Hospital Taxes, Medicaid Supplemental Payments, and State Budgets.

The federal Medicaid statute provides states an incentive to tax hospitals (even otherwise tax-exempt ones) as a means of raising revenue and then leverage federal matching funds by returning at least some of the tax back to the hospitals in the form of Medicaid supplemental payments. The potential for supplemental payments is attractive to hospitals, especially those struggling to recoup the costs of treating Medicaid and uninsured patients, and has resulted in political support from hospitals for states to create hospital "taxes" in name only-hospitals and states both end up with more money than they did when they started because of the federal match. When state officials begin to perceive, however, that nonprofit hospitals may be serving private rather than public interests, they are able to use these hospital taxes as a way to incrementally chip away at the historic governmental support provided through tax exemption by redirecting the revenue raised from the hospital tax to general fund purposes rather than Medicaid supplemental payments. This article looks at how states have been using hospital taxes and supplemental payments to balance state budgets and whether this practice is consistent with the Medicaid program objectives that make the taxes politically feasible.

Reconsidering the Affordable Care Act's Restrictions on Physician-Owned Hospitals: Analysis of CMS Data on Total Hip and Knee Arthroplasty.

BACKGROUND: Concerns about financial incentives and increased costs prompted legislation limiting the expansion of physician-owned hospitals in 2010. Supporters of physician-owned hospitals argue that they improve the value of care by improving quality and reducing costs. The purpose of the present study was to determine whether physician-owned and non-physician-owned hospitals differ in terms of costs, outcomes, and patient satisfaction in the setting of total hip arthroplasty (THA) and total knee arthroplasty (TKA). METHODS: With use of the U.S. Centers for Medicare & Medicaid Services (CMS) Inpatient Charge Data, we identified 45 physician-owned and 2,657 non-physician-owned hospitals that performed ≥11 primary TKA and THA procedures in 2014. Cost data, patient-satisfaction scores, and risk-adjusted complication and 30-day readmission scores for knee and hip arthroplasty patients were obtained from the multiyear CMS Hospital Compare database. RESULTS: Physician-owned hospitals received lower mean Medicare payments than did non-physician-owned hospitals for THA and TKA procedures ($11,106 compared with $12,699; p = 0.002). While the 30-day readmission score did not differ significantly between the 2 types of hospitals (4.48 compared with 4.62 for physician-owned and non-physician-owned, respectively; p = 0.104), physician-owned hospitals had a lower risk-adjusted complication score (2.83 compared with 3.04; p = 0.015). Physician-owned hospitals outperformed non-physician-owned hospitals in all patient-satisfaction categories, including mean linear scores for recommending the hospital (93.9 compared with 87.9; p < 0.001) and overall hospital rating (93.4 compared with 88.4; p < 0.001). When controlling for hospital demographic variables, status as a non-physician-owned hospital was an independent risk factor for being in the upper quartile of all inpatient payments for Medicare Severity-Diagnosis Related Group (MS-DRG) 470 (odds ratio, 3.317; 95% confidence interval, 1.174 to 9.371; p = 0.024), which may be because of a difference in CMS payment methodology. CONCLUSIONS: Our findings suggest that physician-owned hospitals are associated with lower mean Medicare costs, fewer complications, and higher patient satisfaction following THA and TKA than non-physician-owned hospitals. Policymakers should consider these data when debating the current moratorium on physician-owned hospital expansion. LEVEL OF EVIDENCE: Therapeutic Level III. See Instructions for Authors for a complete description of levels of evidence.

The regulation of private hospitals in Asia.

Private providers play a significant role in the provision of health services in low and middle income countries (LMICs), and the number of private hospitals is increasing rapidly. The growth of the sector has drawn attention to the many problems that are often associated with this sector and the need for effective regulation if private providers are to contribute to the effective provision of healthcare. This paper outlines three main regulatory strategies-command and control, incentives, and self-regulation, providing examples of each approach in Asia. Traditionally, command and control regulatory instruments have dominated the regulation of private hospitals in Asia; however, when deciding on which approach is most appropriate, it is important to consider the goal of the regulation, the context in which it is to be implemented, and the advantages and disadvantages of each approach. This paper concludes that regulation needs to extend beyond command and control to include a full range of mechanisms. Doing so will help address many of the challenges found within individual approaches, in addition to helping address the regulatory challenges particular to many LMICs.

Corporate governance in Czech hospitals after the transformation.

