Conversion to For-Profit Status Improves Financial Margins for Hospitals

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Hospitals that converted to for-profit status increased financial margins without changes in quality metrics or mortality rates.

Conversion to For-Profit Status Improves Financial Margins for Hospitals
Conversion to For-Profit Status Improves Financial Margins for Hospitals

(HealthDay News) — Hospital conversion to for-profit status is associated with improvements in financial margins, but has no effect on process quality metrics or mortality rates, according to a study published in JAMA.

Karen E. Joynt, MD, MPH, from the Harvard School of Public Health in Boston, and colleagues conducted a retrospective cohort study involving Medicare fee-for-service beneficiaries at 237 converting hospitals and 631 matched control hospitals.

The researchers found that total margins (ratio of net income to net revenue plus other income) were improved more in converting hospitals than controls (2.2% vs. 0.4% improvement; P=.007). Process quality metrics were improved in both converting hospitals and control hospitals (6.0% and 5.6%, respectively; P=.59). 

There was no change in mortality rates at converting hospitals relative to controls for Medicare patients overall (increase of 0.1% vs. 0.2%; P=.42) or for dual-eligible or disabled patients. 

Relative to controls, there was no change in converting hospitals with respect to annual Medicare volume; Disproportionate Share Hospital Index; the proportion of patients with Medicaid; or the proportion of patients who were black or Hispanic.

"Hospital conversion to for-profit status was associated with improvements in financial margins but not associated with differences in quality or mortality rates or with the proportion of poor or minority patients receiving care," the researchers wrote.

Reference

  1. Joynt KE et al. JAMA. 2014;312(16):1644-1652.
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