Association between hospital conversions to for-profit status and clinical and economic outcomes.

IMPORTANCE: An increasing number of hospitals have converted to for-profit status, prompting concerns that these hospitals will focus on payer mix and profits, avoiding disadvantaged patients and paying less attention to quality of care. OBJECTIVE: To examine characteristics of US acute care hospitals associated with conversion to for-profit status and changes following conversion. DESIGN, SETTING, AND PARTICIPANTS: Retrospective cohort study conducted among 237 converting hospitals and 631 matched control hospitals. Participants were 1,843,764 Medicare fee-for-service beneficiaries at converting hospitals and 4,828,138 at control hospitals. EXPOSURES: Conversion to for-profit status, 2003-2010. MAIN OUTCOMES AND MEASURES: Financial performance measures, quality process measures, mortality rates, Medicare volume, and patient population for the 2 years prior and the 2 years after conversion, excluding the conversion year, assessed using difference-in-difference models. RESULTS: Hospitals that converted to for-profit status were more often small or medium in size, located in the south, in an urban or suburban location, and were less often teaching institutions. Converting hospitals improved their total margins (ratio of net income to net revenue plus other income) more than controls (2.2% vs 0.4% improvement; difference in differences, 1.8% [ 95% CI, 0.5% to 3.1%]; P = .007). Converting hospitals and controls both improved their process quality metrics (6.0% vs 5.6%; difference in differences, 0.4% [95% CI, -1.1% to 2.0%]; P = .59). Mortality rates did not change at converting hospitals relative to controls for Medicare patients overall (increase of 0.1% vs 0.2%; difference in differences, -0.2% [95% CI, -0.5% to 0.2%], P = .42) or for dual-eligible or disabled patients. There was no change in converting hospitals relative to controls in annual Medicare volume (-111 vs -74 patients; difference in differences, -37 [95% CI, -224 to 150]; P = .70), Disproportionate Share Hospital Index (1.7% vs 0.4%; difference in differences, 1.3% [95% CI, -0.9% to 3.4%], P = .26), the proportion of patients with Medicaid (-0.2% vs 0.4%; difference in differences, -0.6% [95% CI, -2.0% to 0.8%]; P = .38) or the proportion of patients who were black (-0.4% vs -0.1%; difference in differences, -0.3% [95% CI, -1.9% to 1.3%]; P = .72) or Hispanic (0.1% vs -0.1%; difference in differences, 0.2% [95% CI, -0.3% to 0.7%]; P = .50). CONCLUSIONS AND RELEVANCE: Hospital conversion to for-profit status was associated with improvements in financial margins but not associated with differences in quality or mortality rates or with the proportion of poor or minority patients receiving care.

The relationship between transformational leadership and social capital in hospitals--a survey of medical directors of all German hospitals.

CONTEXT: The German hospital market has been undergoing major changes in recent years. Success in this new market is determined by a multitude of factors. One is the quality of the social relationships between staff and the presence of shared values and rules. This factor can be considered an organization's "social capital." OBJECTIVE: This study investigates the relationship between social capital and leadership style in German hospitals using a written survey of medical directors. DESIGN AND SETTING: In 2008, a cross-sectional representative study was conducted with 1224 medical directors from every hospital in Germany with at least 1 internal medicine unit and 1 surgery unit. Among the scales included in the standardized questionnaire were scales used to assess the medical directors' evaluation of social capital and transformational leadership in the hospital. We used a multiple linear regression model to examine the relationship between social capital and internal coordination. We controlled for hospital ownership, teaching status, and number of beds. PARTICIPANTS: In total, we received questionnaires from 551 medical directors, resulting in a response rate of 45.2%. The participating hospitals had an average of 345 beds. The sample included public (41.3%), not-for-profit (46.9%), and for-profit (11.7%) hospitals. RESULTS: The data, which exclusively represent the perceptions of the medical directors, indicate a significant correlation between a transformational leadership style of the executive management and the social capital as perceived by medical directors. A transformational leadership style of the executive management accounted for 36% of variance of the perceived social capital. CONCLUSION: The perceived social capital in German hospitals is closely related to the leadership style of the executive management. A transformational leadership style of the executive management appears to successfully strengthen the hospital's social capital.

Provider diversity in the English NHS: a study of recent developments in four local health economies.

