The Balance Between Financial and Quality Performance in For-Profit Hospitals versus Non-Profit Hospitals

• Main Author: Seidner, Blake
• Format: Others
• Published: Scholarship @ Claremont 2018
• Subjects: hospital; quality; TPS; for-profit; Accounting; Finance and Financial Management; Health and Medical Administration; Nonprofit Administration and Management; Strategic Management Policy
• Online Access: http://scholarship.claremont.edu/cmc_theses/1950; http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=2937&context=cmc_theses

Recent trends of financial distress for non-profit hospitals and the uptick in acquisition of these hospitals by for-profit entities indicate different focuses from the management of each type of hospital. Using data on hospital quality and basic financial measures, this study examines shift in the balance of financial and quality performance. The dataset focuses on private non-profit and for-profit hospitals with low bed counts, ranging from 50-200 total beds. Results indicate a positive relationship between for-profit status and basic financial performance measures, such as profitability, and a negative relationship with patient experience, cost reduction for the patient, and overall quality. This signals a tradeoff between financial performance and quality, especially measures relating to the customer. For-profit hospital management places more of an emphasis on the financial performance while non-profit hospital management demonstrates a balance between financial performance and high quality performance. Without being involved in hospital management decision-making, examining hospital outcomes is the best way to give insight into how hospital management is shifts performance priorities by different types of ownership.