The Association Between Hospital Margins, Quality of Care, and Closure or Other Change in Operating Status
- 12 August 2011
- journal article
- Published by Springer Science and Business Media LLC in Journal of General Internal Medicine
- Vol. 26 (11), 1291-1296
- https://doi.org/10.1007/s11606-011-1815-5
Abstract
Hospitals face increased pressure to improve their quality of care in an environment of dwindling hospital payments. It is unclear whether lower hospital margins are associated with worse quality of care or closure. To determine the association of hospital margins with quality of care and changes in operating status. We conducted an observational cross-sectional study analyzing hospitals’ margin, quality of care (process quality, risk-adjusted readmission rates, and risk-adjusted mortality rates), and changes in operating status (rates of closure, merger and acquisition, and conversion to a critical access hospital) for 3,262 non-public U.S. hospitals with data from the Hospital Quality Alliance and Medicare Cost Reports. Compared to those in the bottom 10% of operating margin, those in the top 10% had higher process quality (e.g. 95.3 vs. 93.7, p = 0.002 for acute myocardial infarction [AMI]) and lower readmission rates (e.g. 19.7% vs. 22.4%, p < 0.001 for AMI). We found no association between margins and mortality rates. Hospitals in the bottom 10% were more likely than those in the top 10% to close (5.7% vs. 2.0%), merge or become acquired (4.0% vs. 0.3%), or convert to a Critical Access Hospital (5.4% vs. 0.6%). Over 15% of hospitals in the lowest decile of hospital margin changed operating status in the subsequent year. Low hospital margins are associated with worse processes of care and readmission rates and with changes in operating status. We should monitor low-margin hospitals closely for declining quality of care.Keywords
This publication has 14 references indexed in Scilit:
- Hospital financial condition and the quality of patient careHealth Economics, 2007
- Financial Indicators for Critical Access HospitalsThe Journal of Rural Health, 2006
- Snapshot Of Hospital Quality Reporting And Pay-For-Performance Under MedicareHealth Affairs, 2006
- Effect of Cuts in Medicare Reimbursement on Process and Outcome of Care for Acute Myocardial Infarction PatientsCell Metabolism, 2005
- Hospital Performance Reports: Impact On Quality, Market Share, And ReputationHealth Affairs, 2005
- Hospital Finances and Patient Safety OutcomesINQUIRY: The Journal of Health Care Organization, Provision, and Financing, 2005
- The Role of U.S. Public Hospitals in Urban HealthAcademic Medicine, 2004
- Empirical Strategies in Labor EconomicsHandbook of Labor Economics, 1999
- Hospitals with Chronic Financial Losses: What Came Next?Health Affairs, 1993
- Profits, Community Role, and Hospital Closure: An Urban and Rural AnalysisMedical Care, 1992