Sunday, August 17, 2014

More Expensive for Profit Hospitals in Red States forcing many Non-Profits to Raise Rates and Cut Services too.

Medicare needs some reform, but not the kind of cuts Paul Ryan is proposing. And the idea of making a "profit" off of sick people continues to pick up steam, even though the idea itself is repugnant and rejected worldwide. 

A recent study connected to Connecticut's debate over converting non-profit hospitals to profit revealed an interesting fact: Southern and Western red states cost Medicare more than most other Northern states that have a greater percentage of non-profit hospitals. And those non-profits are influenced by profit driven hospitals in the what they offer and what they don't. That's deadly. Check out the analysis:

Non-Profits Change Behavior to Act More Like For-Profits: As the research above notes, investor-owned hospitals focus more on profitable services than non-profit hospitals and the states dominated by for-profits have higher costs. Research also shows that the overall healthcare hospital market is impacted when for-profits are prevalent.
For example, research has demonstrated that the proximity of for-profits changes the way non-profit hospitals behave financially, as non-profits start to mimic the for-profits in an attempt to stay competitive. The Schlesinger and Gray study notes, “The more for-profit hospitals in a locality, the more nonprofit hospitals (1) respond aggressively to revenue-increasing opportunities, (2) adopt profitable services, (3) discourage admissions of unprofitable patients, and (4) reduce resources devoted to treating the patients they do admit.” Another study found that, with the exception of burn care, nonprofits are less likely to offer unprofitable services in high for-profit markets.

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