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.

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.

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.

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.

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.

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.

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 way forward.

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

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.

The performance of the leveraged buyout of the Hospital Corporation of America, Inc.

BACKGROUND: A leveraged buyout (LBO) is a type of corporate reorganization and acquisition practice whereby private investors borrow a substantial amount of debt to acquire a firm by buying back its publicly held stock to go private. The Hospital Corporation of America, Inc. (HCA), went through its second LBO in July of 2006. A prior study on the performance changes of the first LBO found no significant changes in revenues, expenses, or profitability. PURPOSES: In this study, we evaluated the changes in performance measures for HCA hospitals during the second LBO period. We looked at the effect of the LBO on financial and operational performance indicators, controlling for market and hospital characteristics. METHODOLOGY: We identified 121 urban HCA hospitals that consistently reported data over a 4-year window from 1 year pre-LBO to 3 years post-LBO and evaluated their study performance changes during the period. Primary data for operational and financial measures are derived from Health Care Cost Report Information System data sets. FINDINGS: On the basis of this study, the LBO led to significant increases in cash flow margin, net patient revenues, and total asset turnover ratio. It also increased operating expenses significantly. However, it was not associated with changes in labor costs, staffing, and capital investment. PRACTICE IMPLICATIONS: The management of publicly traded hospitals that consider an LBO should develop operating strategies to maintain a strong cash flow performance and find ways to boost patient volume. It also needs to determine if it would be able to continue investing in its facilities to keep physicians and patients loyal and to keep investing in the training and retention of employees, which ultimately improves the quality of care and enhances operational efficiency.

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.

Hospital ownership and medical services: market mix, spillover effects, and nonprofit objectives.

Hospitals operate in markets with varied demographic, competitive, and ownership characteristics, yet research on ownership tends to examine hospitals in isolation. Here we examine three hospital ownership types -- nonprofit, for-profit, and government -- and their spillover effects. We estimate the effects of for-profit market share in two ways, on the provision of medical services and on operating margins at the three types of hospitals. We find that nonprofit hospitals' medical service provision systematically varies by market mix. We find no significant effect of market mix on the operating margins of nonprofit hospitals, but find that for-profit hospitals have higher margins in markets with more for-profits. These results fit best with theories in which hospitals maximize their own output.

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.

Variation in quality of care within health systems.

BACKGROUND: Although many hospitals belong to health care systems, little is known about the quality of care provided by those systems, or whether characteristics of health care systems are related to the quality of care patients receive. Dimensions of the quality of care provided in 73 hospital systems were examined using hospital quality data publicly reported by the Centers for Medicare & Medicaid Services (CMS). The hospital systems consisted of six or more acute care hospitals and represented 1,510 hospitals. The study was designed to determine whether these dimensions of system quality could be reliably measured, to describe how systems varied with respect to quality of care, and to explore system characteristics potentially related to care quality. METHODS: Data were made available by CMS for 19 indicators of care quality for pneumonia, surgical infection prevention, acute myocardial infarction (AMI), and congestive heart failure. RESULTS: At the system level, reliable measures (alphas > .70) were constructed for each of the four clinical areas, and these measures were combined into a single measure of quality (alpha = .85). Variability in system quality was substantial, ranging from 94% to 70% on the combined quality measure. On the clinical area measures, the smallest range was for AMI (99%-85%), whereas the largest was for surgical infection prevention (95%-54%). System ownership and system centralization were significant predictors of quality, accounting for 30% of variance in the combined quality measure. Geographic region, inclusion of teaching hospitals, and system size were unrelated to quality. DISCUSSION: Systems vary greatly in terms of quality of care in each of the four clinical areas, with for-profit and more decentralized systems appreciably lower in quality of care. System-level quality measures and data could be used to compare processes within systems and to drive improvement efforts.

Implementing the clinical nurse leader role in a for-profit environment: a case study.

The Clinical Nurse Leader project marks the first time in 35 years that nursing has introduced a new role to the profession. The project has evolved to include partnerships between more than 90 universities and 190 clinical sites. The authors present a case study of how a for-profit medical center created a sense of urgency for change, built a business case, and redesigned professional nursing practice to implement the Clinical Nurse Leader role.

LIFENET hospitals (India): developing new services' case study.

PURPOSE: Indian healthcare is in the process of offering a plethora of services to customers hailing largely from India and from neighboring countries. The Indian hospital sector consists of private "nursing homes" and government and charitable missionary hospitals. Government and missionary hospitals determine their charges according to patients' income levels and treat poor patients freely. Nursing homes charged higher, market-determined rates. They offer services in just a few medical specialties, owned and operated by physicians who worked with them. Nursing homes cannot afford the latest medical technology, but they provide more intimate settings than government hospitals. This case study aims to demonstrate the various strategic options available to a for-profit hospital, in an emerging economy with a burgeoning middle-class population and how it can choose which services that it can best offer to its target population. DESIGN/METHODOLOGY/APPROACH: Diagnosing and treating complex ailments in nursing homes could be a time-consuming and expensive proposition as visits to several nursing homes with different specialties may be necessary. This paper demonstrates how an hospital can develop new customer-oriented services and eliminate the hassle for patients needing to run around different healthcare outlets even for minor ailments. FINDINGS: The paper finds that large government hospitals generally have better facilities than nursing homes, but they were widely believed to provide poor-quality care. They failed to keep up with advanced equipment, train their technicians adequately and did not publicize their capabilities to doctors who might refer patients. Many missionary and charitable hospitals were undercapitalized and did not offer all services. These conditions left an unsatisfied demand for high-quality medical care. In 1983, LIFENET opened in Madras, becoming the first comprehensive, for-profit hospital in India. LIFENET, invested in a cardiology laboratory and clinics with capacity to diagnose heart and lung ailments, which grew through referrals it received from other doctors. ORIGINALITY/VALUE: Out of promoters' shared vision and the persistence to overcome financial and regulatory hurdles, LIFENET turned into a super specialty hospital. In early 2004, LIFENET promoters considered several options for expansion. In addition to building more hospitals, they considered licensing the brand name and establishing India's first health maintenance organization.

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.