70th International Atlantic Economic Conference

October 11 - 13, 2010 | Charleston, USA

Impact of For-Profit Presence on Hospital Outcomes

Wednesday, October 13, 2010: 11:15 AM
Michael Rosko, Ph.D. , Health Care Management, Widener University, Chester, PA
Ryan L. Mutter, Ph.D. , Center for Delivery, Organization and Markets, Agency for Healthcare Research and Quality, Rockville, MD
Objectives: The primary objective of the study is to examine the association of the market presence of for-profit (FP) hospitals with eight patient outcome measures. Secondary objectives include the examination of the association of other factors (i.e., teaching status and competitive forces) on these outcome measures. Quality of patient care remains (with cost and access) an important issue confronting hospital services in the US and understanding quality variations is important for policy analysts. Institutional mission drives strategic orientation towards quality and perhaps responsiveness to incentives such as P4P, as well as to market forces. Accordingly, it is important to examine the association of market and organization characteristics with measures of patient outcomes.
Data/Methods:  We use a balanced panel for 2002-06 (t=5) of 1,382 urban hospitals (n=6,910) located in 32 states that participated in the Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SIDs). Risk-adjusted in-hospital rates came from the application of the Patient Safety Indicator (PSI) and Inpatient Quality Indicator (IQI) modules of the Agency for Healthcare Research and Quality (AHRQ) Quality Indicator (QI) software to the HCUP SIDs.  The following risk-adjusted measures were used:  rates of iatrogenic pneumothorax, infection due to medical care, accidental puncture/laceration, and mortality rates for acute myocardial infarction (AMI), congestive heart failure, stroke, gastrointestinal hemorrhage, and pneumonia. While the outcomes are aggregated at the hospital-level, risk-adjustment was performed with individual patient characteristics. The Medicare Case Mix Index and 30 variables from the application of the Comorbidity Software to the SIDs served as controls for case mix. Random-effects GLS regression equations, that account for repeated measures as well as clustering at the market-level (i.e., county),  were estimated for each of the outcomes.
Results: Our analysis (p < 0.05) suggests that better quality of care is provided by NFP hospitals when there is a FP hospital in the market. Academic medical centers tend to have lower mortality rates, but there are more adverse patient safety events associated with care given in these facilities. Public ownership was associated with poorer outcomes on 3 measures. More hospital competition is associated with better care for most patient safety and mortality outcome measures. Increased HMO penetration had an adverse impact on two patient safety indicators but no association with mortality rates. Quality is improving over time for 5 outcomes and declined for only one.
It appears that NFP hospitals respond to competition from FPs by improving patient outcomes. Previous research has frequently concluded that academic medical centers provide better quality care than other types of hospitals. Our analysis confirms this for mortality rates but not for patient safety events. Where significant, the results for public hospitals suggest that they might provide poorer quality care than private hospitals. This would be consistent with the underfunding of these institutions.  Our analysis suggests that using condition-specific risk-adjusted mortality rates may provide more insights than an aggregated measure. For most outcomes, performance has improved over time suggesting the beneficial impact on the increased emphasis placed on patient safety and clinical quality.