Featured Research

from universities, journals, and other organizations

Survival of safety-net hospitals at risk

Date:
September 20, 2012
Source:
Penn State
Summary:
Many public safety-net hospitals are likely to face increasing financial and competitive pressures stemming in part from the recent Supreme Court decision on the Affordable Care Act, according to researchers.

Many public safety-net hospitals are likely to face increasing financial and competitive pressures stemming in part from the recent Supreme Court decision on the Affordable Care Act, according to researchers at Penn State and the Harvard School of Public Health.

"The issue for these hospitals going forward is that the Affordable Care Act promises to change how care for low-income and uninsured populations is funded, potentially reshaping the competitive landscape," said Jonathan Clark, Penn State assistant professor of health policy and administration. "Our research suggests that adapting to these changes may be a struggle for some public safety-net hospitals."

Safety-net hospitals provide a disproportionate share of charity and under-reimbursed care to uninsured and low-income populations. They often tailor their services to meet the special needs of these populations, and they frequently provide needed, but unprofitable, services, such as regional trauma and inpatient mental health services.

Working with Nancy Kane, professor of management and associate dean for educational programs, and Sara Singer, assistant professor, both at the Harvard School of Public Health, among others, Clark analyzed the financial performance and governance of 150 safety-net hospitals between 2003 and 2007. The team of researchers categorized the hospitals into governance types -- directly controlled public, delegated public authority, private nonprofit and private for-profit. The team then analyzed the relationship between governance type and profitability.

"We found, counter-intuitively, that public hospitals directly controlled by governments, especially those in highly competitive markets, were more profitable than other safety-net hospitals," Clark said.

Seeking to better understand these findings, the research team chose two highly profitable hospitals and one less profitable hospital in each governance category and conducted site visits to gather more detailed information on the governance and financial strategies of safety-net hospitals. The additional data suggested that the successful public hospitals overlooked important governance and management practices and were financially healthy primarily because they were able to obtain substantial subsidies from state and local governments, such as property tax transfers or supplemental Medicaid payments, including disproportionate share (DSH) payments.

The results are published in a recent issue of Health Affairs.

"These findings are important because of the context in which we find ourselves," Clark said. "The economic downturn, slow recovery and politics of deficit reduction have eroded the ability of governments -- especially local governments -- to support the safety net. Couple that with the expected changes in safety-net funding from the Affordable Care Act, and safety-net hospitals, especially those that rely on direct public subsidies, face a new market dynamic. The question is whether and how they can adapt to this new reality. Our findings suggests that because many of these public hospitals lack the governance and management practices that have enabled private safety-net hospitals to thrive in the absence of subsidies, they will need to transform their organizations in order to sustain themselves financially."

Other authors on the paper include Kristof Eeckloo, academic policy advisor at Ghent University Hospital, and Melissa Valentine, graduate student in health care management and policy at Harvard University.

The Commonwealth Fund supported this study.


Story Source:

The above story is based on materials provided by Penn State. Note: Materials may be edited for content and length.


Cite This Page:

Penn State. "Survival of safety-net hospitals at risk." ScienceDaily. ScienceDaily, 20 September 2012. <www.sciencedaily.com/releases/2012/09/120920135613.htm>.
Penn State. (2012, September 20). Survival of safety-net hospitals at risk. ScienceDaily. Retrieved July 22, 2014 from www.sciencedaily.com/releases/2012/09/120920135613.htm
Penn State. "Survival of safety-net hospitals at risk." ScienceDaily. www.sciencedaily.com/releases/2012/09/120920135613.htm (accessed July 22, 2014).

Share This




More Health & Medicine News

Tuesday, July 22, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Gilead's $1000-a-Pill Drug Could Cure Hep C in HIV-Positive People

Gilead's $1000-a-Pill Drug Could Cure Hep C in HIV-Positive People

TheStreet (July 21, 2014) New research shows Gilead Science's drug Sovaldi helps in curing hepatitis C in those who suffer from HIV. In a medical study, the combination of Gilead's Hep C drug with anti-viral drug Ribavirin cured 76% of HIV-positive patients suffering from the most common hepatitis C strain. Hepatitis C and related complications have been a top cause of death in HIV-positive patients. Typical medication used to treat the disease, including interferon proteins, tended to react badly with HIV drugs. However, Sovaldi's %1,000-a-pill price tag could limit the number of patients able to access the treatment. TheStreet's Keris Lahiff reports from New York. Video provided by TheStreet
Powered by NewsLook.com
$23.6 Billion Awarded To Widow In Smoking Lawsuit

$23.6 Billion Awarded To Widow In Smoking Lawsuit

Newsy (July 20, 2014) Cynthia Robinson claims R.J. Reynolds Tobacco Company hid the health and addiction risks of its products, leading to the death of her husband in 1996. Video provided by Newsy
Powered by NewsLook.com
Tooth Plaque Provides Insight Into Diets Of Ancient People

Tooth Plaque Provides Insight Into Diets Of Ancient People

Newsy (July 19, 2014) Research on plaque from ancient teeth shows that our prehistoric ancestor's had a detailed understanding of plants long before developing agriculture. Video provided by Newsy
Powered by NewsLook.com
Contaminated Water Kills 3 Babies in South African Town

Contaminated Water Kills 3 Babies in South African Town

AFP (July 18, 2014) Contaminated water in South Africa's northwestern town of Bloemhof kills three babies and hospitalises over 500 people. The incident highlights growing fears over water safety in South Africa. Duration: 02:22 Video provided by AFP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins