Managing competition in the countryside: Non-profit and for-profit perceptions of long-term care in rural Ontario

This paper contributes to the current debates surrounding private delivery of health care services by addressing the distinctive challenges, constraints and opportunities facing for-profit and non-profit providers of long-term care in rural and small town settings. It focuses on the empirical case of Ontario, Canada where extensive restructuring of long-term care, under the rubric of managed competition, has been underway since the mid-1990s. In-depth interviews with 72 representatives from local governments, public health institutions and authorities, for-profit and non-profit organisations, and community groups during July 2003 to December 2003 form the platform for a qualitative analysis of the implications of managed competition as it relates to the provision of long-term care in the countryside. The results suggest that the introduction and implementation of managed competition has accentuated the problems of service provision in rural communities, and that the long-standing issues of caregiving in rural situations transcend the differences, perceived or otherwise, between for-profit and non-profit provision. Understanding the implications of market-oriented long-term care restructuring initiatives for providers, and their clients, in rural situations requires a re-focussing of research beyond the for- versus non-profit dichotomy.     

For-profit status and industry evolution in health care markets: evidence from the dialysis industry

This paper examines why for-profit dialysis providers have displaced non-profit providers over the last 25 years. Using detailed data on individual markets’ evolutions, I find that for-profit facilities were quicker to enter growing markets and slower to exit declining ones than non-profit facilities. Moreover, for-profit providers’ presence in a market had a larger impact on the exit and entry behavior of competitors. These results suggest that for-profit dialysis providers have an advantage in static competition relative to non-profit providers, and that this—rather than lower entry costs—explains their increasing prominence. Additional empirical analyses indicate that for-profits’ advantage cannot solely be attributed to efficiencies related to membership in a large, multi-facility chain. This further suggests that managerial incentives have had an economically significant impact on long-run market structure in this industry.     

Public health care providers and market competition: the case of Finnish occupational health services

Background  

As reforms in publicly funded health systems rely heavily on competition, it is important to know if and how public providers react to competition. In many European countries, it is empirically difficult to study public providers in different markets, but in Finnish occupational health services, both public and private for-profit and non-profit providers co-exist. We studied possible differences in public providers’ performance (price, intensity of services, service mix—curative medical services/prevention, productivity and revenues) according to the competitiveness of the market.     

Profits in medicine: a context and an accounting.

The U.S. health care industry is composed of a dynamic mixture of profit and non-profit entities. These sectors sometimes compete in the same activities and may have virtual monopolies over other activities. Estimates of the relative and absolute sizes and growth trends of the profit and non-profit sectors are developed in this article. These estimates show that approximately 39 percent of total health care expenditures in the U.S. in 1975 went to for-profit institutions, generating $3.3 billion in profit. This represented 7 percent of for-profit and 2.8 percent of total expenditures. Some for-profit subsectors grew more rapidly and others less rapidly than total health care expenditures. As a whole, the for-profit sector grew faster than the non-profit sector before and after Medicare and Medicaid were introduced as well as during the period when price controls were in effect. The relative growth of the for-profit sector was greatest right after the introduction of Medicare and Medicaid. The true significance of profit lies not in numbers, but in the effects that the drive for profit have on the nature and quality of health and health care. This is discussed in the final section.     

Profit and Non-Profit Home Health Care Agency Outcomes

The home health care industry, traditionally an industry of non-profit organizations, has increasingly become, as has the rest of the health care industry, invaded by for-profit organizations. The impetus for this invasion was the Omnibus Reconciliation Act (OBRA) of 1980 which encouraged previously restricted for-profit organizations to participate in the Medicare and Medicaid home health care program. Following enactment of OBRA, the number of for-profit organizations grew rapidly and the advantages and disadvantages of their presence in the market has been widely debated. The purpose of this study was to describe differences in behaviors and industry outcomes generated by non-profit and for-profit organizations in Massachusetts. Data for the study was from the Massachusetts State Department of Public Hcalth's Annual Reports of Home Health Agencies. Results suggest that while profit and non-profit agencies behave similarly in many areas, there are areas of difference, with significant differences found in the amount of service delivered and the rates charged.     

