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.     

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.     

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.     

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.     

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.     

The effects of ownership and ownership change on nursing home industry costs.

OBJECTIVE. This study examines the effects of ownership type and ownership change on nursing home cost structures, differentiating patient care costs from plant costs. DATA SOURCES. Administrative data from the Michigan Department of Social Services, Medical Services Administration (Medicaid), and the Michigan Department of Public Health are used. Cost data are based on audited cost reports for 393 nursing care facilities in Michigan in 1989. Other facility characteristics are based on data from the 1989 annual licensing and certification survey conducted by the Michigan Department of Public Health. STUDY DESIGN. A series of ordinary least squares regressions is estimated, in which the dependent variable is either per diem patient costs or per diem plant costs. Ownership types are defined as chain, proprietary non-chain, freestanding non-profit, government-owned, and hospital-based facilities. Pooled estimation techniques, as well as separate regressions by ownership type, are presented to test for interaction effects. Key variables include whether a facility changed ownership in the preceding five years and whether chain facilities are in-state- or out-of-state-owned, in addition to size, payer mix, and case mix. PRINCIPAL FINDINGS. Behavioral differences among nursing home ownership types in respect to patient care costs tended to distinguish government-owned and hospital-based facilities from the freestanding homes rather than the usual distinction between for-profit and not-for-profit classes. Variables traditionally included in nursing home cost studies, such as size, occupancy, payer mix and case mix, were found to have similar effects on per diem patient care costs for freestanding non-profit homes as well as for chain proprietary facilities. With regard to the effects of ownership change on per diem plant and per diem patient costs, however, there are few differences among ownership types. Chain and non-chain for-profit facilities, non-profit homes, and hospital long-term care units that had changed ownership reported significantly higher per diem plant costs than facilities without a change of ownership, but did not spend more on patient-related costs. Michigan Medicaid plant reimbursement system policy changes instituted in 1985 to promote continued ownership of facilities were not entirely successful. CONCLUSIONS. Non-profit homes look increasingly like their for-profit counterparts with respect to spending on patient care costs. Increased competition for the more lucrative private-pay patients, coupled with declining state Medicaid reimbursement to nursing homes, may have blurred the historical distinctions between the non-profit and for-profit sectors in the nursing home industry. An exception to increasing homogeneity within the nursing home industry is the tendency of proprietary homes to experience more frequent changes of ownership, which results in higher capital costs passed on to state Medicaid programs. Findings from this study indicate that while facility sales increase per diem plant costs, they do not result in increased spending for direct patient care, suggesting that state Medicaid programs may be indirectly subsidizing facility sales with no accompanying increase in expenditures for patient care. To discourage frequent facility sales, state Medicaid programs may need to consider alternative methods of reimbursing nursing home owners for capital costs.     

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.     

Provision of sexual health services to adolescent enrollees in Medicaid managed care

OBJECTIVES: This Seattle project measured sexual health services provided to 1112 Medicaid managed care enrollees aged 14 to 18 years. METHODS: Three health maintenance organizations (HMOs) that provide Medicaid services for a capitated rate agreed to participate. These included a non-profit staff-model HMO, a for-profit independent practice association (IPA), and a non-profit alliance of community clinics. Analyses used health maintenance organizations' administrative data, chart reviews, and Medicaid encounter data. RESULTS: Health maintenance organizations provided primary care to 54% and well care to 20% of Medicaid enrollees. Girls were more likely than boys to have their sexual history taken or to be given condom counseling. Only 27% of sexually active girls were tested for chlamydia, with significantly lower rates of testing among those who spoke English as a second language. The nonprofit staff-model plan outperformed the for-profit independent practice association on most measures. CONCLUSIONS: Substantial room for improvement exists in sexual health services delivery to adolescent Medicaid managed care enrollees.     

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.     

Hospital mission and cost differences.

The results show no significant differences on average length of stay, cost per patient day, or cost per admission among non-profit, government, and for-profit hospitals when controlling for bed capacities, occupancy rates, number of Medicare/Medicaid days, and hospitals without nurseries. For-profit hospital manhours per patient day were significantly lower than non-profit and government hospitals. This is an important finding because patient-care delivery is labor-intensive. A majority of for-profit hospitals do not have nurseries, which means that they should have more manhours per patient day. As indicated earlier, the manhours for hospitals with nurseries are higher than those for hospitals without nurseries. This indicates cost-cutting behavior on the part of a majority of for-profit hospitals. This method of limiting expenditures by decreasing labor costs associated with certain services is consistent with profit-maximization. The findings of this study with regard to cost differences among non-profit and for-profit hospitals contradict previous research. However, a recent study by Kralewski, Gifford and Porter (1988) noted that whereas ownership, when considered alone, differentiates hospitals, when evaluated within each community, most of the investor-owned and non-for-profit hospital differences disappear. Similar questions have been raised as to whether non-profit hospitals truly differ from for-profit hospitals (Pauly 1987). Caution needs to be exercised in attempting to extrapolate the findings of this study, because of the dynamic health care environment. Hospital ownership changes over time, reimbursement rules affect behavior, and internal factors in organizational operation affect outcomes. These should be considered in future studies exploring organizational mission and cost differences.     

Home Care Workers' Assessment of Differences Between Nonprofit and For-Profit Organizations Delivering Home Care Services to the Israeli Elderly

This paper presents research findings analyzing home care workers' assessment of the differences between nonprofit and for-profit organizations delivering home care services to Israel's frail elderly. The study focuses in articular on the workers' motives for choosing a pacticular employer, their empowerment, the training and enrichment programs available to them, and their perceptions of organizational fairness and performance. Nonprofit organizatiom received higher evaluations from workers than did for-profit organizations and invested more in the management of human resources.     

