This article is more than 5 years old. Information may no longer be current.
Converted for-profit hospitals improved revenues, not outcomes
Hospitals that converted to a for-profit model showed financial improvements but no changes in outcomes, according to a new investigation.
Researchers examined 237 hospitals from 2003 to 2010 that converted to a for-profit model and found that those hospitals were more likely to be small to medium in size, located in the South, in an urban or suburban region and were less likely to be teaching institutions. The hospitals were matched with 631 control hospitals that served 4,828,138 patients vs. 1,843,764 patients in the converting hospitals with common comorbidities such as hypertension and diabetes.
Hospitals that converted to a for-profit model improved their total margins (ratio of net income to net revenue plus other income) more than control hospitals by 2.2% vs. 0.4%; difference in differences, 1.8% (95% CI, 0.5% to 3.1%). Converting hospitals and controls both improved their process quality metrics by 6% vs. 5.6%, respectively; difference in differences, 0.4% (95% CI, −1.1% to 2%).
There were no significant changes in mortality rates at converting hospitals vs. control Medicare patients, showing an increase of 0.1% vs. 0.2%; difference in differences, −0.2% (95% CI, −0.5% to 0.2%) or for dual-eligible or disabled patients. No significant change was observed in converting hospitals relative to control patients in annual Medicare volume, which was shown as −111 vs. −74 patients; difference in differences, −37 (95% CI, −224 to 150).
The Disproportionate Share Hospital Index was 1.7% vs. 0.4%; difference in differences, 1.3% (95% CI, −0.9% to 3.4%), and the proportion of Medicaid patients was −0.2% vs. 0.4%; difference in differences, −0.6% (95% CI, −2% to 0.8%). The proportion of black patients was −0.4% vs. −0.1%; difference in differences, −0.3% (95% CI, −1.9% to 1.3%), and Hispanic patients varied by 0.1% vs −0.1%; difference in differences, 0.2% (95% CI, −0.3% to 0.7%).
“We found no evidence that conversion was associated with worsening care, as measured by processes of care, nurse staffing, or outcomes,” the researchers wrote. “On the other hand, for-profit hospitals have often argued that conversion will provide resources that will lead to better care, and our study failed to find any evidence to support this notion, either.”
Disclosure: The researchers report no relevant financial disclosures. Joynt was supported by a grant from the National Heart, Lung, and Blood Institute, National Institutes of Health.