Profit and non-profit home health care agency outcomes: a study of one state's experience

The home health care industry, traditionally an industry of non-profit organizations, has increasingly become, as has the rest of the health care industry, invaded by for-profit organizations. The impetus for this invasion was the Omnibus Reconciliation Act (OBRA) of 1980 which encouraged previously restricted for-profit organizations to participate in the Medicare and Medicaid home health care program. Following enactment of OBRA, the number of for-profit organizations grew rapidly and the advantages and disadvantages of their presence in the market has been widely debated. The purpose of this study was to describe differences in behaviors and industry outcomes generated by non-profit and for-profit organizations in Massachusetts. Data for the study was from the Massachusetts State Department of Public Health's Annual Reports of Home Health Agencies. Results suggest that while profit and non-profit agencies behave similarly in many areas, there are areas of difference, with significant differences found in the amount of service delivered and the rates charged.     

Uncompensated Hospital Care: Charitable Mission or Profitable Business Decision?

Provision of hospital uncompensated care is generally assumed to be adversely affected as increased healthcare competition decreases demand for compensated hospital services. Economic theory, however, suggests the question is more complex. Non-profit hospitals are assumed in this paper to maximize utility as a function of uncompensated care, subject to the constraint that revenues cover costs. For-profit hospitals, in contrast, are assumed to maximize profit while recognizing that failure to meet community expectations regarding provision of uncompensated care could negatively impact profits. Therefore, for-profit hospital supply of uncompensated care focuses on balancing the hospital's marginal costs and marginal benefits. These models predict that non-profit hospitals will respond to increased competition by reducing the supply of uncompensated care. In contrast, for-profit hospitals will increase the supply of uncompensated care when market demand decreases since the concurrent decrease in compensated care reduces the marginal cost of producing uncompensated care. The models also predict that for-profit hospitals will respond to changes in community expectations regarding the provision of uncompensated care. © 1997 by John Wiley & Sons, Ltd.     

Public, private and voluntary residential mental health care: is there a cost difference?

OBJECTIVES: To determine how public (NHS or local government), private (for-profit) and voluntary (non-profit) providers of residential mental health care compare. Do they support different clienteles? And do their services cost different amounts? METHODS: Based on a cross-sectional survey of residential care facilities and their residents in eight English and Welsh localities, the characteristics and costs of care in the different sectors (NHS, local government, private, voluntary) were compared. Variations in cost were examined in relation to residents' characteristics using multiple regression analyses, which also allowed standardisation of results before making inter-sectoral comparisons. RESULTS: Private and voluntary providers of residential care support different clienteles from the public sector. The patterns of inter-sectoral cost differences vary between London and non-London localities. In London, voluntary sector facilities may be more cost-efficient than the other sectors, but local government/private sector comparisons show no consistent difference. Outside London, the results suggest clear cost advantages for the private and voluntary sectors over the local government sector. CONCLUSIONS: Private and voluntary providers may have some economic advantages over their public counterparts. However, outcomes for residents were not studied, leaving unanswered the question of comparative cost-effectiveness.     

Market share of the for-profit and not-for-profit sector from health insurance expenditures

AIM: The aim of the study is to analyze the market share of for-profit private and not-for-profit sector from the expenditures on medical services of the Hungarian National Health Insurance Fund (NHIF), to show its changes in the last years and to show on which field they can be found. DATA AND METHODS: The data derives from the financial database of the National Health Insurance Fund (NHIF) covering the period 1995-2002. The analysis includes the medical provisions (primary care, health visitors, dental care, out- and inpatient care, home care, kidney dialysis, CT-MRI). RESULTS: In 1995 only 6.91% (12.5 billions Ft) of total expenditure for medical services went to for-profit private providers. By 2002 the market share of private providers increased to 15.95% (78.5 billions Ft). During the same period we realized a dynamic increase in the market share of non-profit sector: from 1.04% in 1995 to 2.58% in 2002. The role of private providers is dominant in the case of general practitioners, dental care, transportation, kidney dialysis, CT/MRI and home care (home nursing). CONCLUSIONS: The financial data of the NHIF showed the dynamic increase of market share of for-profit private providers and non-profit sector in many field of health care, although they role in the two most important fields (out- and inpatient care) is still negligible.     

美国非营利医院与营利医院的区别和竞争

美国非营利性医院约占85%,营利性医院约占15%,两者主要的区别表现在:非营利性医院提供很多社区服务、健康教育等社会福利,它的收支节余不能用于分红。而营利性医院的一个主要目的就是为业主或股东赚取利润。另外,非营利性医院享受政府的免税政策,1996年,全美该项免税额为85亿美元。无论是营利性医院或者非营利性医院都必须有盈利,否则不可能生存下去。     

Regulation, Ownership and Efficiency in the Swiss Nursing Home Industry

Switzerland is a federal State where policy decisions regarding long-term care regulation are by rights incumbent upon regional and local governments. This situation is in part responsible for the large number of small nursing homes operating in Switzerland. Moreover, long-term care for the elderly is supplied by public, private for-profit and non-profit nursing homes, respectively.The paper presents an econometric estimation of a stochastic cost frontier using cross-section data for a sample of 886 Swiss nursing homes operating in 1998. The results of this analysis are used to examine the relationship between cost efficiency, the alternative institutional forms and the different regulatory settings.     

