Josué Patien Epané

Public hospitals in financial distress: Is privatization a strategic choice?

Background: As safety net providers, public hospitals operate in more challenging environments than private hospitals. Such environments put public hospitals at greater risk of financial distress, which may result in privatization and deterioration of the safety net. Purpose: The purpose of this study was to investigate whether financial distress is associated with privatization among public hospitals. Methodology/Approach: We used panel data merged from the American Hospital Association Annual Survey, Medicare Cost Reports, Area Resource File, and Local Area Unemployment Statistics. Our study population consisted of all U.S. nonfederal acute care public hospitals in 1997 tracked through 2009, resulting in 6,426 hospital-year observations. The dependent variable “privatization” was defined as conversion from public status to either private not-for-profit or private for-profit status. The main independent variable, “financial distress,” was based on the Altman Z-score methodology. Control variables included market and organizational factors. Two random-effects logistic regression models with state and year fixed-effects were constructed. The independent and control variables were lagged by 1 year and 2 years for Models 1 and 2, respectively. Findings: Public hospitals in financial distress had greater odds of being privatized than public hospitals not in financial distress: (OR = 4.53, p < .001) for Model 1 and (OR = 3.05, p = .001) for Model 2. Practice Implications: Privatization eases access to resources and may provide financial relief to government entities from the burden of continuously funding a hospital operating at a loss, which in turn may help keep the hospital open and preserve access to care for the community. Privatizing a financially distressed public hospital may be a better strategic alternative than closure. The Altman Z-score could be used as a managerial tool to monitor hospitals’ financial condition and take corrective actions.

Community benefits provided by religious, other nonprofit, and for-profit hospitals: a longitudinal analysis 2000-2009.

Background: Nonprofit hospitals (NFPs) are expected to provide community benefits to justify the tax benefits they receive, but recent budgetary constraints have called into question the degree to which the tax benefits are justified. The empirical literature comparing community benefits provided by NFPs and their for-profit counterparts is mixed. However, NFPs are not a homogenous group and can include religious hospitals, community-owned hospitals, or academic medical centers. Purpose: This longitudinal study examines how religious hospitals compare with other NFPs and for-profit hospitals with respect to providing community benefits and how the provision of community benefits by hospitals has changed over time. Methodology: Using a pooled cross-sectional design, we examine two summated scores based on questions from the American Hospital Association annual survey that focus on community orientation among hospitals. We analyze two regressions with year, facility, and market controls to determine how religious hospitals compare with the other groups over time. Findings: Overall, 11% of U.S. hospitals are religious. Religious hospitals were more likely to engage in each individual community benefit activity examined. In addition, the mean values of community benefits provided by religious hospitals, as measured on two summated scores, were significantly higher than those provided by other hospital types in bivariate and regression analyses. Overall, community benefits provided by all hospitals increased over time and then leveled off during the start of the recent economic downturn. Practice Implications: As the debate continues regarding federal tax exemption status, policymakers should consider religious hospitals separately from NFPs. Managers at religious hospitals should consider how their increased levels of community benefits are related to their missions and set benchmarks that recognize and communicate those achievements.

Hospital cultural competency as a systematic organizational intervention: Key findings from the national center for healthcare leadership diversity demonstration project.

BACKGROUND Cultural competency or the ongoing capacity of health care systems to provide for high-quality care to diverse patient populations (National Quality Forum, 2008) has been proposed as an organizational strategy to address disparities in quality of care, patient experience, and workforce representation. But far too many health care organizations still do not treat cultural competency as a business imperative and driver of strategy. PURPOSES The aim of the study was to examine the impact of a systematic, multifaceted, and organizational level cultural competency initiative on hospital performance metrics at the organizational and individual levels. METHODOLOGY/APPROACH This demonstration project employs a pre-post control group design. Two hospital systems participated in the study. Within each system, two hospitals were selected to serve as the intervention and control hospitals. Executive leadership (C-suite) and all staff at one general medical/surgical nursing unit at the intervention hospitals experienced a systematic, planned cultural competency intervention. Assessments and interventions focused on three organizational level competencies of cultural competency (diversity leadership, strategic human resource management, and patient cultural competency) and three individual level competencies (diversity attitudes, implicit bias, and racial/ethnic identity status). In addition, we evaluated the impact of the intervention on diversity climate and workforce diversity. FINDINGS Overall performance improvement was greater in each of the two intervention hospitals than in the control hospital within the same health care system. Both intervention hospitals experienced improvements in the organizational level competencies of diversity leadership and strategic human resource management. Similarly, improvements were observed in the individual level competencies for diversity attitudes and implicit bias for Blacks among the intervention hospitals. Furthermore, intervention hospitals outperformed their respective control hospitals with respect to diversity climate. PRACTICE IMPLICATIONS A focused and systematic approach to organizational change when coupled with interventions that encourage individual growth and development may be an effective approach to building culturally competent health care organizations.

