Hospital financial performance in the recent recession and implications for institutions that remain financially weak.

The recent recession had a profound effect on all sectors of the US economy, including health care. We examined how private hospitals fared through the recession and considered how changes in their financial health may affect their ability to respond to future industry challenges. We categorized 2,971 private short-term general medical or surgical hospitals (both nonprofit and for-profit) according to their pre-recession financial health and safety-net status, and we examined their operational status changes and operating and total financial margins during 2006-11. We found that hospitals that were financially weak before the recession remained so during and after the recession. The total margins of nonprofit hospitals (both safety-net and other institutions) declined in 2008 but returned to their pre-recession levels by 2011. The recession did not create additional fiscal pressure on hospitals that were previously financially weak or in safety-net roles. However, both groups continue to have notable financial deficiencies that could limit their abilities to meet the growing demands on the industry.

Constructing a European healthcare market: the private healthcare company Capio and the strategic aspect of the drive for transparency.

This article analyses the private healthcare company Capio and its participation in the drive for transparency in the European healthcare field. An important point of departure for the paper is that technologies for transparency, such as accounting and auditing, are not neutral devices for increased openness, but carry with them programmatic dimensions that affect our norms and rules of how healthcare is to be organized and controlled. The drive for transparency engages different actors with various motives. To investigate this we carried out semi-structured interviews with 11 persons, mainly management members of Capio. We show that transparency in healthcare has been put forward by a private actor for strategic reasons. We argue that Capio's involvement in the drive for transparency should be seen as a 'second-order strategy' with the aim to create advantageous opportunities in a future European healthcare market. We show that Capio, through its propagation of various transparency technologies, has put forward programmatic ideals of industrialisation, marketisation and Europeanisation in healthcare. The main conclusion is that although Capio has engaged in the drive for transparency for business reasons, the company has also furthered certain political ideals in the field. This study contributes to the literature which problematizes the division between private and public, and between business and politics in healthcare, and is of interest to a broad health policy audience.

Does the profit motive make Jack nimble? Ownership form and the evolution of the US hospital industry.

We examine the evolving structure of the US hospital industry since 1970, focusing on how ownership form influences entry and exit behavior. We develop theoretical predictions based on the model of Lakdawalla and Philipson, in which for-profit and not-for-profit hospitals differ regarding their objectives and costs of capital. The model predicts for-profits would be quicker to enter and exit than not-for-profits in response to changing market conditions. We test this hypothesis using data for all US hospitals from 1984 to 2000. Examining annual and regional entry and exit rates, for-profit hospitals consistently have higher entry and exit rates than not-for-profits. Econometric modeling of entry and exit rates yields similar patterns. Estimates of an ordered probit model of entry indicate that entry is more responsive to demand changes for for-profit than not-for-profit hospitals. Estimates of a discrete hazard model for exit similarly indicate that negative demand shifts increase the probability of exit more for for-profits than not-for-profits. Finally, membership in a hospital chain significantly decreases the probability of exit for for-profits, but not not-for-profits.

An update on safety-net hospitals: coping with the late 1990s and early 2000s.

Recent forces have created new financial stress for hospitals but also some relief. This paper explores hospitals' changing involvement in the safety net between 1996 and 2002. We replicate approaches used in a study of 1990-1997 and thus provide a needed update on the U.S. hospital safety net. Overall, some groups of safety-net hospitals increased uncompensated care, but others did not. Non-safety-net hospitals trimmed certain services commonly used by the indigent; this may point to future reductions in access. We examine the implications of these findings for the future of the safety net.