Association of Market, Mission, Operational, and Financial Factors on Hospital Acquisition Prices

Hospital financial performance in the recent recession and implications for institutions that remain financially weak

The recent recession had a profound effect on all sectors of the US economy, including health care. We examined how private hospitals fared through the recession and considered how changes in their financial health may affect their ability to respond to future industry challenges. We categorized 2,971 private short-term general medical or surgical hospitals (both nonprofit and for-profit) according to their pre-recession financial health and safety-net status, and we examined their operational status changes and operating and total financial margins during 2006-11. We found that hospitals that were financially weak before the recession remained so during and after the recession. The total margins of nonprofit hospitals (both safety-net and other institutions) declined in 2008 but returned to their pre-recession levels by 2011. The recession did not create additional fiscal pressure on hospitals that were previously financially weak or in safety-net roles. However, both groups continue to have notable financial deficiencies that could limit their abilities to meet the growing demands on the industry.

Did budget cuts in Medicaid disproportionate share hospital payment affect hospital quality of care?

BACKGROUND

Medicaid Disproportionate Share Hospital (DSH) payments are one of the major sources of financial support for hospitals providing care to low-income patients. However, Medicaid DSH payments will be redirected from hospitals to subsidize individual health insurance purchase through US national health reform.

OBJECTIVES

The purpose of this study is to examine the association between Medicaid DSH payment reductions and nursing-sensitive and birth-related quality of care among Medicaid/uninsured and privately insured patients.

METHODS

Economic theory of hospital behavior was used as a conceptual framework, and longitudinal data for California hospitals from 1996 to 2003 were examined. Hospital-fixed effects regression models were estimated. The unit of analysis is at the hospital level, examining 2 aggregated measures based on the payer category of discharged patients (ie, Medicaid/uninsured and privately insured).

PRINCIPAL FINDINGS

The overall study findings provide at best weak evidence of an association between net Medicaid DSH payments and hospital quality of care for either Medicaid/uninsured or the privately insured patients. The magnitudes of the effects are small and only a few have significant DSH effects.

CONCLUSIONS

Although this study does not find evidence suggesting that reducing Medicaid DSH payments had a strong negative impact on hospital quality of care for Medicaid/uninsured or privately insured patients, the results are not necessarily predictive of the impact national health care reform will have. Research is necessary to monitor hospital quality of care as this reform is implemented.

Mergers and acquisitions in Western European health care: exploring the role of financial services organizations

Recent policy developments in Western European health care - for example in the Netherlands - aim to enhance efficiency and curb public expenditures by strengthening the role of private sector. Mergers and acquisitions (M&As) play an important role in this respect. This article presents an analysis of 1606 acquisition deals targeting health care provider organizations in Western Europe between 1990 and 2009. We particularly investigate the role of financial services organisations as acquirers. Our analysis highlights (a) a rise of M&As in Western Europe since 2000, (b) an increase of M&As with financial service organisations acting as acquirer in absolute terms, and (c) a dominant role of the latter type of M&As in cross-border deals. To explain these developments, we make a distinction between an integration and a diversification rationale for M&As and we argue that the deals with financial services organisations in the role of acquirer are driven by a diversification rationale. We then provide arguments why health care, from the acquirer's perspective, can be considered as an interesting target in a diversification strategy and we advance reasons why health care providers may welcome this development. Although caution in drawing conclusions is needed, our findings suggest a penetration of private capital into health care provision that may be interpreted as a specific form of privatisation. Furthermore, they point to a rising internationalisation of health care. Both findings may entail far-reaching implications for health care, as they may induce both cultural privatisation and cultural internationalisation.

Providing hospice care to children and young adults: A descriptive study of end-of-life organizations

Over the past two decades, end-of-life organizations have served an increasing number of children and young adults and expanded services important to terminally ill youth, and yet we know little about these organizations. The purpose of this study was to describe the characteristics of end-of-life care organizations that admitted children and young adults to hospice care. Using data from the 2007 National Hospice and Palliative Care Organization (NHPCO) Survey, we conducted a descriptive analysis of operational, mission, market, and financial characteristics, and explored a sub-analysis by age group. Our analysis revealed that these organizations had similar profit status, ownership, and payer mix when compared to the hospice industry. However, they differed in agency type, referrals, organizational size, geographic location, team member caseload, and revenues. We also found important differences in organizations that provided hospice care by age groups (infants, toddler, school-age children, and adolescents/young adults) in geographic location, region, agency type, accreditation, and team member caseload. These findings have managerial and policy implications.