Nontraditional services provided by nonprofit and for-profit hospitals: implications for community health

In part because of reimbursement changes in the 1980s, hospitals became involved in health promotion and disease prevention activities often to attract patients. Today, these services may have an effect on the burden of disease and on illness prevention in some communities. Given the changes anticipated in healthcare delivery, assessing the scope of these services and integrating them with other private-public efforts is of utmost importance. Here we use a 1993 survey of all 4,977 private medical and surgical hospitals in the United States to determine the scope of disease prevention, health enhancement, and palliative services provided by facility type, geographic location, and institutional ownership. We found that church-operated and other nonprofit hospitals appear to provide a spectrum of palliative and preventive health services both for their patients and those in the local community. Given their apparent scope, these services could have an effect on the burden of disease and on illness prevention in many communities. With major changes anticipated in future healthcare delivery and the recent failures reported for many community health intervention programs, healthcare administrators need to focus on ways to integrate their services with other private and public health efforts. If this could be achieved, then private hospitals could be more successful in serving their local communities and in enhancing the public's health in the new century. This article outlines several basic steps to assist administrators in achieving these goals.     

Strategic management and performance differences: nonprofit versus for-profit health organizations

Despite mixed and contradictory findings, for-profits (FPs) and nonprofits (NPs) are assumed to be similar health services organizations (HSOs). In this study, a fifteen-item scale assessing HSOs' strategic management capacity was developed and tested using fifty-seven FP and twenty NP organizations. Then, using item response theory, the items were hierarchically profiled to produce two strategic profile models, a general and an FP anchored model. We find that deviation from the general profile, but not capability attainment level, is related to two of three financial measures. We conclude that studying FPs and NPs together is appropriate.     

Measuring community benefits provided by for-profit and nonprofit hospitals

Nonprofit hospitals are expected to provide benefits to their community in return for being exempt from most taxes. In this paper we develop a new method of identifying activities that should qualify as community benefits and of determining a benchmark for the amount of community benefits a nonprofit hospital should be expected to provide. We then compare estimates of nonprofits' current level of community benefits with our benchmark and show that actual provision appears to fall short. Either nonprofit hospitals as a group ought to provide more community benefits, or they are performing activities that cannot be measured. In either case, better measurement and accounting of community benefits would improve public policy.     

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.     

Consumer information and competition between nonprofit and for-profit nursing homes.

This paper develops implications of Arrow's hypothesis that nonprofit organizations are prevalent in health care because of quality uncertainty. The model analyzes the ability of nonprofits to mitigate market failures created by asymmetric information in an environment characterized by potential competition from both explicitly for-profit firms and for-profits in disguise (profit-motivated firms who obtain nonprofit status in order to exploit the perceived trustworthiness of the nonprofit sector). Under certain conditions, it is shown that nonprofit status can serve as a credible signal of quality and that nonprofits can decrease the underprovision of quality both by providing high quality services and indirectly via a spillover effect on quality in the for-profit sector. Applicability to long-term care and implications for empirical research and policy towards nonprofits in health care are discussed.     

Making profits and providing care: comparing nonprofit, for-profit, and government hospitals

Three types of entities-nonprofit, for-profit, and government-own hospitals. Yet we know neither whether hospital types specialize in different medical services nor how service profitability affects specialization. In this econometric analysis of American Hospital Association data for every U.S. urban, acute care hospital (1988-2000), more than thirty services were categorized as relatively profitable, unprofitable, or variable. For-profits are most likely to offer relatively profitable medical services; government hospitals are most likely to offer relatively unprofitable services; nonprofits often fall in the middle. For-profits are also more responsive to changes in service profitability than the other two types.     

南方某省营利性与非营利性医院的比较分析

目的了解某省营利性医院的现状并与同等规模的非营利性医院进行比较。方法利用2002年常规卫生统计资料，使用71所有编制床位的营利性医院和同等规模的132所非营利性医院资料进行分析。结果营利性医院的人员规模小，基本上没有离退休人员的负担；提供的门急诊服务量小，但住院服务量与非营利性医院相同；收入和支出水平尚不到非营利性医院的一半，但是，能够保持收支平衡;营利性医院和非营利性医院一样存在病人欠费问题。结论在支持发展非公有制经济的政策环境下，营利性医院会有很大发展。因此，政策制定应慎重考虑可能的不利影响，并采取相应对策。     

An empirical investigation of for-profit and tax-exempt nonprofit hospitals engaged in joint ventures

Joint ventures between nonprofit and for-profit hospitals offer opportunities for collaboration to increase efficiency. These transactions have attracted the attention of the Internal Revenue Service, which may threaten tax-exempt status. This article analyzes inherent financial characteristics of nonprofit hospitals that joint venture with for-profit hospitals and those that choose not to joint venture.     

