether ownership type and teaching status are correlated with choosing a procedure as the treatment and how these choices relate to patient insurance type. Not-for-profit hospitals significantly differ from for-profits in terms of treatment choices of less profitable patients and all hospitals are more likely to accord the procedure when the patient is privately insured than uninsured though teaching government hospitals are the most likely to accord the procedures for all insurance types. Considering treatment choices, not-for-profit hospitals have different objectives than for-profit and government hospitals and in terms of profit-seeking behavior, not-for-profit hospitals seem to lie between for-profit and government hospitals.