Dynamic Equilibrium in the Hospital Industry

We present a dynamic model of the hospital industry in which nonprofit and for-profit hospitals coexist and compete and are differentiated by their objective functions, investment technologies, and taxation rates. In our model, patients differ by income and type of insurance coverage, and choose admission to their preferred hospital, while hospitals choose investment, entry, exit, and pricing strategies. We estimate the parameters of the model with aggregate data and a GMM procedure. We then use the model to examine the effects of changes in the Medicare reimbursement system, universal health-care coverage, and taxation of nonprofits.     

Hospital efficiency and equity in health care delivery: A study based in China

Hospital efficiency and equity in health care delivery are two enduring research topics. Yet little research has been done to examine the relationship between them. This paper studies the impact of hospital efficiency on equity in health care delivery based on a proprietary dataset of hospital characteristics and 630,000 inpatient records from 149 public hospitals in a representative Chinese city. To measure the hospitals' efficiencies, this study takes the hospitals' operational features and case-mix indexes into account, and computes the efficiency levels using data envelopment analysis with bootstrapping. Through regressions that control for a variety of the patients’ personal characteristics (e.g., age, disease, residence, hospital visit frequency), this study shows that the gap between hospitalization expenses of urban and rural inpatients in more efficient hospitals is smaller than those in less efficient hospitals. Thus efficiency enhances equity in expenditure between urban and rural patients. But the dwindling urban-rural gap in expenditure is achieved by raising the spending of rural patients, thereby undermining their access to health care. This pattern is more conspicuous in large and sophisticated high-tier hospitals. Further analysis shows that hospital efficiency impacts equity of health care delivery by inducing different lengths of stay and uncovered parts of total expenditure for urban and rural groups. The findings imply that an efficiency-oriented health care policy may lead to social benefit loss.     

Economic austerity and healthcare restructuring: correlates and consequences of nursing job insecurity

The healthcare system underwent considerable restructuring and downsizing in the early to mid-1990s in several countries as governments cut costs to reduce their budget deficits. Studies of the effects of these efforts on nursing staff and hospital functioning in various countries generally reported negative impacts. Healthcare restructuring and hospital downsizing is again being implemented in North America in 2009/2010 as governments struggle to reduce their deficits at a time of worldwide economic recession. The present study examines the relationship of hospital restructuring initiatives in and their link with increased threats to job security with a variety of individual and hospital outcomes in a sample of nursing staff working in hospitals undergoing significant restructuring and downsizing. Data were collected from 289 nursing staff working in California hospitals. Nurses reported a relatively large number of restructuring and downsizing initiatives. Restructuring initiatives and threats to job security accounted for a greater increment in explained variance on every outcome measure than did personal demographic factors and work situation characteristics. Threats to job security were generally associated with negative work attitudes and satisfactions, levels of psychological well-being and perceptions of hospital functioning. Some suggestions for more successful approaches to cost reductions are offered.     

Ownership effects on operating strategies: Evidence of expense-preference behavior in the hospital industry

Expense preference offers an alternative to profit-maximization theory in explaining firms' operating strategies (Williamson, 1963; Rees, 1974). Expense-preference theory suggests that when disctretionary behavior is allowed, corporate managers may choose to maximize individual utility instead of corporate profit. Expense-preference behavior tends to be evidenced by higher expenditures on items for which managers have a positive personal preference than would be justified by profit maximization. Conditions under which significant managerial discretion can emerge include weak competition, strictly controlled entry, a high degree of regulation, separation of ownership and control, and existence of a strong public interest character for the firm or industry (Awh and Primeaux, 1985; Edwards, 1977). The hospital industry may be characterized as operating under all the above conditions. Hospital ownership can be classified as being either not-for-profit or proprietary. Profit-maximization influences are generally not present in not-for-profit hospitals, thus further increasing managerial discretion with respect to operating expenses. This study provides support for the contention that expense-preference behavior exists in not-for-profit hospitals as compared to proprietary hospitals. Specifically, we present evidence of considerable managerial discretion in the allocation of resources in not-for-profit hospitals.     

Decomposing hospital productivity changes, 1985–1988: A nonparametric Malmquist approach

Annual data on U.S. hospitals from 1985–1988 are evaluated by ownership type—profit, nonprofit, state and local government, and U.S. Department of Veterans Affairs (VA)—for changes in hospital productivity over time. Distance functions are used to measure Malmquist indices of productivity change, which are then decomposed into indices of efficiency change and technology change. In contrast to previous studies using this approach, we allow for variable returns to scale and use both input and output orientations. We find that changes in technology dominate changes in inefficiency in determining changes in productivity.     

