Does Hospital Status Affect Performance?

Abstract

This article investigates the impact of hospital profit status on quality of care as measured by risk-adjusted, 30-day, inpatient readmission rates gathered by the Centers for Medicare and Medicaid Services. It also evaluates the association between inpatient readmission rates and market concentration, measured by the Herfindahl–Hirschman Index, and various hospital characteristics. It concludes that nonprofit (NP) hospitals have a statistically significant negative association with readmission rates because they can focus on their mission without intense pressure to make a profit. We find no significant association between quality of care and hospital market competitiveness nor any statistically significant evidence to reject the exogeneity assumption of NP status.