Quality of Health Care Differences? Or not?

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So, you’ve heard me say (What?   You don’t read my blog as if I’m talking directly to you?) that there is no reason why corporations can’t be run to provide benefits to their stockholders, their employees, their community, and the world as a whole.  That is NOT the reason to start a B company.  As a matter of fact, it would be pretty neat if our corporate entities returned to that philosophy.

(As I’ve also written, Dr. Martin Feldstein proposed way back in the 70’s that corporations have no responsibility to anyone or anything except to maximize profits.  And, that led the exodus from corporate responsibility that has developed the inequalities that exist in the US and the rest of the world; it has also led to the insane multiples that CEO’s are paid compared to their own employees.  Because once the social contract was abrogated, the corporations stopped playing fair with their stockholders, too- making sure that the executive’s positions were perpetuated and that their officers received insane pay rates.)

Well, there’s a new study that made me think more about this situation.  It turns out that for profit (FP) and not-for-profit (NFP) hospitals are not all that different.   (Actually, the ones that start out for profit are different- it’s really just the entities that convert from NFP to FP that seem to fit this description.   That’s probably because the corporate culture for those that start out to make money is clearly different; changing corporate culture is tough- and takes a long time, to boot.)

The study in question was one by 3 Harvard professors- Karen Joynt (MD, MPH), E. John Orac (PhD0, and Ashish K. Jha (MD, MPH)- that was published in JAMA (the Journal of the American Medical Association.)   The study examined some 237 facilities that converted to For Profit status during the period 2003 to 2010.

Hospital Convertions NFP to FP

Not surprisingly, the operating margins clearly improved when these facilities became for profit.   They had to- since that is one of the key measures that govern profit-making enterprises.  But contrary to what we would normally expect, there were no increases in mortality rates or decreases in overall patient quality measures as a result of this change.

That’s good news.  Because one of the key factors in Obamacare (Patient Protection and Affordable Care Act- PPACA is the real name) is to change the compensation to hospitals from episodic reimbursement to the overall care provided.   To insure that hospitals don’t “pump and dump”- that they don’t treat the patient just well enough to leave the facility, only to return shortly after that- a practice that costs US taxpayers (and/or the insurance companies) more money in the process.

And, since I have been following dialysis for some 50 years now, I have seen the data in the USRDS (Unites States Renal Data System) that examines the outcomes from the plethora of dialysis centers in the US provide similar [but not identical] results.  These centers are both for profit and not-for-profit.  Interestingly, the NFP performance, as demonstrated by traditional quality indicators, are slightly better than FP (even when adjusted for age, gender, race, and dialysis therapy time).

However, a new study examining dialysis outcomes determined that geography may be more the reason why the NFP performance seems better.  This study was authored by Drs. Steven Brunelli, Steven Wilson, Mahesh Krishnan and Allen Nissenson, published in BNC Nephrology.  Instead of the normal variables chosen, the data was analyzed based upon length of ownership (of the dialysis center), vascular access, and geography.  (It should be noted that the ratio of FP to NFP patients in this study was nearly 10:1  [366011 to 34029] , which means it reflects the true reality of the business.)

What is not surprising either is that one’s socioeconomic status may have more affect on one’s health care.  There are many reasons for that- starting with access (number of practitioners, means to reach the facility, insurance coverage) and with one’s ability to easily follow the directives (lack of funds to continue therapy) adding to the situation.  At least when it comes to dialysis, there are more FP facilities in poorer locales than NFP units.

These findings have tremendous import to Medicare and to those providing reimbursement rates under Obamacare.  Because geography may make a difference for non-dialysis care, too!

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