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The objective of this study is to shed some light on quality improvement practices of for‐profit and not‐for‐profit hospitals

The scope and effectiveness of several quality improvement efforts are studied for a sample of 110 hospitals. Factor analysis was utilized to analyze the data collected.

The results of this study tended to suggest that for‐profit and not‐for‐profit hospitals were more similar than different with the regard to the effective utilization of quality improvement initiatives, thus underscoring the utility of quality improvement efforts despite differences in operating characteristics, strategies and operating constraints.

The sample used in this study is limited. Thus, the results should be interpreted accordingly.

This study offers decision‐makers in healthcare operational settings empirical evidence of the operational and strategic effectiveness of different quality improvement efforts, thus justifying investments related to the initiation and implementation of such quality improvement efforts.

This study represents an important step toward understanding the effective implementation of quality improvement initiatives in different operational settings.

Change in ownership among U.S. community hospitals has been frequent and, not surprisingly, remains an important issue for both researchers and public policy makers. In the past, investor-owned hospitals were long suspected of pursuing financial over other goals, culminating in several reviews that found few differences between for-profit and nonprofit forms (Gray, 1986; Sloan, 2000; Sloan, Picone, Taylor, & Chou, 2001). Nevertheless, continuing to the present day, several states prohibit investor-ownership of community hospitals. Conversions to investor-ownership are only one of six types of ownership change, however, with relatively less attention paid to the other types (e.g., for-profit to nonprofit, public to nonprofit). This study has two parts. We first review the literature on the various types of ownership conversion among community hospitals. This review includes the rate at which conversions occur over time, the relative frequency in conversions between specific ownership categories and the observed effects of conversion on hospital operations (e.g., strategic direction and decision-making processes) and performance (e.g., access, quality, and cost). Overall, we find that the impact of ownership conversion on the different measures is mixed, with slightly greater evidence for positive effects on hospital efficiency. As one explanation for these findings, we suggest that the impact of ownership conversion on hospital performance may be mediated by changes in the hospital's strategic content and process. Such a hypothesis has not been proposed or examined in the literature. To address this gap, we next study the role of strategic reorientation following hospital conversion in a field study. We conceptualize ownership conversion within a strategic adaptation framework, and then analyze the changes in strategy content and process across sixteen hospitals that have undergone ownership conversions from nonprofit to for-profit, public to for-profit, public to nonprofit, and for-profit to nonprofit. The field study findings delineate the strategic paths and processes implemented by new owners post-conversion. We find remarkable similarity in the content of strategies undertaken but differences in the process of strategic decision making associated with different types of ownership changes. We also find three main performance effects: hospitals change ownership for financial reasons, experience increases in revenues and capital investment post-conversion, and pursue labor force reductions post-conversion. Membership in a multi-hospital system, however, may be a major determinant of both strategy content and decision-making process that is confounded with ownership change. That is, ownership conversion may mask the impact of system membership on a hospital's strategic actions. These findings may explain the pattern of performance effects observed in the literature on ownership conversions.

The purpose of this study is to investigate how two types of drivers, namely, executive compensation and market competition, can affect hospital quality in the USA. Recently, patients, insurers and regulators have increasingly focused on hospital quality. Understanding the interplay of incentives in this industry is important because in 2019, hospital treatment contributed $1.161bn to health-care costs in the USA. This study answers the call for more studies in the so-called “mixed” industry, where ownership differences can affect organizational objectives and operating constraints.

This study explores the roles of hospital executive compensation and industry competition as determinants of health-care quality. Specifically, the study probes the heterogeneity in the factors that influence quality across hospital types in the USA.

Using California hospital data from 2006 through 2020, the findings show that the effects of compensation and competition on hospital quality differ by ownership type. Executive compensation is positively associated with quality in for-profit hospitals but is not associated with that of nonprofit hospitals, suggesting for-profit hospitals are more likely to use higher levels of compensation to attract managers with higher ability, whereas the utility function for nonprofit managers may be multidimensional. Within the nonprofit hospital group, competition is more positively associated with quality for religious nonprofits relative to secular nonprofits, suggesting that competition provides more monitoring for religious hospitals.

Taken together, the findings provide evidence that the drivers of quality vary across hospitals in ways consistent with differences in constraints and objectives across ownership types. The findings are important for regulators seeking to incentivize higher quality. For example, Medicare in the USA has incorporated quality measures into its new hospital reimbursement scheme (value-based purchasing) to incentivize quality. This study proposes that regulators should consider differences across ownership types when evaluating the best ways to incentivize hospital quality.

In 2009 and 2010, the Financial Accounting Standards Board (FASB) adopted new accounting standards for nonprofit mergers and acquisitions. The new accounting standards are an example of the constitutive role accounting can play in how people think about economic events, since the FASB defined a new concept (the “inherent contribution”) and required valuation of intangible assets that were often previously unrecognized.

The FASB’s stated goals included minimizing “pooling” accounting and maximizing transparency regarding fair value information, acquired identifiable intangible assets, and the relation between consideration paid and the fair values of identifiable assets acquired. The FASB expected many combinations would involve little or no consideration. It also expressed concern that some organizations would undervalue assets acquired, especially intangible assets.

For a sample of 2012–2017 nonprofit hospital combinations, we find general agreement with the FASB’s expectations. Almost all combinations were accounted for as acquisitions, not mergers, even though there was frequently no consideration paid. More acquirers recorded “inherent contributions” than goodwill, because the net fair value of the acquired hospital’s identifiable assets exceeded the consideration paid. Acquirers ascribed value to assets, such as intangible assets, that would have gone unreported under the prior accounting rules, although lower levels of intangible assets were recognized in nonprofit business combinations, relative to total non-goodwill assets acquired, than in public companies’ acquisitions.

