Does community-governed nonprofit primary care improve access to services? Cross-sectional survey of practice characteristics.

This study compared community-governed nonprofit and for-profit primary care practices in New Zealand to test two hypotheses: (1) nonprofits reduce financial and cultural barriers to access; and (2) nonprofits do not differ from for-profits in equipment, services, service planning, and quality management. Data were obtained from a nationally representative cross-sectional survey of GPs. Practices were categorized by ownership status: private community-governed nonprofit or private for-profit. Community-governed nonprofits charged lower patient fees per visit and employed more Maori and Pacific Island staff, thus reducing financial and cultural barriers to access compared with for-profits. Nonprofits provided a different range of services and were less likely to have specific items of equipment; they were more likely to have written policies on quality management, complaints, and critical events, and to carry out locality service planning and community needs assessments. The findings support the shift to nonprofit community governance occurring in New Zealand and elsewhere.     

Hospital governing boards: a study of their effectiveness in relation to organizational performance

This article describes the development and evolution of governing boards and summarizes critical findings from a research study on hospital governing boards. The purpose of the research was to examine factors that measure performance of governing boards and the relationship of governing board effectiveness to the organizational performance of hospitals. Board leaders from 64 nonprofit hospitals across the country were surveyed using the BSAQ tool, which measures board effectiveness in six areas of competency. Board competency scores of this group were compared with those of a previous group, which consisted of more than 300 nonprofit boards, and demonstrated significantly higher scores. A factor analysis conducted to compare the six competency factors between study groups revealed a strong single factor in this study. The factors that measure governing board performance were found to be consolidated into one single factor of collaborative board functioning consistent with emerging governance theory. This may support the concept of the importance of governing boards as collaborative, socially dynamic networks of leaders. The hospital performance was assessed using data from the nationally recognized program, Solucient's 100 Top Hospitals. The results demonstrate that higher performing boards did have better hospital performance in several dimensions, most notably in profitability and lower expenses. Lower expenses were related to higher scores for the BSAQ total score. Hospital profitability was positively correlated with all seven BSAQ scores. A more favorable Solucient ranking was related to hospitals that had a lower BSAQ political score. This was also found in a multiple regression model that predicted a favorable ranking when the BSAQ political score was lower. This may mean that these boards do what needs to be done to maintain excellent performance and do not let politics get in the way of their work. Although governance and its effect on hospital performance is a complex concept to study, this investigation yields findings of interest to leaders in the healthcare field.     

The association of hospital governance with innovation in Taiwan

Hospitals in Taiwan are facing major changes and innovation is increasingly becoming a critical factor for remaining competitive. One determinant that can have a significant impact on innovation is hospital governance. However, there is limited prior research on the relationship between hospital governance and innovation. The purpose of this study is to propose a conceptual framework to hypothesize the relationship between governance mechanisms and innovation and to empirically test the hypotheses in hospital organizations. We examine the relationship between governance mechanisms and innovation using data on 102 hospitals in Taiwan from the Taiwan Joint Commission on Hospital Accreditation and Quality Improvement. We model governance mechanisms using board structure, information transparency and strategic decision‐making processes. For our modeling and data analysis we use measurement and structural models. We find that in hospital governance, information transparency and strategic decision making did impact innovation. However, governance structure did not. To facilitate innovation, hospital boards can increase information transparency and improve the decision‐making process when considering strategic investments in innovative initiatives. To remain competitive, hospital boards need to develop and monitor indices that measure hospital innovation to ensure ongoing progress.     

