Nonpatient revenues in hospitals

Non-operating revenue is an important source of funding for rural hospitals, especially those that are government-owned

PURPOSE

Non-operating revenue (NOR), derived from investments, contributions, government appropriations, and medical space rentals, can contribute to financial stability of hospitals by offsetting operating losses and improving profitability. NOR might benefit rural hospitals that often face intense financial pressures. However, little is known about how much rural hospitals rely on NOR and if certain organizational characteristics are associated with differences in NOR.

METHODS

Healthcare Cost Report Information System data from 2011 to 2019 were used to analyze sources of revenue among Critical Access Hospitals (CAHs) and Rural Prospective Payment System (R-PPS) hospitals through descriptive statistics and regression models. Reliance on NOR was measured by the percentage of total revenue from non-operating sources.

FINDINGS

Results indicate that both CAHs and R-PPS hospitals rely on NOR; however, CAHs have a higher percentage of total revenue derived from non-operating sources (3.2%) as compared to R-PPS hospitals (1.9%) (p < 0.001). Government-owned hospitals have significantly higher reliance on NOR than other ownership types. System affiliation also influences reliance on NOR. Lastly, results suggest that NOR may play a role in improving overall profit margins.

CONCLUSIONS

As rural hospitals disproportionately face challenges related to declining profitability and the risk for closure, they may rely on NOR to continue to strengthen financial performance and provide health care to their communities. However, NOR is not guaranteed, and reliance on NOR further reiterates the value of stable, adequate reimbursement to guard against fluctuations in NOR.

A text mining study of topics and trends in health care management journals: 1998-2018

BACKGROUND

Advances in natural language processing and text mining provide a powerful approach to understanding trending themes in the health care management literature.

PURPOSE

The aim of this study was to introduce machine learning, particularly text mining and natural language processing, as a viable approach to summarizing a subset of health care management research. The secondary aim of the study was to display the major foci of health care management research and to summarize the literature's evolution trends over a 20-year period.

METHODOLOGY/APPROACH

Article abstracts (N = 2,813), from six health care management journals published from 1998 through 2018 were evaluated through latent semantic analysis, topic analysis, and multiple correspondence analysis.

RESULTS

Using latent semantic analysis and topic analysis on 2,813 abstracts revealed eight distinct topics. Of the eight, three leadership and transformation, workforce well-being, and delivery of care issues were up-trending, whereas organizational performance, patient-centeredness, technology and innovation, and managerial issues and gender concerns exhibited downward trending. Finance exhibited peaks and troughs throughout the study period. Four journals, Frontiers of Health Services Management, Journal of Healthcare Management, Health Care Management Review, and Advances in Health Care Management, exhibited strong associations with finance, organizational performance, technology and innovation, managerial issues and gender concerns, and workforce well-being. The Journal of Health Management and the Journal of Health Organization and Management were more distant from the other journals and topics, except for delivery of care, and leadership and transformation.

CONCLUSION

There was a close association of journals and research topics, and research topics evolved with changes in the health care environment.

PRACTICE IMPLICATIONS

As scholars develop research agendas, focus should be on topics important to health care management practitioners for better informed decision-making.

Identifying competitive strategies to improve the performance of hospitals in a competitive environment

Background

This study is based on competitive dynamics theory, and discusses competitive actions (including their implementation requirements, strategic orientation, and action complexity) that influence hospitals’ performance, while also meeting the requirements of Taiwan’s “global budget” insurance payment policy.

Methods

In order to investigate the possible actions of hospitals, the study was conducted in two stages. The first stage investigated the actions of hospitals from March 1 to May 31, 2009. Semi-structured questionnaires were used, which included in-depth interviews with senior supervisors of 10 medium- and large-scale hospitals in central Taiwan. This stage collected data related to the types of actions adopted by the hospitals in previous years. The second stage was based on the data collected from the first stage and on developed questionnaires, which were distributed from June 29 to November 1, 2009. The questionnaires were given to 20 superintendents, deputy superintendents, and supervisors responsible for the management of a hospital, and focused on medical centers and regional hospitals in central Taiwan in order to determine the types and number of competitive actions.

Results

First, the strategic orientation of an action has a significantly positive influence on subjective performance. Second, action complexity has a significantly positive influence on the subjective and the objective performance of a hospital. Third, the implementation requirements of actions do not have a significantly positive impact on the subjective or the objective performance of a hospital.

Conclusion

Managers facing a competitive healthcare environment should adopt competitive strategies to improve the performance of the hospital.

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.

Facing the recession: how did safety-net hospitals fare financially compared with their peers?

OBJECTIVE

To examine the effect of the recession on the financial performance of safety-net versus non-safety-net hospitals.

DATA SOURCES/STUDY SETTING

Agency for Healthcare Research and Quality Hospital Cost and Utilization Project State Inpatient Databases, Medicare Cost Reports, American Hospital Association Annual Survey, InterStudy, and Area Health Resource File.

STUDY DESIGN

Retrospective, longitudinal panel of hospitals, 2007-2011. Safety-net hospitals were identified using percentage of patients who were Medicaid or uninsured. Generalized estimating equations were used to estimate average effects of the recession on hospital operating and total margins, revenues and expenses in each year, 2008-2011, comparing safety-net with non-safety-net hospitals.

DATA COLLECTION/EXTRACTION METHODS

1,453 urban, nonfederal, general acute hospitals in 32 states with complete data.

PRINCIPAL FINDINGS

Safety-net hospitals, as identified in 2007, had lower operating and total margins. The gap in operating margin between safety-net and non-safety-net hospitals was sustained throughout the recession; however, total margin was more negatively affected for non-safety-net hospitals in 2008. Higher percentages of Medicaid and uninsured patients were associated with lower revenue in private hospitals in all years, and lower revenue and expenses in public hospitals in 2011.

CONCLUSIONS

Safety-net hospitals may not be disproportionately vulnerable to macro-economic fluctuations, but their significantly lower margins leave less financial cushion to weather sustained financial pressure.

Trends in asset structure between not-for-profit and investor-owned hospitals

The delivery of health care is a capital-intensive industry, and thus, hospital investment strategy continues to be an important area of interest for both health policy and research. Much attention has been given to hospitals' capital investment policies with relatively little attention to investments in financial assets, which serve an important role in not-for-profit (NFP) hospitals. This study describes and analyzes trends in aggregate asset structure between NFP and investor-owned (IO) hospitals during the post-capital-based prospective payment system implementation period, providing the first documentation of long-term trends in hospital investment. The authors find hospitals' aggregate asset structure differs significantly based on ownership, size, and profitability. For both NFP and IO hospitals, financial securities have remained consistent over time, while fixed asset representation has declined in IO hospitals.