The presence of hospital-based palliative care programs: A resource dependence perspective.

Background: The presence of hospital-based palliative care programs has risen over time in the United States. Nevertheless, organizational and environmental factors that contribute to the presence of hospital-based palliative care programs are unclear. Purpose: The aim of this study was to examine the role of organizational and environmental factors associated with the presence of hospital-based palliative care programs using resource dependence theory. Methodology: Panel data from 2000 to 2009 American Hospital Association Annual Survey and the Area Resource File were used in this study. A random-effect logistic regression was used to analyze the relationship between organizational and environmental factors and the presence of hospital-based palliative care programs. Findings: Hospitals with higher Medicare inpatient days, located in counties with higher Medicare managed penetration, and larger hospitals had greater odds of having a hospital-based palliative care program. Although hospitals in counties that have a higher percentage of individuals 65 years and older, for-profit and government hospitals were less likely to have a hospital-based palliative care program. Practice Implications: Hospitals will vary in the organizational resources available to them, as such, administrators’ awareness of the relationship between resources and palliative care programs can help determine the relevance of a program in their hospital.

Blueprint for sustainable change in diversity management and cultural competence: Lessons from the National Center for Healthcare Leadership diversity demonstration project

EXECUTIVE SUMMARY How can healthcare leaders build a sustainable infrastructure to leverage workforce diversity and deliver culturally and linguistically appropriate care to patients? To answer that question, two health systems participated in the National Center for Healthcare Leadership’s diversity leadership demonstration project, November 2008 to December 2013. Each system provided one intervention hospital and one control hospital. The control hospital in each system participated in pre- and postassessments but received no preassessment feedback and no intervention support. Each intervention hospital’s C-suite leadership and demonstration project manager worked with a diversity coach provided by the National Center for Healthcare Leadership to design and implement an action plan to improve diversity and cultural competence practices and build a sustainable infrastructure. Plans explored areas of strength and areas for improvement that were identified through preintervention assessments. The assessments focused on five competencies of strategic diversity management and culturally and linguistically appropriate care: diversity leadership, strategic human resource management, organizational climate, diversity climate, and patient cultural competence. This article describes each intervention hospital’s success in action plan implementation and reports results of postintervention interviews with leadership to provide a blueprint for sustainable change.

Hospitalists as a staffing innovation: does it impact hospital efficiency?

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The Impact of Privatization on Efficiency and Productivity: The Case of American Public Hospitals

Public hospitals typically operate in more challenging environments than private hospitals. Research suggests that privatization is one of the strategies that struggling public hospitals adopt to stay competitive. The purpose of this study was to examine whether privatization of public hospitals enhances efficiency and productivity. We used a national sample of non-federal acute care public hospitals in 1997 that was tracked through 2013, resulting in a cohort of 436 hospitals (7,386 hospital-year observations). Privatization was defined as conversion from public to either private not-for-profit or private for-profit status. Efficiency was measured by current assets turnover (CATO), fixed assets turnover (FATO), occupancy rate, full-time equivalent (FTE) employees per occupied bed, and work hours per adjusted patient day. Productivity was measured by case mix adjusted admissions per FTE. We controlled for organizational and market factors. Linear regressions with hospital and year fixed-effects models were used to test the hypotheses. Privatization from public to private status was associated with increased efficiency in terms of its positive associations with CATO (β =0.63) and FATO (β =0.23) and its negative association with FTE employees per occupied bed (β =-0.93) all at (p ≤ 0.001). Privatization was associated with increased productivity (β= 0.83; p ≤ 0.001).