Barriers to entry in the healthcare markets: Winners and Losers from certificate-of-need laws

In states with Certificate of Need (CON) laws, medical services providers must file an application and demonstrate community need before being permitted to start or expand a service. We examine CON laws for magnetic resonance imaging (MRI), computed tomography (CT), and positron emission tomography (PET) scanners to test the hypothesis that the approval process favors established incumbent hospitals over new hospital entrants and nonhospital providers. Using Medicare claims data in 2013, we find that states with CON laws have 20 to 33% fewer providers, depending on the type of scanners to which the laws apply. As a result, residents of CON law states are 3.4–5.3 percentage points more likely to travel outside their home county to obtain imaging services than residents of non-CON states. In addition, there is a notable shift in the type of provider: CON laws are associated with 27–53% fewer scans by nonhospital providers per beneficiary, 23 to 70% fewer by new hospitals, but 6 to 21% more scans in older hospitals.     

Performance Implications of Ties to the Government and SOEs: A Political Embeddedness Perspective

In many countries governments not only regulate business activities, but also become involved in the corporate governance of individual firms through ownership and board ties. While existing studies usually focus either on benefits of political connections or on costs of government influence, a political embeddedness perspective helps us consider both advantages and constraints associated with ties to the government. In particular, firms with direct ties to the government will experience significant costs associated with government officials' involvement in the corporate governance process. In contrast, firms with ties to state‐owned enterprises (SOEs) are connected to the government indirectly and thus, while getting access to state‐owned resources, avoid costs associated with the government's interventions. This study compares the performance consequences of board and ownership ties to the government with the consequences of board and ownership ties to SOEs. I find that ties to SOEs are associated with higher profitability, while no significant differences are discovered for firms with direct ties to the government.     

Utilization control in HMOs.

Health Maintenance Organizations (HMOs) have emerged as a major vehicle to reduce transaction costs associated with defining the limits of health insurance coverage and to provide appropriate provider incentives. This article explains the heterogeneous set of incentives used by HMOs to reimburse providers and performs empirical tests of their effectiveness. The empirical analyses reveal that utilization of health care services is reduced when (1) physician compensation is based on salary or capitation arrangements rather than some measure of output; (2) bonuses and paybacks are based on individual rather than group performance; and (3) when the HMO operates as a proprietary (for-profit) organization. Utilization is not significantly affected by incentives placed on the hospital. Finally, physician ownership of the HMO was found to lead to higher levels of utilization.     

Impacts of health maintenance organization growth on community health care costs.

The paper presents a model of health maintenance organization (HMO) growth, traditional health delivery system response, and total community health care costs. Simulations using a range of assumptions about the response of government and the traditional sector to HMO growth suggest three conclusions. First, HMO growth reduces total community health costs, but a substantial fraction of HMO subscribers' savings is added to the cost of other sector subscribers. Second, HMO cost savings depend as much on HMO control of inflation rates as on control of hospital utilization. Third, while HMOs can have significant impact even when they share hospital resources with the traditional sector, HMOs must control captive hospitals in order to achieve all of their potential savings, growth, and community impact.     

Effects of healthcare quality and reimbursement rate in a hospital association

Tackling the mismatch between the supply of and demand for care service is an especially important issue among many healthcare providers and regulators. To entice patient demand distribution to become more equilibrated among different regions, some countries' governments have proposed to establish a hospital association with different levels of hospitals to implement patient mobility. However, the sustainable operation and management of the hospital association have not been formally analyzed. In this paper, we develop a Salop model to analyze the strategic behavior of patient welfare and hospital utility maximizations in a hospital association comprised of three hospitals in different income regions. For the former objective, we find that the higher quality provisions may harm patient welfare, and especially there are unique quality thresholds of the hospitals such that the higher quality provisions lead to higher patient welfare only when the quality provisions exceed the thresholds. For the latter objective, we capture the optimal equilibrium quality provisions of the overall hospital association. We consider both the case when the taxation rates are regulated (TRR) and exogenous to the hospitals and the case when taxation rates are adjusted (TRA) and constrained by hospital reimbursement rates. Under the TRA case, we find that a higher reimbursement rate of the local hospital causes a higher and lower quality threshold of the hospital in the local and neighboring regions, respectively; and we also show that with the utility maximization objective, the reimbursement rate's impact depends on regulator's altruism towards patient welfare. For a relatively low altruistic behavior, a TRA could improve the quality provision but lower the number of outflowing patients in the case of a high (and low) hospital's reimbursement rate in the local (and neighboring) region. When the regulator cares more about patient welfare, the findings in the quality provision and patient mobility are just contrary. Our analytical results lead to some important policy implications for facilitating the further deployment of hospital association delivery in the hospitals' quality provision associated with patient mobility.     

