2006 December 13 Wednesday
Non-Profit Hospitals Provide Better Care

The profit motive is not entirely compatible with optimal delivery of medical care.

BOSTON-December 11, 2006 - Patients are more likely to receive high quality of care in not-for-profit hospitals and in hospitals with more registered nurses and advanced technology, reports a comprehensive Harvard Medical School (HMS) analysis published in the Dec. 11 Archives of Internal Medicine.

Anyone surprised? I'm not. Quality of care is hard for patients to measure. So the market is not very good at rewarding those who deliver higher quality care. The profit motive is not sufficiently well disciplined by the market in the medical marketplace.

Bruce Landon, MD, MBA, associate professor of health care policy at HMS, and colleagues found that overall, not-for-profit hospitals consistently performed better than for-profit hospitals when it came to delivering high-quality care for three common medical conditions: congestive heart failure (CHF); heart attack (acute myocardial infarction, AMI); and pneumonia. Hospitals with higher registered nurse staffing levels, more advanced technology, and federal or military designation all had high performance.

"Our study is the first to comprehensively examine the characteristics of hospitals that are associated with higher quality of care for these three important medical conditions," said Landon, who is also an associate professor of medicine at HMS and Beth Israel Deaconess Medical Center.

This study assessed the quality of care for CHF, AMI, and pneumonia in more than 4,000 hospitals in the U.S. that reported data to the Joint Commission on Accreditation of Healthcare Organizations or the Center for Medicare and Medicaid Services. Since the Medicare Modernization Act of 2003, hospitals have been required to report their performance on 10 measures in the areas of CHF, AMI, and pneumonia in order to receive their full Medicare payment update. The study also examined what hospital characteristics (such as ownership, size, location, teaching status, and proportion of Medicare or Medicaid admissions) were associated with high-quality performance.

Non-profits and military hospitals scored highest.

Overall, 76 percent of patients hospitalized with CHF, AMI, or pneumonia received recommended care. To assess this, Landon and colleagues evaluated how many patients received appropriate care across all of the measures for the three medical conditions.

Not-for-profit hospitals consistently performed better than for-profit hospitals for each condition, and federal and military hospitals had the highest performance.

A Congressional alliance called "The Promise Keepers" have caused a huge surge in spending for the Veterans Administration in the last several years. I suspect the huge piles of dollars spent on the VA have caused some of the high performance reported here.

I suspect that VA doctors might be more amenable than more independent private practice doctors to attempts by administrators to encourage the following of best practices. A lot of best practices (e.g. give aspirin to heart attack patients) are not difficult to understand. But they require discipline and a willingness to follow checklists.

"Because a large portion of federal and military hospitals are part of the Veterans Health Administration, this suggests that lessons learned from their decade-long experience in quality improvement deserves further study," said Landon. "It seems likely that the information technology and computerized reporting systems at the VA contributed to their high performance."

Hospitals with lots of poor patients deliver lousier care. It pays to live in affluent areas so that your hospitals have lots of paying customers.

Hospitals that served greater proportions of Medicaid patients had low quality of care across all conditions studied. Hospitals in the Midwest and Northeast, not in rural areas, had better performance, as did hospitals with more advanced technology available.

We'll get better care when computers track care and provide more guidance on what are best practices and when they are being followed.

Share |      By Randall Parker at 2006 December 13 11:14 PM  Economics Health

Tony said at December 14, 2006 7:15 AM:

Once again Randall shows the blessings of a non-idealogical mindset. Yes, the public sector usually does a lousy job, but, as he says, health care and the profit motive dont match. Countries like France and Sweden provide 100% cover for everyone at per capita costs about half those of the US. Hpowever, the huge wave of immigrants is putting their systems under increasing strain. The UK's once-wonderful NHS system has all but collapsed for the same reasons.

Ivan said at December 14, 2006 4:41 PM:

Private health care doesn't really exist in the US. Folks are very locked in a model of 3rd party payment systes. Regulation abounds. Restriction of practice through licensure requirements is huge.

I don't doubt these results could be correct. But to blame profit motive in an industry to far removed from a free market is a bit silly.

Quequeg said at December 14, 2006 9:55 PM:

I've read that the VA Hospitals have an advantage in that they know they will have their patients for life. So, there's an incentive to invest in preventative care.

But private insurance companies don't have as much incentive to invest in prevention, because people can easily switch from one insurance company to another.

Also, technology can really help. There's some award that's given every year, for hospitals who have made big improvements in quality. Several years ago, one award-winning hospital introduced putting barcodes on patient's wrists. Then, the nurses can scan the medicine bottles and the patients' barcdodes in order to make sure they've matched the right dosage/medication with the right patient.

There'd be fewer lawsuits, if hospitals made fewer mistakes (although there are many frivolous lawsuits).

Also, it's hard to get the pricing of medical services, especially when the cost may be different for different insurance companies. And if you have a medical emergency, you don't have time to shop around.

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