OBJECTIVES: To assess the impact of provider diversity on quality and innovation in the English NHS by mapping the extent of diverse provider activity and identifying the differences in performance between Third Sector Organisations (TSOs), for-profit private enterprises, and incumbent organizations within the NHS, and the factors that affect the entry and growth of new providers. METHODS: Case studies of four local health economies. Data included: semi-structured interviews with 48 managerial and clinical staff from NHS organizations and providers from the private and third sector; some documentary evidence; a focus group with service users; and routine data from the Care Quality Commission and Companies House. Data collection was mainly between November 2008 and November 2009. RESULTS: Involvement of diverse providers in the NHS is limited. Commissioners' local strategies influence degrees of diversity. Barriers to entry for TSOs include lack of economies of scale in the bidding process. Private providers have greater concern to improve patient pathways and patient experience, whereas TSOs deliver quality improvements by using a more holistic approach and a greater degree of community involvement. Entry of new providers drives NHS trusts to respond by making improvements. Information sharing diminishes as competition intensifies. CONCLUSIONS: There is scope to increase the participation of diverse providers in the NHS but care must be taken not to damage public accountability, overall productivity, equity and NHS providers (especially acute hospitals, which are likely to remain in the NHS) in the process.

The internal processes and behavioral dynamics of hospital boards: an exploration of differences between high- and low-performing hospitals.

BACKGROUND: Nonprofit hospital boards are under increasing pressure to improve financial, clinical, and charitable and community benefit performance. Most research on board effectiveness focuses on variables measuring board structure and attributes associated with competing ideal models of board roles. However, the results do not provide clear evidence that one role is superior to another and suggest that in practice boards pursue hybrid roles. Board dynamics and processes have received less attention from researchers, but emerging theoretical frameworks highlight them as key to effective corporate governance. PURPOSE: We explored differences in board processes and behavioral dynamics between financially high- and low-performing hospitals, with the goal of developing a better understanding of the best board practices in nonprofit hospitals. METHODOLOGY/APPROACH: A comparative case study approach allowed for in-depth, qualitative assessments of how the internal workings of boards differ between low- and high-performing facilities. FINDINGS: Boards of hospitals with strong financial performance exhibited behavioral dynamics and internal processes that differed in important ways from those of hospitals with poor financial performance. PRACTICE IMPLICATIONS: Boards need to actively attend to key processes and foster positive group dynamics in decision making to be more effective in governing hospitals.

Effect of participating in Taiwan Quality Indicator Project on hospital efficiency in Taiwan.

OBJECTIVE: To examine the effect of participating in Taiwan Quality Indicator Project (TQIP) on hospital efficiency and investigate why hospitals participate in TQIP. METHODS: Our sample consists of 417 private not-for-profit hospitals in Taiwan during the 2001-2007 period. A simultaneous-equation model was performed to examine if hospitals that participated in TQIP were more efficient than hospitals that did not and investigate which variables affected the probabilities of hospitals' participation in the project. RESULTS: Our findings indicate that participating hospitals are more efficient than hospitals not participating in TQIP. In addition, hospital efficiency, hospital size, teaching status, and hospital age are positively related to participation in the project. These empirical results can be used as supporting evidence of success in improving performance through creating quality for hospitals that have participated in the project and offer insights into the value and strengths of the project. In addition, in recent years, reimbursement systems worldwide have partly moved payment methods to a pay-for-performance mechanism. In an attempt to control costs and improve quality, the policy makers should consider participating in Quality Indicator Project (QIP) as being one of the criteria to be reimbursed for performance.

Hospital ownership and performance: evidence from stroke and cardiac treatment in Taiwan.

This paper compares program expenditure and treatment quality of stroke and cardiac patients between 1997 and 2000 across hospitals of various ownership types in Taiwan. Because Taiwan implemented national health insurance in 1995, the analysis is immune from problems arising from the complex setting of the U.S. health care market, such as segmentation of insurance status or multiple payers. Because patients may select admitted hospitals based on their observed and unobserved characteristics, we employ instrument variable (IV) estimation to account for the endogeneity of ownership status. Results of IV estimation find that patients admitted to non-profit hospitals receive better quality care, either measured by 1- or 12-month mortality rates. In terms of treatment expenditure, our results indicate no difference between non-profits and for-profits index admission expenditures, and at most 10% higher long-term expenditure for patients admitted to non-profits than to for-profits.

Best practices in healthcare investing.

A recent study looked at investment performance among the nation's not-for-profit hospitals. For the year ending Dec.31, 2006, the average return on operating funds for organizations in the top decile of performance was 16.4 percent, compared with just 10.6 percent for all study participants. Asset allocation appeared to be a primary differentiating factor.

[An assessment of hospital services from the perspective of health professionals]. / Avaliação de serviços hospitalares na perspectiva dos profissionais de saúde.

This study had the objective of determining the way in which health professionals assess hospital services offered by their institutions, as well as identifying the core of social representations elaborated by those professionals regarding such institutions. A hundred and fifty-three questionnaires, applied in two hospitals (a state hospital and a charity hospital) in the metropolitan area of Natal, Rio Grande do Norte, Brazil, were analyzed. In the service assessment the Charity Hospital got the highest average score as for Service Quality. The state hospital presented the lowest average in the item "Respect for patient's privacy". The central categories were "Overpopulation" and "Humanized care" in both State and Charity hospitals, respectively. The peripheral categories were "Low wages" and "Overpopulation". Conducting an assessment is a very complex and important task. The assessment should become part of the organizational culture and guide improvements hospital care quality.

