Abstract
BackgroundThere is growing concern certain not-for-profit hospitals are not providing enough uncompensated care to justify their tax exempt status. Our objective was to compare the amount of uncompensated care provided by not-for-profit (NFP), for-profit (FP) and government owned hospitals.MethodsWe used 2005 state inpatient data (SID) for 10 states to identify patients hospitalized for three common conditions: acute myocardial infarction (AMI), coronary artery bypass grafting (CABG), or childbirth. Uncompensated care was measured as the proportion of each hospital's total admissions for each condition that were classified as being uninsured. Hospitals were categorized as NFP, FP, or government owned based upon data obtained from the American Hospital Association. We used bivariate methods to compare the proportion of uninsured patients admitted to NFP, FP and government hospitals for each diagnosis. We then used generalized linear mixed models to compare the percentage of uninsured in each category of hospital after adjusting for the socioeconomic status of the markets each hospital served.ResultsOur cohort consisted of 188,117 patients (1,054 hospitals) hospitalized for AMI, 82,261 patients (245 hospitals) for CABG, and 1,091,220 patients for childbirth (793 hospitals). The percentage of admissions classified as uninsured was lower in NFP hospitals than in FP or government hospitals for AMI (4.6% NFP; 6.0% FP; 9.5% government; P < .001), CABG (2.6% NFP; 3.3% FP; 7.0% government; P < .001), and childbirth (3.1% NFP; 4.2% FP; 11.8% government; P < .001). In adjusted analyses, the mean percentage of AMI patients classified as uninsured was similar in NFP and FP hospitals (4.4% vs. 4.3%; P = 0.71), and higher for government hospitals (6.0%; P < .001 for NFP vs. government). Likewise, results demonstrated similar proportions of uninsured patients in NFP and FP hospitals and higher levels of uninsured in government hospitals for both CABG and childbirth.ConclusionsFor the three conditions studied NFP and FP hospitals appear to provide a similar amount of uncompensated care while government hospitals provide significantly more. Concerns about the amount of uncompensated care provided by NFP hospitals appear warranted.
Highlights
There is growing concern certain not-for-profit hospitals are not providing enough uncompensated care to justify their tax exempt status
Our study sample consisted of 188,117 patients admitted for acute myocardial infarction (AMI) to 1,054 hospitals, 82,261 patients admitted for coronary artery bypass grafting (CABG) to 245 hospitals, and 1,091,220 patients admitted for childbirth to 793 hospitals
Patients admitted to FP hospitals for AMI and CABG tended to be older than patients admitted to NFP and government owned hospitals, while patients admitted to FP hospitals for childbirth tended to be younger (P < .001 for all comparisons)
Summary
There is growing concern certain not-for-profit hospitals are not providing enough uncompensated care to justify their tax exempt status. A number of current healthcare reform proposals include legislation that would mandate that NFP hospitals provide an explicitly defined quantity of charity care (e.g., 5% of total revenue) or risk losing their tax exempt status [24,25]. Despite these concerns, there are relatively limited data comparing the quantity of uncompensated care provided by NFP, FP and government owned hospitals [26,27]. Most of the available literature comparing the quantity of uncompensated care provided by hospitals with differing ownership structure have relied upon aggregated hospital-level financial reports rather than analysis of actual patient-level insurance coverage; there are legitimate concerns about the fidelity of hospital-level financial reporting of uncompensated care given the strong existing regulatory pressures on NFP hospitals not to report excess profitability and/or exceedingly low levels of uncompensated care or risk attracting the attention of state and federal regulators [28]
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