Profit-seeking, corporate control, and the trustworthiness of health care organizations: assessments of health plan performance by their affiliated physicians

OBJECTIVE: To compare the relative trustworthiness of nonprofit and for-profit health plans, using physician assessments to measure dimensions of plan performance that are difficult for consumers to evaluate. DATA SOURCE: A nationally representative sample of 1,621 physicians who responded to a special topics module of the 1998 Socioeconomic Monitoring System Survey (SMS), fielded by the American Medical Association. Physicians assessed various aspects of their primary managed care plan, defined as the plan in which they had the largest number of patients. STUDY DESIGN: Plan ownership was measured as the interaction of tax-exempt status (nonprofit versus for-profit) and corporate control (single state versus multistate health plans). Two sets of regression models are estimated. The dependent variables in the regressions are five measures of performance related to plan trustworthiness: two related to deceptive practices and three to dimensions of quality that are largely hidden from enrollees. The first set (baseline) models relate plan ownership to trustworthy practices, controlling for other characteristics of the plan, the marketplace for health insurance, and the physician respondents. The second (interactive) set of models examines how the magnitude of ownership-related differences in trustworthiness varies with the market share of nonprofit plans in each community. DATA COLLECTION: The 1998 SMS was fielded between April and September of 1998 by Westat Inc. The average time required for a completed interview was approximately 30 minutes. The overall response rate was 52.2 percent. PRINCIPAL FINDINGS: Compared with more local nonprofit plans, for-profit plans affiliated with multistate corporations are consistently reported by their affiliated physicians to engage in practices associated with reduced trustworthiness. Nonprofit plans affiliated with multistate corporations have more physician-reported practices associated with trustworthiness than do for-profit corporate plans on four of five outcomes, but appear less trustworthy than locally controlled nonprofits on two of the five measures. The magnitude of these ownership-related differences declines as the market share of nonprofit plans rises: for two of the five measures, ownership-related differences in practices related to trustworthiness are entirely eliminated when the nonprofits enroll more than 30 percent of the local market. CONCLUSIONS: The combination of for-profit ownership and multistate corporate control appears to consistently and substantially reduce physician-reported measures related to the trustworthiness of health plans. Because this is the fastest growing form of managed care, these results raise concerns about further erosion of trust in American health care. Preserving a substantial market niche for nonprofit plans appears to reduce this erosion and should be considered by policymakers as a strategy for restoring trust in the health care system.     

An evaluation of charity care for tax-exempt hospitals engaging in joint ventures

The study examines whether the level of charity care and financial stability contribute to a nonprofit hospital's motivation for partnering with a for-profit hospital through a joint venture. The Internal Revenue Service (IRS) has heightened its scrutiny of joint ventures within the health care sector. Considering recent calls to investigate the merit of the tax-exempt status of hospitals engaged in joint ventures, this research will assist policy makers in the evaluation of nonprofit hospitals. Constituents will continue to question whether joint ventures contribute to a reduced focus on charitable activities. Results indicate that the propensity to engage in a joint venture significantly increases with increased levels of charity care. Furthermore, nonprofit hospitals with lower profitability are more likely to engage in joint ventures. These results are useful to policy makers when evaluating the level of charity care provided by hospitals seeking alternative strategic alliances. Considering many critics allege hospitals are reducing the provision of charity care to the community, it is imperative for management to be conscious of the impact of joint ventures on the provision of charity care.     

The consumer welfare implications of the hospital ownership mix in the US: an exploratory study

This paper offers an empirical test concerning how hospital ownership mix affects consumer welfare in the US. The test compares the market benefits and costs resulting from an increased presence of nonprofit hospitals by observing empirically how the nonprofit market share impacts hospital care utilization at the margin. The empirical results suggest that too many not-for-profit and public hospitals exist in the inpatient care segment of the typical hospital services industry of the US. In contrast, the empirical findings indicate that too many for-profit hospitals operate in the outpatient care portion of the hospital services industry. The policy implication is that more quality of care per dollar might be obtained by promoting increased for-profit activity to inpatient care and more nonprofit activity to outpatient care in some market areas. This conclusion, however, is tempered with several caveats. We discuss these and also make recommendations for further research.     

Protecting the public interest: the role of the state attorney general in regulating hospital conversions

Increasingly, nonprofit hospital have been responding to market pressures by giving up their tax exemption and selling hospital assets to for-profit corporations. In 1995 alone, fifty-nine nonprofit hospital completed full-asset sales or joint ventures. Hospital managers and board members should understand the legal and regulatory environment surrounding hospital conversions. State attorneys general are taking a more active regulatory role. This discussion describes the application of laws governing charitable trusts and nonprofit corporations to hospital conversions, as well as the central role of the attorney general in the enforcement of such laws. The 1996 Michigan circuit court ruling in Kelley v. MAHSI provides an insightful case study, illustrating a strict application of the law to a joint-venture hospital conversion. The implications of this case will be discussed along with the larger implications of more aggressive state regulation of hospital conversions.     