Exploring individual predictors of variation in public awareness of expressive and instrumental nonprofit brands

Expressive and instrumental functions provide a way to classify activities that take place in the nonprofit sector. These functions also provide a way to better understand individual's philanthropic involvement with certain types of nonprofit organizations. Despite the usefulness of these classifications, only a few studies have explored demographic, social, and ideological differences in individuals' philanthropic involvement along expressive and instrumental dimensions; and, no studies have explored differences in public awareness of nonprofits along these dimensions. Such awareness, though, could likely be an important precursor to an individual's philanthropic involvement. Thus, the purpose of this study is to explore whether variables known to be associated with variation in philanthropic involvement are also associated with variation in awareness of, what we categorize as, expressive and instrumental nonprofit brands. Using data from a survey of public awareness of, and attitudes toward, nonprofit organizations in San Diego County (n = 1002), our findings show that individuals are more aware of instrumental nonprofit brands than they are of expressive nonprofit brands. However, there are important individual differences to consider. We discuss the theoretical relevance of our findings and offer several practical recommendations for nonprofit administrators.     

Electronic data interchange in hospital materiel management

The survey findings reported here support the continued trend toward increasing application of computer linkages in hospital operations. A majority of the hospitals surveyed already had some sort of computer linkages with their suppliers, possibly an EOE system. There were strong indications of expanding computer linkages to other health care institutions, financial institutions, business partners (i.e., insurance companies), purchasing groups, supporting agencies (i.e., libraries, research laboratories, and counseling agencies), electronic mail, and patient billing. Private hospitals, especially nonprofit hospitals, were more aggressive in the implementation of computer linkages. The initial costs of electronic linkage systems seemed to be affordable, or well justified, as indicated by the relatively large number of medium-size hospitals already linked electronically to other institutions. Top management attention was positively related to the implementation of computer linkages to suppliers but played a lesser role in establishing other types of linkages. The overall optimism concerning future expansion of computer linkages suggests an increasingly important role for electronic linkages in materiel management.     

Analysis of different public policies through simulation to increase total social utility in a healthcare system

Public and private hospitals are seen to co-exist in several countries and they have different levels of service, waiting times and prices. Public hospitals, in general, are cheaper, but more crowded and offer lower quality service than private ones while private ones are underutilized because of the higher payments required for their services. These differences among hospitals affect patients’ choices in hospital selection and result in different levels of satisfaction in the community. Appropriate subsidy mechanisms can be developed to balance the capacity utilization of both sectors and to improve overall access to healthcare. The objective of this study is to develop an estimate of the magnitude of this improvement and differential effectiveness of various policies in achieving this improvement. For this purpose, we develop a simulation model that includes all the emergency departments of main public and private hospitals in a certain region of Turkey. We analyze the effects of different public policies on patients’ preferences regarding hospital choices and the results of these choices on social utility and public healthcare spending. Different capacity decisions, contracting and subsidy mechanisms are proposed and the optimal system parameters are determined under these mechanisms over this simulation model. After the validation and verification of the simulation model, several scenarios are designed and executed to increase social utility, decrease government expenses, improve patient satisfaction level and decrease waiting times. We compare the proposed scenarios based on multiple objective functions and present numerical results for different scenarios in this system.     

基于模糊层次分析法的公益性、基础性投资项目经济评价研究

本文针对公益性、基础性投资项目的特点,从财务评价、国民经济评价、社会经济影响评价和不确定性与风险分析等层面,构建了公益性、基础性投资项目经济评价的指标体系,运用层次分析方法(AHP),确定了各层次指标体系的权重系数,应用模糊数学方法设计了公益性、基础性投资项目经济模糊综合评价模型,在一定程度上解决了如何量化公益性、基础性投资项目经济评价中大量存在的模糊性问题。     

Fundraising for regional environmental issues: Public perceptions of who is financially responsible for the local environment

Environmental nonprofit organizations attract less than 5 % of total philanthropic giving. Given the seriousness of the environmental challenges facing the globe, it is imperative to identify barriers to and best practices in soliciting environmental giving. Past studies have identified the difficulty in soliciting funding for macro-level environmental concerns or for concerns considered to be public goods; however, little research has been conducted about giving to regional environmental concerns. Our research questions were as follows: (a) from what type of sources do residents believe environmental protection for regional environmental concerns should be funded?; (b) how willing are residents to contribute financially to regional environmental concerns?; and (c) to what extent do residents trust nonprofit organizations to address regional environmental concerns? We surveyed Florida residents (n = 548) about the conservation of the Ocklawaha River and the breaching of the Rodman Reservoir, an area with pressing environmental concerns and heavily frequented for economic and recreational use. Findings suggest that (a) participants believe government agencies, not nonprofits, should fund restoration projects, (b) participants trust nonprofits more than government to accomplish restoration goals, and (c) participants are more interested in contributing via taxes than via donations. Considerations for fundraising are discussed.     

