According to a new study, hospitals provide more relatively profitable services than unprofitable ones, regardless of their for-profit, non-profit or government status.
Meanwhile, public hospitals were the most likely to offer relatively unprofitable medical and community services, followed by nonprofit hospitals and for-profit hospitals, according to the study.
The findings were similar to findings from a comparable review that took place before the federal Affordable Care Act (ACA) of 2010 was passed, according to the study.
Looking at the services of non-profit, for-profit and government hospitals in urban settings, the study could not conclude whether “one type of hospital offers a better level or a better mix of services than others “, said the study, “Hospital Service Offerings Still Differ Significantly by Property Type,” by Jill R. Horwitz and Austin Nichols. It was published by Health Affairs log.
The researchers used data from the annual membership surveys of the American Hospital Association (AHA). In addition to ownership type, they considered factors such as community demographics, hospital size, teaching status, market competition, and population.
Since 2004, “the likelihood of a hospital providing a service was strongly tied to ownership.” Nonprofit hospitals were generally larger than other types and “were more likely to provide service, regardless of profitability, than for-profit hospitals during our study period,” the report said. .
However, they found “cases of misallocation”, with shortages of relatively unprofitable services, such as inpatient psychiatric emergency care, “and surpluses of profitable services such as invasive cardiac treatment”, which regardless of the type of property.
Citing the examples of psychiatric emergency care and adult heart surgery, the study said the differences between profitable and unprofitable offerings were “significant and statistically significant”.
Non-profit hospitals are generally tax exempt. Critics argue that these hospitals are not doing enough for patients or communities to warrant this tax-exempt status.
The study noted that policymakers, the Internal Revenue Service, and some researchers focus on free or subsidized care to measure nonprofit hospitals. The authors argued that this is not the only or most important measure of the social value of nonprofit hospitals, which are primarily providers of medical care.
There may be unintended consequences when nonprofit hospitals are required to provide large amounts of free care, the study found.
With low or negative margins, nonprofits can eliminate unprofitable services that benefit poor patients. Or, nonprofit hospitals could add or expand relatively cost-effective services that increase healthcare costs and pose unnecessary risks to patients, the study found.
The authors acknowledged the limitations of the data.
For example, the relative profitability of services has not been verified. The AHA data was self-reported, and about 6% of hospitals in the sample did not report services in any given year, according to the study.
The study did not include rural hospitals or federal hospitals that serve limited populations, such as veterans, Native Americans or active duty military.