Kelly Noe

Economic incentives in the hospice care setting: A comparison of for-profit and nonprofit providers

We examine the association of for-profit (FP) and nonprofit (NP) economic incentives in hospice care providers with financial and nonfinancial metrics of management performance. Controlling for quality of patient care and differences in cost-efficiency, we find that FP providers (1) selectively admit patients with longer life-prognoses and billable days and hence lower average costs per day, (2) employ a lower average cost/skill mix of workers, and (3) have higher CEO compensation and profit. The NP providers admit more patients with the less profitable life-prognoses attributes, have lower CEO compensation, and reinvest their net earnings under the non-distribution constraint. While the profit incentive may be needed to attract providers into this rapidly growing and underserved market, the NP providers return a lower cost per patient served from the taxpayers perspective.

Earnings management in non-public companies: the case of for-profit hospice organizations

We examine earnings management in non-publicly listed companies, with a focus on for-profit (FP) hospice organizations, and extend the accounting earnings management literature to the hospice industry. FP hospice organizations file Medicare cost reports that include complete financial statements not otherwise publicly available. Managers of FP hospice organizations have incentives to manage earnings to increase performancebased bonuses, meet or beat bond covenant requirements, or avoid public scrutiny. We find total accruals are significantly positively associated with profitability, debt, and size factors. However, discretionary accruals are significantly negatively associated with debt and size, but not profitability. Thus, monitoring and political cost factors appear to effectively mitigate earnings management in this industry sector.

Charitable contributions and quality in the US hospice care setting

This paper examines the association of charitable donations with quality of care proxies for nonprofit hospice providers in the United States (US). An estimated 1.45 million patients received hospice care in the US in 2008. Medicare hospice spending exceeded

New requirements for hospitals to maintain tax-exempt status.

10 billion in 2007 and is expected to more than double over the next 10 years. Using Guidestar and Medicare Hospice Cost Report data, we find donations are positively associated with proxies for nurse and social worker quality of care, but not with our home-health aide quality proxy. This research adds to our understanding of charitable contributions in hospice provider organizations.