For-profit nursing homes and hospitals
on average provide an inferior quality of care compared with
their nonprofit peers, according to an extensive review of
studies published on Tuesday.
Authors writing in the journal Health Affairs found that a
systematic analysis of 162 studies of nonprofit versus
for-profit health care providers supports the concept that a
facility's ownership status makes a difference in outcomes and
in the cost of health care.
"Their work should lay to rest claims that little
distinguishes nonprofit versus for-profit health care,"
University of Michigan professor Jill Horwitz wrote in
editorial also running in the policy journal.
The analysis found a pattern of differences between
nonprofits and for-profits in cost, quality and accessibility,
said Bradford Gray, a principal research associate at the Urban
Institute -- a nonprofit research group -- and lead study
author.
For-profit ownership is climbing in most sectors of health,
from hospitals to hospice care. For example, for-profit
hospitals accounted for 11 percent of all hospitals in the
early 1990s and now account for 16 percent.
HCA Inc. is the biggest U.S. hospital chain, with about 180
hospitals and $24 billion in revenue, and is for- profit. The
third-biggest hospital chain by number of facilities, after the
U.S. Veterans Affairs Department, is Tenet Healthcare Corp.,
also for-profit.
In what they called the biggest review of the literature to
date, authors reported that eight studies found nonprofit
hospitals have lower mortality rates, versus one study finding
for-profits have lower rates of death.
Nonprofit hospitals are also better at keeping costs down,
the review found.
Chip Kahn, president of the Federation of American
Hospitals, which represents for-profit hospitals, attacked the
data as old and called the study politically motivated.
"These guys have manipulated the data to come up with these
conclusions," he said in an interview.
As an alternative, he cited a study by current Medicare
administrator Mark McClellan, then a Stanford University
professor, finding factors other than ownership status explain
differences in quality of care at nonprofit versus for-profit
hospitals.
For nursing homes, according to the Health Affairs report,
the majority of studies find quality of care better at
nonprofits, although for-profit nursing homes are superior at
keeping costs down.
The biggest publicly traded nursing home company is Manor
Care Inc., which owns 500 nursing homes, assisted living and
other centers for seniors.
Officials at a trade group representing the nursing home
industry declined comment.
The review comes as some lawmakers on Capitol Hill, led by
Republican Sen. Chuck Grassley of Iowa, are asking whether
nonprofit hospitals are providing enough community benefits to
justify their tax-exempt status.
Nonprofits provide benefits that are not easy to quantify,
the study argues. For example, it said, there is evidence that
for-profits are more likely to mark up prices to maximize
revenue and to have complaints lodged against them.
There is also evidence that nonprofits have a "spillover
effect" in markets where they co-exist with for-profits, the
study said. That is, they "enhance the quality and
trustworthiness" of for-profits in a given market.
The standard by which nonprofits are now judged is too
narrow, because it doesn't take into account these other
factors, the authors said.
Copyright © 2006 Reuters Limited.
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