Challenges and opportunities for personal selling

Health care organizations are beginning to use sales forces in much the same way as traditional for-profit organizations have used selling programs in the past. However, numerous challenges to the implementation of selling in the health care industry have yet to be overcome. The authors report viewpoints expressed by administrators in a national survey of health care organizations.     

The effects of cost-containment on home health agencies.

Home health agencies are examined in terms of changes their organizations have experienced as a result of federal health care cost-containment policies. Contrasts are made between data collected from a sample of home health agencies in 1983 and 1984. Some attention is also given to differences in home health agency experiences by state. Home health agencies are beginning to change their tax status to for-profit and to try to attract private insurance clients which may potentially alter the home health market in favor of younger clients. The agencies experienced many more denial of claims by the Medicare fiscal intermediaries in 1984 than in 1983.     

Home care workers' assessment of differences between nonprofit and for-profit organizations delivering home care services to the Israeli elderly

This paper presents research findings analyzing home care workers' assessment of the differences between nonprofit and for-profit organizations delivering home care services to Israel's frail elderly. The study focuses in particular on the workers' motives for choosing a particular employer, their empowerment, the training and enrichment programs available to them, and their perceptions of organizational fairness and performance. Nonprofit organizations received higher evaluations from workers than did for-profit organizations and invested more in the management of human resources.     

From policy to practice: physicians' views on OBRA and mental health resources in long-term care

OBJECTIVES: The purpose of this national survey was to seek to clarify physician beliefs about nursing home mental health needs, understand the perceived effectiveness of OBRA legislation, determine physician exposure to OBRA PASARR Level II assessments, and understand the current role of community mental health interventions in the nursing home. DESIGN: A self-administered questionnaire. SETTING: Surveyed physicians were nursing home medical directors and/or attending physicians. PARTICIPANTS: The overall response rate for the 1000 physicians surveyed nationally, was 62% (n = 620). Fifty-nine percent (n = 361) of all responders were family physicians, and 41% (n = 250) were general internists. MEASUREMENTS/RESULTS: Only 48% (n = 291) of all respondents ever saw the recommendations from their patient's OBRA PASARR Level II assessment screening. Approximately one-third of all respondents viewed each discipline's recommendations as "very" or "somewhat" helpful. Thirty-seven percent (n = 228) of respondents viewed OBRA's psychotropic guidelines as only somewhat helpful. More than two-thirds (n = 412) believed OBRA regulations had not improved access to mental health care for their nursing home patients. CONCLUSIONS: This survey demonstrated that OBRA PASARR Level II assessments are not being viewed or valued by many physicians. In nursing homes, limited access to community mental health staff and psychiatric input may leave primary care physicians treating difficult behavioral problems themselves. Collaborating on helpful mental health interventions for nursing home patients is an ongoing critical issue in long-term 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.     

Labour supply in the home care industry: A case study in a Dutch region

Health organizations have started to become more market-driven. Therefore, it is important for health organizations to analyse the competitive dynamics of their industrial structure. However, relevant theories and models have mainly been developed for organizations acting in the profit sector. In this paper, we adapt Porter's 'five forces model' to the home care industry. In particular, we modify the (determinants of the) bargaining power of labour suppliers. We then apply the modified Porter-model to the home care industry in the Netherlands for the period of 1987-1997 with special attention for labour supply. The new instrument clarifies the complexity of the supply chains and value systems of the home care industry. As can be illustrated by developments in the home care industry in the province of North Brabant during the 1990s, competition between home care providers has influenced labour market relations, but so do other factors as well. Between 1987 and 1997, the bargaining power of labour suppliers was relatively limited. After 1997, however, the demand for home care personnel has increased strongly. In spite of the present economic recession, scarcity on this labour market seems to prevail in the longer term due to a growing demand for home care services.     

OBRA 1987 and the quality of nursing home care

Because minimum government standards for quality regulate only part of the market failure, they may have unintended effects. We present a general theory of how government regulation of quality of care may affect different market segments, and test the hypotheses for the nursing home market. OBRA 1987 was a sweeping government reform to improve the quality of nursing home care. We study how the effect of OBRA on the quality of nursing home care, measured by resident outcomes, varied with nursing home profitability. Using a semi-parametric method to control for the endogenous effects of regulation, we found that this landmark legislation had a negative effect on the quality of care in less profitable nursing homes, but improved the quality in more profitable nursing homes during the initial period after OBRA. But, this legislation had no statistically significant effect in the later period when the regulation was weakly enforced. JEL Classification I18 . I11     

Non-profit and for-profit organizations in home care services: a comparative analysis

The paper analyzes differences in the organizational, structural and strategic behavior of Non-Profit Organizations and For-Profit Organizations in Israel which provide home care services for the frail elderly. In contrast to other studies which have analyzed differences between institutions delivering various social services in the profit and non-profit sectors, this paper focuses on those organizations supplying home care services in the community. The findings suggest that NPO's have qualitative and operational advantages over FPO's.     

For-profit and not-for-profit health plans participating in Medicaid

The proliferation of for-profit health plans has heightened concerns about quality of care, particularly with respect to Medicaid. We undertook this study to compare for-profit and not-for-profit health plans that participate in Medicaid, examining processes of care and the organizational characteristics related to utilization management, financial incentives, and quality of care. Our findings demonstrate that for-profit and not-for-profit plans appear to be more similar than dissimilar in many areas of management, although for-profit plans are more likely to use aggressive utilization review and have slightly less developed quality management systems. On balance, these findings should reassure critics of for-profit health care.