Study shows that diversity of service lines in hospitals widens gaps in care

A new study shows that for-profit hospitals are more likely to stop providing less profitable services than public and non-profit hospitals.

Public hospitals were 9 percentage points and nonprofit hospitals 6.2 percentage points more likely than comparable for-profit hospitals to offer services that are relatively unprofitable, according to the study. analysis data on 2,500 city hospitals from 2004 to 2019, published Monday in Health Affairs.

The researchers found that this variation led to a shortage of less profitable services, such as mental health care and drug treatment, and a surplus of high-revenue services, such as invasive heart surgery.

“We wanted to see how the hospital property contributed to the care. The answer should be no if you take size and location out of the equation,” he said. Jill Horwitz, Lead author from in study as well as but Professor in in university from California, los Angeles Law School. “Property matters a lot. It’s not what I expected.”

Here are five takeaways from the study:

1. Slightly more than half of the hospitals offered emergency psychiatric care, which tends to be quite unprofitable. But that burden has fallen disproportionately on non-profit and public hospitals. These hospitals were significantly more likely to offer emergency psychiatric care than commercial facilities. For-profit hospitals were also significantly less likely to offer HIV/AIDS treatment, drug treatment, hospices, and childbirth.
2. An equal share – 49% of non-profit and commercial organizations – provided adult cardiac surgery. But in general, nonprofits didn’t offer as many lucrative adult heart services as their for-profit counterparts. This may be because nonprofits lack the resources to acquire the latest equipment or hire the best doctors, Horowitz said. “We have to be careful when we tell non-profit hospitals to do things that cost them money, because that money has to come from somewhere,” Horwitz said.
3. The researchers write that not enough attention is paid to service line offerings when evaluating whether non-profit hospitals receive their tax credits. Because federal policy on non-profit hospitals primarily focuses on their responsibility to improve access for low-income people, it does not take into account that these institutions offer a wider range of services than their taxed competitors. “The way we measure community benefit is how much money they spend on providing free care or doing things that hospitals are ill-equipped to do, like shaping housing policy,” Horwitz said.
4. The researchers found no significant differences in service line offerings associated with systemic and independent hospitals.
5. According to the study, non-profit and public hospitals are more likely to replicate commercial services when commercial hospitals enter their markets. There was no reverse. “That seemed critical to me,” Horwitz said.