Converting to for-profit status didn't hurt quality of care or prompt avoidance of low-income patients at hundreds of hospitals that made the change from 2003 to 2010, according to a JAMA study.
Researchers affiliated with HHS and three Boston-based organizations —the Harvard School of Public Health, Brigham and Women's Hospital and the Veterans Administration Healthcare System — analyzed 237 hospitals that converted to for-profit status during the study period and 631 control hospitals. They compared financial performance measures, quality process measures, Medicare volume and patient population during the two years before the hospital converted and the two years after, excluding the year of conversion.
They found that hospitals that transitioned to for-profit status increased their total margins more than the control hospitals (2.2 percent versus 0.4 percent). The converting hospitals and control hospitals saw comparable improvement in their process quality metrics (6 percent), compared with the control hospitals (5.6 percent). Additionally, mortality rates didn't change at converting hospitals compared with control facilities for Medicare patients overall. Hospitals that converted also didn't differ from the control hospitals in annual Medicare volume, their proportion of Medicaid patients, Disproportionate Share Hospital Index, or the portion of their patients who were black or Hispanic.
"We found no evidence that conversion was associated with worsening care, as measured by processes of care, nurse staffing or outcomes," the researchers write. "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. In fact, our findings suggest that as regulators and policy makers consider for-profit conversions, the likely changes that could be anticipated will primarily be in the financial health of the institution, with little relationship, either positive or negative, to the quality of care provided or the institution's mortality rates. "
The Federation of American Hospitals — which represents more than 1,000 investor-owned or managed community hospitals and health systems nationwide — has praised the study for quashing concerns about for-profit conversion hurting quality of care and leading to discrimination against disadvantaged patients.
"This new study demonstrates conclusively that struggling hospitals that undergo conversions emerge stronger and better able to serve their patients and communities," said FAH President and CEO Charles N. Kahn III. "The results dissolve myths that such changes have any negative effect on quality, service to low-income individuals on Medicaid, or to nurse or staffing levels necessary to assure the highest quality care."