Patient Admission Patterns and Acquisitions of "Feeder" Hospitals

Acquiring outlying community hospitals is one approach commonly used by large tertiary care hospitals to increase referrals. Sophisticated acquirers may also seek to selectively increase referrals of more profitable patients. To explore these issues, we study vertical hospital acquisitions. Using a treatment and control framework, we find that roughly 30% of vertical acquisitions lead to a significant increase in referrals. Very few result in decreases. We find that increases are concentrated among patients undergoing more profitable procedures and with more generous insurance. However, we find no evidence that hospitals shun patients with higher expected costs of care.     

非盈利组织会计模式与标准的构建

非营利组织的经营目的主要在于谋求社会利益,其经营活动介于企业的“营利”与政府的“不营利”之 间。建立非营利组织会计,既符合行为科学的观点,又能满足不同会计信息使用者的需求。非盈利组织会计模式应 当走与企业会计模式趋同化的道路,其会计标准则应当在现行事业单位会计标准的基础上修改而成。     

Bank Relationships and Private Firms’ Financial Reporting Quality

Private firms with relatively high (proprietary) costs of disclosure may benefit from a close relationship with a bank. Relationship lending is based on intertemporal contracting that assumes that the bank is able to acquire private information about the firm and, moreover, to keep this information private. For both reasons, we expect and find that private firms with fewer bank relationships exhibit lower levels of financial reporting quality. Controlling for many other factors, firms with a single bank relationship disclose their financial reports about 14 days later. The size of such firms’ financial reports is also smaller, containing approximately 8% fewer words than the median report. Firms with a single bank relationship also exhibit more earnings management, exceeding the median value of the three-year sum of absolute discretionary accruals by about 20%. The results are robust to different econometric specifications, including endogeneity concerns. They indicate that private firms choose to be opaque in the presence of fewer lending relationships.     

Are PILOTs property taxes for nonprofits?

Nonprofit charitable organizations are exempt from most taxes, including local property taxes, but U.S. cities and towns increasingly request that nonprofits make payments in lieu of taxes (known as PILOTs). Strictly speaking, PILOTs are voluntary, though nonprofits may feel pressure to make them, particularly in high-tax communities. Evidence from Massachusetts indicates that PILOT rates, measured as ratios of payments to the value of local tax-exempt property, are higher in towns with higher property tax rates: a one percentage point higher property tax rate is associated with a 0.2 percentage point higher PILOT rate. PILOTs appear to discourage nonprofit activity: a one percentage point higher PILOT rate is associated with 0.8% lower real property ownership by local nonprofits, 0.2% lower total assets, and 0.2% lower revenues of local nonprofits. These patterns are consistent with voluntary PILOTs acting in a manner similar to low-rate, compulsory real estate taxes.     

Changes in hospital efficiency and size: An integrated propensity score matching with data envelopment analysis

Turkey has made huge investments in city hospitals. The distinguishing feature of these hospitals is that they are physically large. Although many studies have investigated the efficiency of public hospitals, there are a few studies on the effect of hospital size on efficiency. This study examines the effect of hospital size on changes in public hospital efficiencies. The analysis is made up of three steps. First, using a bootstrap data envelopment analysis (DEA), the pure efficiency scores of each hospital were calculated. Second, propensity score matching (PSM) was used to ensure that any differences could be attributed to a particular class of hospital size, and not be due to differences in sample characteristics between the intervention and control groups. To highlight a potential time difference between small and large hospitals, the efficiencies of hospitals were examined from 2014 to 2017. Third, the Mann–Whitney U test was used to conduct a robustness check of the DEA and PSM results. Fourth, logistic regression was used on balanced data to examine the determinants of the efficiency of public hospitals. There are remarkable differences in the results obtained before and after matching the groups based on the bed-occupancy rate. Additionally, urban location is a key predictor of efficient and inefficient hospitals. This study also highlights that integrating DEA and PSM is a useful strategy in accurately identifying predictors of efficiencies of hospitals by creating balanced groups. Health policymakers should consider the efficiency advantages of high workload and service burden in the planning of public hospitals.