营利与非营利医疗机构的判定和监测

任何医疗机构有向居民提供基本医疗和执行国家定价的权利，机构营利与非营利的性质主要应由机构自己决定并由其经营行为体现。医疗服务营利具有自发性和隐蔽性，政府必须进行严格的判定和监测，以保证消费不受欺诈和医疗市场的公正和公平。监测利用服务价格、财务收支、基本医疗服务比重、人均工资、奖金、福利等各项指标。进行医疗机构的分类管理应该做好几项基础工作，包括核算服务项目的标准成本，进行合理定价，进一步界定基本医疗，确定非营利机构的合理奖金福利水平，建立医疗管理信息系统，建立专业审核监测组织，确立管理机制和决策程序等。     

Levelling the playing field? Exploring the implications of managed competition for voluntary sector providers of long-term care in small town Ontario

This paper considers how long-term care restructuring, under the rubric of managed competition, has increased pressure on voluntary sector providers of long-term care to elderly populations in small, rural places. Drawing on in-depth interviews with key-informants from non-profit organizations, we present a case study set in rural Ontario to develop a situated understanding of the impact of restructuring on voluntary sector providers of long-term care. We contend that managed competition (underway in Ontario since 1995) has constrained providers, eroded service choices, and reduced access to long-term care in rural areas leaving rural populations more disadvantaged than ever before when it comes to public service provisioning.     

Quality of care and the demand for health services in Bamako,Mali: the specific roles of structural,process, and outcome components

The public finance and foreign exchange crisis of the 1980s aggravated the unfavourable economic trends in many developing countries and resulted in budget cuts in the health sector. Policymakers, following the suggestions of World Bank experts, introduced user fees. Economic analysis of the demand for health care in these countries focused on the impact of price and income on health service utilisation. But the lesson to date from experiences in cost recovery is that without visible and fairly immediate improvements in the quality of care, the implementation of user fees will cause service utilisation to drop. For this reason, the role of quality of health care has been recently a subject of investigation in a number of health care demand studies. In spite of using the data from both households and facilities, recent studies are quite limited because they measure quality only by structural attributes (availability of drugs, equipment, number and qualifications of staff, and so on). Structural attributes of quality are necessary but not sufficient conditions for demand. A unique feature of this study is that it also considers the processes followed by practitioners and the outcome of care, to determine simultaneously the respective influence of price and quality on decision making. A nested multinomial logit was used to examine the choice between six alternatives (self-treatment, modern treatment at home, public hospital, public dispensary, for-profit facility and non-profit facility). The estimations are based on data from a statistically representative sample of 1104 patients from 1191 households and the data from a stratified random sample of 42 out of 84 facilities identified. The results indicate that omitting the process quality variables from the demand model produces a bias not only in the estimated coefficient of the "price" variable but also in coefficients of some structural attributes of the quality. The simulations suggest that price has a minor effect on utilisation of health services, and that health authorities can simultaneously double user fees and increase utilisation by emphasising improvement of both the structural and process quality of care in public health facilities.     

Comparing public and private hospitals in China: Evidence from Guangdong

Background  

The literature comparing private not-for-profit, for-profit, and government providers mostly relies on empirical evidence from high-income and established market economies. Studies from developing and transitional economies remain scarce, especially regarding patient case-mix and quality of care in public and private hospitals, even though countries such as China have expanded a mixed-ownership approach to service delivery. The purpose of this study is to compare the operations and performance of public and private hospitals in Guangdong Province, China, focusing on differences in patient case-mix and quality of care.     

