May 28, 2002
A systematic review and meta-analysis of studies comparing mortality rates of private for-profit and private not-for-profit hospitals
By P.J. Devereaux, et al
Interpretation: Our meta-analysis suggests that private for-profit ownership of hospitals, in comparison with private not-for-profit ownership, results in a higher risk of death for patients.
Why is there an increase in mortality in for-profit institutions? Typically, investors expect a 10%-15% return on their investment. Administrative officers of private for-profit institutions receive rewards for achieving or exceeding the anticipated profit margin. In addition to generating profits, private for-profit institutions must pay taxes and may contend with cost pressures associated with large reimbursement packages for senior administrators that private not-for-profit institutions do not face. As a result, when dealing with populations in which reimbursement is similar (such as Medicare patients), private for-profit institutions face a daunting task. They must achieve the same outcomes as private not-for-profit institutions while devoting fewer resources to patient care.
Considering these issues one might feel concern that the profit motive of private for-profit hospitals may result in limitations of care that adversely affect patient outcomes. Our results suggest that this concern is justified. Studies included in our review that conducted an initial analysis adjusting for disease severity, and another analysis with further adjustment for staffing levels, support this explanation for our results. The private for-profit hospitals employed fewer highly skilled personnel per risk-adjusted bed. The number of highly skilled personnel per hospital bed is strongly associated with hospital mortality rates, and differences in mortality between private for-profit and private not-for-profit institutions predictably decreased when investigators adjusted for staffing levels. Therefore, lower staffing levels of highly skilled personnel are probably one factor responsible for the higher risk-adjusted mortality rates in private for-profit hospitals.
Given the differences in the organization of the Canadian and US health care systems, one might question whether our results can be applied to Canada. The structure of US health care has, however, shifted dramatically over time. With the exception of a single study, the results are remarkably consistent over time, suggesting that the adverse effect of private for-profit hospitals is manifest within a variety of health care contexts. Furthermore, whatever the context within which they function, for-profit care providers face the problem of holding down costs while delivering a profit. One would, therefore, expect the resulting problems in health care delivery to emerge whatever the setting. Finally, should Canada open its doors to private for-profit hospitals, it is the very same large US hospital chains that have generated the data included in this study that will soon be purchasing Canadian private for-profit hospitals. In summary, we think it plausible, indeed likely, that our results are generalizable to the Canadian context.
The Canadian health care system is at a crucial juncture with many individuals suggesting that we would be better served by private for-profit health care delivery. Our systematic review raises concerns about the potential negative health outcomes associated with private for-profit hospital care. Canadian policy-makers, the stakeholders who seek to influence them and the public whose health will be affected by their decisions should take this research evidence into account.
Comment: Since it was “the very same large US hospital chains that have generated the data included in this study,” shouldn’t policy makers in the United States also take this research evidence into account?