Hospital Finances and Patient Safety Outcomes

Abstract

Hospitals recently have experienced greater financial pressures. Whether these financial pressures have led to more patient safety problems is unknown. Using the Healthcare Cost and Utilization Project (HCUP) State Inpatient Data for Florida from 1996 to 2000, this study examines whether financial pressure at hospitals is associated with increases in the rate of patient safety events (e.g., medical errors) for major surgeries. Findings show that patients have significantly higher odds of having adverse patient safety events (nursing-related patient safety events, surgery-related patient safety events, and all likely preventable patient safety events) when hospital profit margins decline over time. The finding that a within-hospital erosion of hospital operating profits increases the rate of adverse patient safety events suggests that any cost-cutting efforts be carefully designed and managed.

The Association Between Hospital Margins, Quality of Care, and Closure or Other Change in Operating Status

“…There have been few prior studies of the relationship between hospital margins and quality of care. Both Encinosa and Bernard 4 and Bazzoli et al 5 studied the effect of hospital margin on patient safety, but they reached contrary results. Encinosa and Bernard examined hospitals in Florida and found an association between lower margin and more frequent patient safety events, while Bazzoli et al studied hospitals in eleven states and found no impact.…”

“…We used hospital operating margin because it is the most commonly used measure of hospital financial performance, 4,5 but we repeated our analyses for total margin and present these results in the Appendix (available online). Consistent with prior literature, we defined operating margin as net revenues from patient care and other operations (such as pharmacy, meal service, and parking lot receipts) minus total operating expenses divided by net revenues from patient care and other operations.…”

“…Prior studies that have examined this association have either focused on patient safety or quality of care for a single condition (acute myocardial infarction). [4][5][6] Data on margins and hospital closure are similarly lacking: we are aware of only two prior studies and they focused on patterns of care in the 1980s. 7,8 In this study, we used national data on inpatient care to answer four questions.…”

Impact of Community Wealth on Use of Cardiac-Resynchronization Therapy With Defibrillators for Heart Failure Patients

“…[26][27][28] We hypothesized that hospitals with higher profitability would have more funds available to expand service offerings such as the provision of CRT-D. We tested this hypothesis using Medicare Cost Report data to construct a broad measure of each hospital's operating margin. However, the 3-year trailing profitability average was not predictive of CRT-D receipt in our models either independently or in the final multilevel model.…”

The Impact of Accelerating Electronic Prescribing on Hospitals' Productivity Levels: Can Health Information Technology Bend the Curve?

“…As such, there could be different impacts due to the type of system, as well as the type of hospital employing that system. Lastly, we did not account for the relationship to patient safety and quality of care, which is the other, overarching aim for promoting CPOE use (Encinosa and Bernard 2005). Future work could investigate these limitations.…”