Hospital Organizational Change and Financial Status: Costs and Outcomes of Care in Philadelphia

Abstract

Two recent changes in Philadelphia-area hospital organizations are consolidation into systems and acquisition of 2 medical school hospitals by a for-profit chain. This study explored whether such consolidation and conversion affected costs and outcomes of care. The analysis included 1,617,581 discharges from 49 acute-care hospitals from 1997 to 1999. Analyses within and between medical school hospitals examined trends in discharges, case mix, length of stay, and mortality. The study addressed 2 questions: whether, as hospitals consolidate into medical school hospital-based systems, volume, severity, length of stay, and mortality increase in those hospitals; and whether for-profit conversion redistributes complex, high-cost admissions to nonprofit hospitals. The 2 medical school hospitals that became for-profit experienced decreases in volume and resource intensity, coupled at one with an increase in severity. However, these patterns were produced more by the system's financial instability than by consolidation or conversion.