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.     

Long-Term Care Facility Ownership and Acute Hospital Service Use in British Columbia,Canada: A Retrospective Cohort Study

ObjectivePrevious studies report higher hospitalization rates in for-profit compared with nonprofit long-term care facilities (LTCFs), but have not included staffing data, a major potential confounder. Our objective was to examine the effect of ownership on hospital admission rates, after adjusting for facility staffing levels and other facility and resident characteristics, in a large Canadian province (British Columbia).DesignRetrospective cohort study.Setting and ParticipantsOur cohort included individuals resident in a publicly funded LTCF in British Columbia at any time between April 1, 2012 and March 31, 2016.MeasuresHealth administrative data were extracted from multiple databases, including continuing care, hospital discharge, and Minimum Data Set (MDS 2.0) assessment records. Cox extended hazards regression was used to estimate hospitalization risk associated with facility- and resident-level factors.ResultsThe cohort included 49,799 residents in 304 LTCF facilities (116 publicly owned and operated, 99 for-profit, and 89 nonprofit) over the study period. Hospitalization risk was higher for residents in for-profit (adjusted hazard ratio [adjHR] 1.34; 95% confidence interval [CI] 1.29–1.38) and nonprofit (adjHR 1.37; 95% CI 1.32–1.41) facilities compared with publicly owned and operated facilities, after adjustment for staffing, facility size, urban location, resident demographics, and case mix. Within subtypes, risk was highest in single-site facilities: for-profit (adjHR 1.42; 95% CI 1.36–1.48) and nonprofit (adjHR 1.38, 95% CI 1.33–1.44).Conclusions and ImplicationsThis is the first Canadian study using linked health data from hospital discharge records, MDS 2.0, facility staffing, and ownership records to examine the adjusted effect of facility ownership characteristics on hospital use of LTCF residents. We found significantly lower adjHRs for hospital admission in publicly owned facilities compared with both for-profit and nonprofit facilities. Our finding that publicly owned facilities have lower hospital admission rates compared with for-profit and nonprofit facilities can help inform decision-makers faced with the challenge of optimizing care models in both nursing homes and hospitals as they build capacity to care for aging populations.     

The convergence between for-profit and nonprofit hospitals in the United States

This paper proposes a novel model of the hospital industry in the United States in which firms in effect choose their ownership type and the regulatory and tax regimes under which they must function. Accordingly, I develop a model in which firms have identical objectives but differ in their ability to benefit from a given ownership form. Changes in the economic environment alter firms’ incentives to maintain a given ownership type. This in turn induces firms to modify their capacity and encourages some firms to switch ownership type. One implication of this model is that changes in the economic environment that have occurred since 1960 imply that the optimal size of those firms which choose to be for profit should more closely approximate the optimal size of firms which choose to be nonprofit. Hospital level data indicate that this size convergence has indeed occurred. In 1960, U.S. nonprofit hospitals maintained on average more than three times as many beds per hospital as their for-profit counterparts; following a monotonic decline in relative size, by 2000, the average nonprofit hospital was only 32% larger than the typical for-profit hospital. Declining roles of government hospitals, population growth, suburbanization, and increasing government intervention in the healthcare market help explain the convergence in size. Analysis of data at the state and Metropolitan Statistical Area (MSA) levels is consistent with the principal theoretical predictions.     

Balancing incentives in the compensation contracts of nonprofit hospital CEOs.

