Does Hospital Status Affect Performance?

Abstract

This article investigates the impact of hospital profit status on quality of care as measured by risk-adjusted, 30-day, inpatient readmission rates gathered by the Centers for Medicare and Medicaid Services. It also evaluates the association between inpatient readmission rates and market concentration, measured by the Herfindahl–Hirschman Index, and various hospital characteristics. It concludes that nonprofit (NP) hospitals have a statistically significant negative association with readmission rates because they can focus on their mission without intense pressure to make a profit. We find no significant association between quality of care and hospital market competitiveness nor any statistically significant evidence to reject the exogeneity assumption of NP status.

Assessing the Quality of Public Services: Does Hospital Competition Crowd Out the For-Profit Quality Gap?

“…A multi-hospital system is two or more hospitals owned, leased, sponsored, or contract managed by a central organization (AHA, 2019). level, we find a sizable quality gap between for-profit and other types of hospitals, echoing extant research (see, among many others, Aswani et al, 2018;Herrin et al, 2015;Jindal et al, 2018;Paul, Quosigk and MacDonald, 2019). This for-profit quality gap is consistent with a hypothesis that hospitals face di↵erent trade-o↵s between service provision and increases in penalty risk.…”

“…Much of the literature which has empirically examined the relationship between market structure and hospital quality has drawn on this, arguing that when modeling the relationship between hospital behavior and market structure, it can be assumed that non-profits behave as for-profits (recent examples include Chandra et al, 2016;Zhang et al, 2016). Yet, so far the literature has found mixed results (Baltagi and Yen, 2014;Colla et al, 2016;Cooper, Gibbons and Skellern, 2018;Dranove and Satterthwaite, 2000;McClellan and Staiger, 2000;Paul, Quosigk and MacDonald, 2019;Picone, Chou and Sloan, 2002). 2 By utilizing a heavily publicized quality metric we are able to document whether such complementarities between ownership and competitive pressure exists.…”

Relative Productivity of For-Profit Hospitals: A Big or a Little Deal?

“…Studies of readmission using IVs also yield no significant differences by ownership (Ettner & Hermann, 2001; Paul et al 2020). L.…”

Is there an association between hospital staffing levels and inpatient-COVID-19 mortality rates?

“…Some scholars have argued that ownership does not result in a meaningful difference between hospitals [ 50 ]. Quality is not influenced by ownership but rather by institutional context, market conditions, services provided by the hospital and other factors [ 51 , 52 ] To provide more insights into hospital ownership and performance, a study focused on comparing the performance of hospitals before and after they converted from NFP to FP ownership [ 53 ]. Converted hospitals reported better financial performance after changing their ownership to FP; however, no significant change occurred in quality and patient outcomes [ 53 ].…”