The impact of for-profit hospital status on the care and outcomes of patients with non-ST-segment elevation myocardial infarction: results from the CRUSADE Initiative.

OBJECTIVES: We sought to determine whether for-profit status influenced hospitals' care or outcomes among non-ST-segment elevation myocardial infarction (NSTEMI) patients. BACKGROUND: While for-profit hospitals potentially have financial incentives to selectively care for younger, healthier patients, perform highly reimbursed procedures, reduce costs by limiting access to expensive medications, and encourage shorter in-patient length of stay, there are limited data available to investigate these issues objectively. METHODS: Using data from the CRUSADE (Can Rapid risk stratification of Unstable angina patients Suppress ADverse outcomes with Early implementation of the American College of Cardiology/American Heart Association guidelines) Initiative, we investigated whether for-profit status influenced hospitals' patient case mix, care, or outcomes among 145,357 patients with NSTEMI treated between January 1, 2001, and December 31, 2005, at 532 U.S. hospitals. Impact of for-profit status on care and outcomes was analyzed overall and after adjustment for clinical and facility factors using regression modeling. RESULTS: Patients (n = 11,658) treated at 58 for-profit hospitals were of similar age and gender, but were more likely to be nonwhite (black, Asian, Hispanic, and other) and have health maintenance organization/private insurance, diabetes mellitus, congestive heart failure, hypertension, and renal insufficiency compared with 133,699 patients treated at 474 nonprofit hospitals. For-profit hospitals were less likely to use discharge beta-blockers, but all other treatments were similar including the use of interventional procedures (cardiac catheterization and revascularization procedures) compared with nonprofit centers. In-hospital length of stay and mortality were also similar by hospital type. CONCLUSIONS: We found no evidence that for-profit hospitals selectively treat less sick patients, provide less evidence-based care, limit in-hospital stays, or have patients with worse acute outcomes than nonprofit centers.

Baldrige interrupted. Premier and North Mississippi both took home the prestigious quality award, but their victory celebrations were shortlived.

Winning an award as prestigious as the Malcolm Baldrige Quality Award is usually excellent news. For two recent victors, however, their wins were overshadowed by questions over past business practices and possible conflicts of interest, in particular at alliance Premier. (At right, a Premier employee conducts client training).

Bronson Methodist Hospital: journey to excellence in quality and safety.

BACKGROUND: Bronson Healthcare Group, a 343-bed not-for-profit health care system serving all of southwest Michigan and northern Indiana, has as its flagship Bronson Methodist Hospital, the recipient of the 2005 Malcolm Baldrige National Quality Award. OVERALL APPROACH TO QUALITY AND SAFETY: The Baldrige criteria were used to formalize Bronson's approach to performance excellence. The strategic plan is condensed and communicated via a "Plan for Excellence" focused on three strategies: clinical excellence, customer and service excellence, and corporate effectiveness. ADDRESSING THE INSTITUTE OF MEDICINE (IOM) QUALITY AIMS: Initiatives include clinical scene investigation (a system for reporting and investigating sentinel and atypical events), a strategy for educating staff in the Situation-Background-Assessment-Recommendations (SBAR) communication technique, and mandatory influenza immunization for health care staff (safety), patient health literacy needs and a health information center (patient centeredness); methods to reduce bloodstream and ventilator-acquired pneumonia infections (effectiveness); a physician portal for access to forms, test results, and patient information (efficiency); restaurant-style pagers for patients and families while waiting (timeliness); and community outreach (equity). CHALLENGES AND LESSONS LEARNED: Bronson's journey to excellence continues with more accountability for hand-off communication and teamwork, enhancing a non-punitive environment for patient safety reporting, and further incorporating patient and family involvement.

Charitable intentions. CHA, VHA unveil community-benefit guidelines developed to help not-for-profit hospitals justify their tax exemptions.

With new guidelines from the CHA and VHA on reporting community benefits, not-for-profit hospitals are being advised to drop bad debt and Medicare shortfalls from their accounting of how they fulfill their mission. While the AHA doesn't agree, some experts do. MedPAC member Nancy Kane, right, says bad debt "is a tough one, but I don't think a lot of bad debt is a community benefit.

The new union strategy. Turning the community against you.

They're called corporate campaigns, and unlike traditional union organizing efforts, their aim is to tarnish a hospital's relationship with its community by questioning its mission, tax-exempt status and quality of care. The campaigns can be brutal and relentless, and as hospital executives from Connecticut to California will attest, they can even get personal.