Fears that for-profit buyers will cut care to the poor at not-for-profit hospitals they buy may be unfounded.
An independently conducted study made public last week reveals that not-for-profit hospitals acquired by for-profit companies continue to provide the same level of uncompensated care to the poor.
However, the study does suggest that the hospitals sought by for-profit companies historically provided lesser amounts of care to the poor than other not-for-profits.
"In terms of how charitable a hospital is, I think ownership distinctions are probably less important than other characteristics," said Gary Young, a Department of Veterans Affairs researcher who led the study. He's also an assistant professor at the Boston University School of Public Health. The results of the study appear in the January/February issue of the journal Health Affairs.
Acquisitions of not-for-profit hospitals by for-profit chains are triggering concerns that the healthcare industry will become less charitable. A separate debate is occurring over whether communities are compensated fairly for the loss of charitable assets in such deals. Several states are considering action on both accounts. Meanwhile, federal lawmakers are proposing legislation that would give HHS oversight on hospital conversions.
Given the evidence, efforts to mandate that for-profit chains maintain previous levels of uncompensated care might be a knee-jerk reaction to unfounded fears, Young said.
The state of Massachusetts, for example, recently announced a policy under which not-for-profit hospitals acquired by for-profit operators are required to continue their same levels of charity care in perpetuity. The Internal Revenue Service has indicated it wants to see charity-care levels continue for at least two years.
Much of the research to date on care to the poor by for-profit and not-for-profit hospitals has been financed by special-interest groups representing one side or the other.
Young examined uncompensated-care levels three years before and after a not-for-profit hospital converted to a for-profit. The study looked at 17 not-for-profit hospitals in California that were acquired by for-profit chains between 1980 and 1992.
Uncompensated care is a combination of charity care, which is care given with no expectation of payment, and bad debt, which is written off after patients fail to pay.
The study found that converted hospitals devoted about 2.9% of their gross patient revenues to uncompensated care, compared with about 2.8% before they were bought. By comparison, a control group of not-for-profit hospitals acquired by other not-for-profits saw their uncompensated-care burden inch up to 3.5% from 3.4%.
A broader study is necessary for more reliable results, he said. One flaw of current research is that it doesn't include other community benefits, such as translating services or outreach programs.