BACKGROUND: This contribution is a response to the current issue of corporate governance in hospitals in the Czech Republic, which draw a significant portion of funds from public health insurance. This not only has a significant impact on the economic efficiency of hospitals, but ultimately affects the whole system of healthcare provision in the Czech Republic. Therefore, the effectiveness of the corporate governance of hospitals might affect the fiscal stability of the health system and, indirectly, health policy for the whole country. OBJECTIVES: The main objective of this paper is to evaluate the success of the transformation in connection with the performance of corporate governance in hospitals in the Czech Republic. Specifically, there was an examination of the management differences in various types of hospitals, which differed in their ownership structure and legal form. METHODOLOGY/APPROACH: A sample of 100 hospitals was investigated in 2009, i.e., immediately after the transformation had been completed, and then three years later in 2012. With regard to the different public support of individual hospitals, the operating subsidies were removed from the economic results of the corporations in the sample. The adjusted economic results were first of all examined in relationship to the type of hospital (according to owner and legal form), and then in relation to its size, the size of the supervisory board and the education level of the senior hospital manager. A multiple median regression was used for the evaluation. FINDINGS: One of the basic findings was the fact that the hospital's legal form had no influence on economic results. Successful management in the form of adjusted economic results is only associated with the private type of facility ownership. From the perspective of our concept of corporate governance other factors were under observation: the size of the hospital, the size of the supervisory board and the medical qualifications of the senior manager had no statistically verifiable influence on the efficiency of the hospital management, though we did record certain developments as a result of the transformation process. The economic results that were reported were significantly distorted by the operating subsidies from the founder. PRACTICAL IMPLICATIONS: The results can be used immediately on several practical levels: on the macro level as part of the state's formulation of health policy, particularly in the optimization of the structure of healthcare providers, as well as for the completion of reforms in legal forms and hospital founders, and on the micro level as part of the effective administration and governance of hospitals through corporate governance regardless of the form of ownership.

Regulating the for-profit private health sector: lessons from East and Southern Africa.

International evidence shows that, if poorly regulated, the private health sector may lead to distortions in the type, quantity, distribution, quality and price of health services, as well as anti-competitive behaviour. This article provides an overview of legislation governing the for-profit private health sector in East and Southern Africa. It identifies major implementation problems and suggests strategies Ministries of Health could adopt to regulate the private sector more effectively and in line with key public health objectives. This qualitative study was based on a document review of existing legislation in the region, and seven semi-structured interviews with individuals selected purposively on the basis of their experience in policymaking and legislation. Legislation was categorized according to its objectives and the level at which it operates. A thematic content analysis was conducted on interview transcripts. Most legislation focuses on controlling the entry of health professionals and organizations into the market. Most countries have not developed adequate legislation around behaviour following entry. Generally the type and quality of services provided by private practitioners and facilities are not well-regulated or monitored. Even where there is specific health insurance regulation, provisions seldom address open enrolment, community rating and comprehensive benefit packages (except in South Africa). There is minimal control of prices. Several countries are updating and improving legislation although, in most cases, this is without the benefit of an overarching policy on the private sector, or reference to wider public health objectives. Policymakers in the East and Southern African region need to embark on a programme of action to strengthen regulatory frameworks and instruments in relation to private health care provision and insurance. They should not underestimate the power of the private health sector to undermine efforts for increased regulation. Consequently they should conduct careful stakeholder analyses and build alliances to help drive through reform.

Acute care hospitals' accountability to provincial funders.

Ontario's acute care hospitals are subject to a number of tools, including legislation and performance measurement for fiscal accountability and accountability for quality. Examination of accountability documents used in Ontario at the government, regional and acute care hospital levels reveals three trends: (a) the number of performance measures being used in the acute care hospital sector has increased significantly; (b) the focus of the health system has expanded from accountability for funding and service volumes to include accountability for quality and patient safety; and (c) the accountability requirements are misaligned at the different levels. These trends may affect the success of the accountability approach currently being used.

Regulation and oversight of independent health facilities in Canada.

Independent health facilities ("IHFs") are an important part of Canada's health care system existing at the interface of public and private care. They offer benefits to individual patients and the public at large, such as improved access to care, reduced wait times, improved choice in the delivery of care, and more efficient use of health care resources. They can also provide physicians greater autonomy, control of resources, and opportunity for profit compared to other practice settings, particularly because IHFs can deliver services outside of publicly-funded health care plans. IHFs also present challenges, particularly around quality of care and patient safety, and the potential to breach the principles of "Medicare" under the Canada Health Act. Various measures are in place to address these challenges, while still enabling the benefits IHFs can offer. IHFs are primarily regulated and overseen at the provincial level through legislation, regulations and provincial medical regulatory College by-laws. Health Canada is responsible for administering the overarching framework for "Medicare". Oversight and regulatory provisions vary across Canada, and are notably absent in the Maritime provinces and the territories. This article provides an overview of specific provisions related to IHFs across the country and how they can co-exist with the Canada Health Act.