Comparative analysis of the non-profit, for-profit and public hospital providers: American experiences

BACKGROUND AND OBJECTIVES: The new legislation allowed hospitals and other health care facilities to be converted into for-profit status. The detailed regulatory framework is under development in Hungary. This article reviews the literature of studies comparing hospital financial performance and the quality of care before and after conversion from public or non-profit status to for-profit. METHODS: Studies were identified through electronic search of Medline (Pubmed), EconLit, Cochrane Library, Economic Evaluation Database (EED), az Health Technology Assessment (HTA) databases, library files and reference lists. The literature search was extended to the Internet, World Bank, International Labor Office (ILO), Organization for Economic Cooperation and Development (OECD), and WHO websites as well as government, academic institutions and large insurance companies web pages for unpublished online information. Time series and before-after studies and systematic literature reviews were included. RESULTS: The conversion from non-profit to for-profit status improved the profitability of the hospitals. However the quality of care (measures in mortality, frequency of side effects, complications) might suffer in the first couple years of the conversion. The conversion may increase the total health care expenditures per capita. Trustful relationship between patients and physicians may also be threatened. CONCLUSION: The generalisability of the American experiences into the Hungarian single payer system may be limited. From societal point of view, for-profit providers could provide socially beneficial care in areas where it is possible to define, monitor and evaluate the nature and quality characteristics of the services, as well as market competition can be ensured. However most of the healthcare services are too complex to fall into this category.     

Differences between non-profit and for-profit hospices: patient selection and quality

This research compares the behavior of non-profit organizations and private for-profit firms in the hospice industry, where there are financial incentives created by the Medicare benefit. Medicare reimburses hospices on a fixed per diem basis, regardless of patient diagnosis. Because under this system patients with lower expected costs are more profitable, hospices can selectively enroll patients with longer lengths of stay. While it is illegal for hospices to reject potential patients explicitly, they can influence their patient mix through referral networks. A fixed per diem rate also creates an incentive shirk on quality and to substitute lower skilled for higher skilled labor, which has implications for quality of care. By using within-market variation in hospice characteristics, the empirical evidence suggests that for-profit hospices differentially take advantage of these incentives. The results show that for-profit hospices engage in patient selection through significantly different referral networks than non-profits. They receive more patients from long-term care facilities and fewer patients through more traditional paths, such as physician referrals. This mechanism of patient selection is supported by the result that for-profits have fewer cancer patients and more patients with longer lengths of stay. While non-profit and for-profit hospices report similar numbers of staff visits per patient, for-profit firms make significantly less use of skilled nursing providers. We also find some weak evidence of lower levels of quality in for-profit hospices.     

Competitive spillovers across non-profit and for-profit nursing homes

The importance of non-profit institutions in the health care sector has generated a vast empirical literature examining quality differences between non-profit and for-profit nursing homes. Recent theoretical work has emphasized that much of this empirical literature is flawed in that previous studies rely solely on dummy variables to capture the effects of ownership rather than accounting for the share of non-profit nursing homes in the market. This analysis considers whether competitive spillovers from non-profits lead to higher quality in for-profit nursing homes. Using instrumental variables to account for the potential endogeneity of non-profit market share, this study finds that an increase in non-profit market share improves for-profit and overall nursing home quality. These findings are consistent with the hypothesis that non-profits serve as a quality signal for uninformed nursing home consumers.     

Is the corporate transformation of hospitals creating a new hybrid health care space? A case study of the impact of co-location of public and private hospitals in Australia

A common feature of health reforms in western nations has been the transformation or (re)construction of health and health care as both a commodity and product. In the hospital sector, this transformation has become increasingly evident in the growth of for-profit involvement in service delivery. Investor-owned hospitals are now prominent providers of hospital care in Australia. This paper examines the changing nature of health care space through the changing portrayal and meaning of hospitals as represented by and encoded in the built environment. Public hospitals once occupied 'pride of place'. In contrast, up to the early 1980s, the private sector was seen as a cottage industry. However, increased levels of state subsidisation and government incentives and pro-market policies, combined with market-based opportunities for profit generation, have seen the emergence of large private hospital chains with a new corporate image to hospital care and the blurring of 'public' and 'private'. A significant factor in the reconstruction of hospital space in Australia has been the co-location of private and public hospitals. Co-location is a popular strategy proffered by State governments and one that has been quickly acted on by corporate providers. Using Mayne Health Ltd, Australia's largest for-profit hospital chain, and four specific case studies, this paper explores four variants of co-location. Each of these examples represent a different public and private hospital space. The growth of for-profit hospital chains signifies a new phase in the delivery of health care in Australia but also importantly the creation of a new hybridised 'health care' space. This space is neither private nor public but a reflection of the economic, political and social processes underlying this transformation.     

社会资本举办非营利性医疗机构的政策建议

遵循国家鼓励和支持社会资本办医的政策导向,为更好地发展社会资本举办非营利性医疗机构提出6条政策建议：调整营利性与非营利性的分类方式,试点大型公立医院的转制,财政补助转＂暗贴＂为＂明贴＂,调整医疗服务价格,形成立体双向的监管体系,细化和落实法律法规。