Determinants of Operational and Financial Performance and Market Concentration for Not-For-Profit Hospitals
Jomon Aliyas Paul, Benedikt Quosigk and Leo MacDonald
Coles Working Paper Series, SPRING16-05, March 2016
Drawing on data from the American Hospital Association, Center for Medicare and Medicaid Services, and Internal Revenue Service Form 990, we search for determinants of not-for-profit (NP) hospital performance. We evaluate the impact of various factors to determine key aspects of effective financial and operational practices in NP hospitals. Specifically, we attempt to identify and evaluate key characteristics of NP hospitals that impact their financial performance and market concentration, as well quality of care measures including inpatient length of stay (LOS), mortality rate, market concentration measured by Herfindahl-Hirschman Index, and return on assets. The goal is to provide valuable insights for hospital administrators and policy makers, and lead to better efficiencies and reduced service costs. We find that high indigent patient population percentages and less independent boards can negatively impact NP performance, whereas higher levels of contributions are positively related to NP’s financial health. Factors such as hospital size and indigent Medicare population percentage have positive impacts on quality of care with regard to mortality rate. Other factors, including median income, Governor’s party affiliation, and population health status significantly impact at least one of the variables in each of the categories (quality of care, financial performance, and market concentration). Overview
22 | Coles Working Paper
Made with FlippingBook - Online catalogs