The purpose of this paper is to investigate the relationship between ownership type and population health initiatives adopted by hospitals using the 2015 American Hospital Association data.

Hospitals of various sizes, ownership structures and geographic locations are represented in the survey. The outcome variables of interest include measures of hospital population health activities.

Findings indicate that nonprofit hospitals are most likely to express commitment to population health and participate in population health activities, with for-profit hospitals being least likely. Implications for policy and practice are discussed.

This study demonstrates that discrepancies in population health approaches exist across ownership status – particularly, nonprofit hospitals appear to be the most likely to be involved in population health efforts.

As we continue to push for population health management in the hospital setting, grappling with the definition and purpose of population health management will be essential.

Overall, these results suggest that nonprofit hospitals are more likely to be implementing population health efforts than for-profit or government-owned hospitals.

Although there are several studies on population health in hospitals, this study is the first to investigate the relationship between ownership type and population health initiatives adopted by hospitals.

In this paper we discuss the potential role capital markets will play in health care restructuring. According to theory, agency costs, asymmetric information and strategic interactions cause the cost of capital for nonprofit entities to slope upward. Freestanding nonprofits are particularly disadvantaged in this regard. We conclude that some organizational forms will be less viable due to problems of capital access. Empirical work examines the capital structure of nonprofit entities. Our results indicate that chain hospitals are able to access more debt, both taxable and tax-exempt, than freestanding hospitals. Capital markets also associate for profit market presence with capital risk. We conclude that freestanding hospitals are at a relative disadvantage is accessing capital markets.

Sound corporate governance is now a mainstream issue of concern in the business world. However, there has been no systematic investigation of corporate governance practices in the healthcare sector. Allowing for a distinction between two types of healthcare organizations (profit and non‐profit), this paper aims to investigate nuances in the application of sound governance principles across different types of healthcare organizations in the context of a developing country, together with differing understanding and applications of corporate social responsibility.

The paper is based on a qualitative interpretive methodology, comprising in‐depth interviews with top hospital executives drawn from 21 Lebanese hospitals representing both the profit and non‐profit varieties.

The findings suggest some basic governance differences between for‐profit and non‐profit hospitals in terms of managerial structure, ownership and the role of the board of directors, as well as differing orientations towards corporate social responsibility. There is a general lack of understanding and application of corporate governance best practices in family‐owned, for‐profit hospitals, whereas non‐profit hospitals are more in line with corporate governance best practices, and more attuned to corporate social responsibility.

This paper presents fresh insights into applications of corporate governance and corporate social responsibility principles in a very important sector that has not received systematic attention and consideration in the literature.

Hospitals are complex organisations accounting for most of total health expenditure. They play a critical role in providing care to patients with high levels of need. A key policy concern is that patients receive high quality care. Policymakers have attempted to influence hospital quality in different ways. This chapter focuses on three key policy levers: the extent to which hospital competition and higher hospital tariffs (of the DRG type) can stimulate quality, and whether non-profit hospitals provide higher or lower quality than for-profit ones. The chapter outlines key methodological challenges and selectively reviews the main findings from the literature. While several studies suggest that hospital competition reduces mortality rates for heart attack cases when hospital tariffs are fixed (under a DRG system), at this stage is unclear whether the effect holds across a range of quality indicators. Moreover, the limited literature on hospital mergers tends to suggest that hospital quality does not change following a merger. Finally, whether non-profit hospitals provide higher or lower quality varies across regions and institutional arrangements. The economic theory suggests several mechanisms with opposite effects on quality. To guide policy, future work needs to further unpack the various mechanisms through which these three key policy issues affect hospitals incentives.

Public hospitals have long been major players in the US health care delivery system. However, many public hospitals have privatized during the past few decades. The purpose of this chapter was to investigate the impact of public hospitals' privatization on community orientation (CO). This longitudinal study used a national sample of nonfederal acute-care public hospitals (1997–2010). Negative binomial regression models with hospital-level and year fixed effects were used to estimate the relationships. Our findings suggested that privatization was associated with a 14% increase in the number of CO activities, on average, compared with the number of CO activities prior to privatization. Public hospitals privatizing to for-profit status exhibited a 29% increase in the number of CO activities, relative to an insignificant 9% increase for public hospitals privatizing to not-for-profit status.

The issue of gender diversity on hospital boards plays a significant role in the financial health and clinical performance of hospitals. The purpose of this paper is to examine the determinants of gender diversity of hospital boards in Ghana. Specifically, this study examined the proportion of females on hospital boards and considered how hospital-level characteristics such as hospital size, age, location and ownership structure explain the board gender diversity of hospital boards in Ghana.

A quantitative approach based on 100 hospitals was used.

The results of the study indicate that women are represented on all hospitals with governing boards but with different proportions depending on ownership form. In all, women represent less than half of board membership. Smaller and older hospitals were found to have more female representation on their board. Also, not-for-profit mission and for-profit private hospitals tend to engage more females than their counterpart public hospitals.

The study examined female representation on hospital boards depending on only hospital-level characteristics such as hospital size, age, location and ownership. Other factors could be determining the appointment of females on hospital boards other than hospital characteristics.

Efforts on improving the role of women on hospital boards need to be encouraged.

Evidence from this study clearly suggests underrepresentation of women in the top echelons of hospitals owned by government or the state, bigger and newer hospitals.