Given the considerable insight into corporate governance achieved through studies of executive compensation in proprietary firms it is surprising that executive contracting in nonprofit organizations remains largely unexplored. In this paper, we use the multitask principal agent model of Holmstr?m and Milgrom [The Journal of Law, Economics and Organization 7 (1991) (Suppl.) 24] to argue that nonprofit hospitals represent an optimal response to information asymmetries between managers and boards. For a board with multidimensional objectives, the agency problem is getting top executives to distribute their efforts across all dimensions of the hospital's mission. The nonprofit form is preferred because the absence of high powered incentives such as share ownership reduces executives' incentives to place undue emphasis on improving financial performance at the expense of important but less observable tasks. Using newly available compensation data we test the model by comparing the conditional distributions of earnings for industrial and nonprofit hospital CEOs in Ontario. Our best estimates are that CEOs in publicly traded firms earn twice as much on average as those in similarly sized nonprofit hospitals but bear roughly eight times the income variance. Estimates of the associated degree of risk aversion are well within conventional bounds and are consistent with the trade-off between insurance and incentives predicted by the theory.     

Insiders and business directors on hospital boards and strategic change

Many hospitals are eager to incorporate practices of boards in business organizations. Yet little evidence exists on the desirability of "corporate" board features in hospital settings. We examined the effects of two characteristics of corporate boards--the relative dominance of insiders and of directors with business-related occupations on strategic changes within hospitals. We studied 335 hospitals in California immediately following legislative reforms in 1982. We found that hospital boards with a higher proportion of insiders and business directors made more changes in their mix of services in response to legislative reform. In addition, this relationship held for nonproprietary hospitals but not for proprietary hospitals. Limitations and implications of the results are discussed.     

Hospital audit committees: a comparative analysis of structural and functional characteristics

In an effort to counteract rising costs and financial problems, many hospitals have adopted certain management practices that are followed by commercial corporations. In particular, the boards of directors for many hospitals have created audit committees to enhance organizational governance in the areas of internal control, accounting, auditing, and financial reporting. The formative stages in which most hospital audit committees currently exist creates a need for shared information. Such information can serve as a potential source of guidance for the further development of existing hospital audit committees, as well as for boards that are near the point of establishing an audit committee for the first time. The purpose of this study is to present an analysis of the structure, responsibilities, and activities of hospital audit committees. Data for the analysis was obtained through a questionnaire survey of 400 hospitals. The analysis of structural and functional differences affords a basis for suggesting several specific ways in which hospitals can improve their organizational governance through a more effective audit committee.     

A Market, Operation, and Mission Assessment of Large Rural For-Profit Hospitals With Positive Cash Flow

CONTEXT: National benchmark data for 2002 indicate that large rural for-profit hospitals have a median cash flow margin of 19.5% compared to 9.2% for their nonprofit counterparts. PURPOSE: This study aims to gain insight regarding the driving factors behind the high cash flow performance of large rural for-profit hospitals. METHODS: Using 3 annual periods of Centers for Medicare and Medicaid cost report data with the last fiscal year ending between September 30, 2002, and August 30, 2003, the study found a cash flow margin of 21.5% for the large rural for-profit hospitals. All these facilities were owned by hospital management companies. To assess their underlying market, operational, and mission factors, these hospitals were compared to a similar comparison group of large rural nonprofit hospitals that are system owned and have positive cash flows. FINDINGS: Using logistic regression analysis, the study found lower operating expense per adjusted discharge and salary expense as a percentage of total operating expense among large rural for-profit, system-owned hospitals with positive cash flows relative to nonprofits with similar traits. CONCLUSION: Overall, the findings of this study reflect how these for-profit hospitals, which are owned by hospital management companies, focus on controlling their labor costs as well as operating costs per discharge in order to achieve a greater positive cash flow position.     

The WAMI Rural Hospital Project. Part 3: Building health care leadership in rural communities.