The comparative performance of for-profit and nonprofit home health care services in the US

OBJECTIVE: To determine, by way of an exhaustive, systematic, and comprehensive review and summary of all scientific published studies, whether or not there are any performance differences between private for-profit and private nonprofit home health care providers. The second objective is to discover the proportion of all research on this topic that is devoted to home health care services compared to all other health services providers. DATA SOURCES: Computerized bibliographic searches of relevant databases and published indexes and abstracts were undertaken. They included Medline (Ovid and Pubmed versions), Web of Science (Social Sciences Citation Index and Science Citation Index), ABI/Inform, and Sociological Abstracts. Follow-up searches of reference lists in each article obtained from the computerized search were then completed. STUDY DESIGN: This systematic review retained for analysis all published studies that compared the performance of for-profit and nonprofit health care providers on access, quality, cost/efficiency, and/or amount of charity care, based on data collected after 1980. As a quality control measure only studies published in peer reviewed journals were included. Studies were coded according to the article's stated conclusions: for-profit superiority, nonprofit superiority, or no difference/mixed results. PRINCIPAL FINDINGS: The comparative performance of for-profit and nonprofit home health service organizations is one of the most understudied areas of health care provider services in the US today. Only 6 of the over 1030 comparisons of the two concerned home health care. No data on this topic have been collected since 1991, and no articles about it have been published in a peer-reviewed journal since 1995. CONCLUSION: Research on the relative performance of for-profit and nonprofit home health care services is a research priority urgently in need of attention.     

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.     

An empirical comparison between the board''s strategic role in nonprofit hospitals and in for-profit industrial firms.

As the health care environment becomes more competitive, nonprofit hospitals are under pressure to adopt for-profit business practices. Based on an extensive field study, this research examines the central issue of organizational governance by comparing the strategic roles of nonprofit hospital boards with for-profit industrial boards. The results show that nonprofit hospital boards are generally more involved in the strategic decision process than their for-profit counterparts. If this governance activity is seen as desirable, hospital boards should exercise caution in emulating for-profit board practices.     

Multinational operations of US for-profit hospital chains: trends and implications.

The expansion of United States for-profit hospital chains into the international arena is a new and important development. Experiences with contract management of middle eastern hospitals in the early 1970s gave the American firms impetus to pursue ownership of health facilities in other parts of the world. US companies now operate over 95 foreign hospitals. The reasons for this involvement include the political receptivity of the government of the host nation; the potential for rapid growth and profits; the lack of indigenous competition; and the ability to occupy a distinct niche within the extant health services organization. The political and ideological implications of the growth of private medicine, particularly in the United Kingdom, in terms of its effects on the National Health Service are discussed. Questions for future research are posed.     

The effects of for-profit multihospital system ownership on hospital financial and operating performance.

The financial and operating performance of independent not-for-profit hospitals acquired by US for-profit multi-hospital systems in 10 Southern states between the years 1978 and 1982 was explored. The impact of system ownership on acquired hospitals was investigated by comparing the average financial performance of hospitals in the two years immediately prior to acquisition to the average for 1984 and 1985 and by comparing changes in the performance of acquired hospitals with changes in matched independent facilities. Findings suggest that for-profit multi-hospital systems were able to improve many of the financial and operating problems of acquired facilities. In comparison to independent not-for-profit hospitals, acquired hospitals were found to increase access to long-term debt, make improvements to plant and equipment, improve profitability, and increase efficiency to a greater extent. Prices in acquired hospitals rose more than those in independents and liquidity decreased to a greater extent.     

Stakeholder expectations in practice-based medicine

Competitive pressures are forcing physicians from solo practice into new organizational structures. These new structures and the technologies supporting them have generated suggestions for improving medical practice. This article examines the unspoken assumption often accompanying these suggestions that practice improvement can come about through a closer alignment of the practice's goals and values with its stakeholders' expectations. Because conflict among competing goals is inevitable in a resource-scarce environment, an important question for each practice, and for each individual physician in a practice, is how to adjudicate conflicts of value when the goals of the practice appear to collide. This essay concludes with a proposal for an adjudicating process to help resolve these conflicts in practice-based medicine.     

Better together: Coexistence of for-profit and nonprofit firms with an application to the U.S. hospice industry

Many markets maintain a nontrivial mix of both nonprofit and for-profit firms, particularly in health care industries such as hospice, nursing homes, and home health. What are the effects of coexistence vs. dominance of one ownership type? We show how the presence of both ownership types can lead to greater diversity in consumer types served, even if both firms merely profit-maximize. This is the case where firms serve consumers for multiple consumption durations, but where donations are part of a nonprofit firm objective function and happen after services have been provided. This finding is strengthened if the good or service has value beyond immediate consumption or the direct consumer. We show these predictions empirically in the hospice industry, using data containing over 90 percent of freestanding U.S. hospices, 2000–2008. Nonprofit and for-profit providers split the patient market according to length of stay, leading to a wider range of patients being served than in the absence of this coexistence.     

The management of enthusiasm: motives and expectations in cardiovascular medicine

Debates about appropriate action in medicine often turn on finding the right emotional orientation to new developments. In this article enthusiasm emerges as a key term in a professional 'vocabulary of motive' around innovation, complicating current sociological interest in expectations. The negative associations that adhere to this word among clinical researchers indicate awareness with the difficulty of managing hype and public hopes, but analysis of its use by cardiologists over the past two decades also reveals tension around more specific professional dangers, including 'credulity' and inappropriate activism. An emphasis on clinical trials offers one resolution, but additional narrative strategies can be identified when discussing when to start such trials here illustrated for stem cells for cardiac repair. In particular, while some suggest delaying trials until there is good knowledge of mechanism gained in the laboratory, others support early clinical research through gestures of therapeutic and epistemic modesty.     

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.