The WAMI Rural Hospital Project (RHP) intervention combined aspects of community development, strategic planning and organizational development to address the leadership issues in six Northwest rural hospitals. Hospitals and physicians, other community health care providers and local townspeople were involved in this intervention, which was accomplished in three phases. In the first phase, extensive information about organizational effectiveness was collected at each site. Phase two consisted of 30 hours of education for the physician, board, and hospital administrator community representatives covering management, hospital board governance, and scope of service planning. In the third phase, each community worked with a facilitator to complete a strategic plan and to resolve conflicts addressed in the management analyses. The results of the evaluation demonstrated that the greatest change noted among RHP hospitals was improvement in the effectiveness of their governing boards. All boards adopted some or all of the project's model governance plan and had successfully completed considerable portions of their strategic plans by 1989. Teamwork among the management triad (hospital, board, and medical staff) was also substantially improved. Other improvements included the development of marketing plans for the three hospitals that did not initially have them and more effective use of outside consultants. The project had less impact on improving the functioning of the medical chief of staff, although this was not a primary target of the intervention. There was also relatively less community interest in joining regional health care associations. The authors conclude that an intervention program tailored to address specific community needs and clearly identified leadership deficiencies can have a positive effect on rural health care systems.     

Cost of capital, target rate of return, and investment decision making.

Recent attempts to develop an investment decision criterion for nonprofit hospitals that follows that for-profit criteria have resulted in little agreement. Terminological considerations are much to blame for this lack of consensus among researchers in the field. Attempts have been made to identify a "cost of capital" for nonprofit institutions, and to employ this concept in a manner similar to the way it is employed in a for-profit setting. In fact, the application of this concept to nonprofit institutions has resulted in confusion. The use of "target rate of return" in its place would orient the debate more properly toward institutional ends and the means required to achieve them.     

深圳市公立医院法人治理改革探索

分析了目前公立医院体制机制方面存在的问题,按照"政事分开、管办分开、医药分开、营利性与非营利性分开"的改革原则,制定了公立医院法人治理改革实施路径.一是建立公立医院管理委员会,统筹政府办医保障职能;建立公立医院管理机构,提高举办医院的行政管理水平;转变卫生行政部门职能,形成多元化办医格局.二是建立分级决策机制、自主经营制度及多元监管制度,解决政事分开问题.三是研究制定公立医院章程,促进公立医院向法定机构转变,通过法制化巩固法人治理改革成果.

Abstract：

Analysis of setbacks found in the existing system and mechanism of public hospitals. Based on the health reform principles of "Separation of administration and management, Separation of administration and operation, Separation of prescribing and dispensing, and Separation of for-profit hospitals and nonprofit hospitals", the authors named the following roadmap for public hospital governance reform. First, set up a management committee for each public hospital to coordinate the government function for medical service; set up a public hospital authority to upgrade the management level of these hospitals; transform functionality of health authorities to encourage diversity in medical service providers. Second, establish the tiered decision making mechanism, autonomous operation system and diversified supervision system, to separate administration and management. Third, formulate articles of association for hospitals to encourage their evolution to legal entities, consolidating the government reforms by legal means.     

Thinking of boards as families

As hospitals forge new strategic partnerships, the question of "what to do about the board" is always prominent. But before hospital boards can look at governance roles, composition, and structure in integrated mechanisms, many need to take a hard look at themselves, writes long-time board observer John Witt. In this perspective, he argues that many boards act like dysfunctional families: They appear normal and even successful until a crisis occurs to reveal underlying malfunctions. Both families and boards can help themselves by working on who they function as a group, he says.     

Social work in teaching hospitals and expansion of for-profit health corporations

The possibility of sale of a 175-year-old nonprofit hospital to a for-profit corporation raised questions and concerns about the future of teaching and training programs at the institution. With the many challenges facing social workers in both the nonprofit and for-profit hospitals, especially the pressures for early discharge planning and developing income producing services, social work teaching and learning opportunities in hospitals may be drastically curtailed. The author enjoins social workers to maintain social work's values and ethics as they continue the roles of administrator, clinician, teacher, learner, researcher, and, most important, advocate for social policy and change.     

Who is enrolled in for-profit vs. nonprofit Medicare HMOs?

We compare the characteristics of enrollees in for-profit and nonprofit Medicare health plans using nationwide data from the 1996 Medicare Current Beneficiary Survey. We find few differences in overall health status, limitations in activities of daily living (ADLs), or history of chronic disease. However, older Americans enrolled in for-profit plans are substantially poorer and less educated than those enrolled in nonprofit plans, are more likely to have joined their plan recently, and are more likely to have joined a plan with the expectation of reducing their out-of-pocket health care costs.