Study: For-Profit Hospitals Outperforming Non-Profit, Public Hospitals in Medicare Reimbursement Performance Measures

April 1, 2013
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According to a new study from Northwestern Medicine, for-profit hospitals have been outscoring public and non-profit hospitals on performance measures tied to Medicare reimbursement. The report, which was published recently in the Annals of Emergency Medicine ,found that the average performance scores were 50 for for-profits, 35 for nonprofit hospitals and 30 for public hospitals.

“Hospitals owned by for-profits are hitting their quality markers frequently and, therefore, will fare well under the program,” Rahul Khare, M.D., one of the study authors and assistant professor in the department of emergency medicine at Northwestern University, said in a statement. “And though nonprofit and public hospitals scored lower on quality, many won’t lose out because they are improving.”

The researchers looked at performance data from nearly 3,000 hospitals nationwide, using data from 2008 to 2010. They calculated the score for each hospital based on its performance on four different emergency department measures for stroke, heart and pneumonia. Scores for the for-profits, the researchers say, were typically driven based on achievement of quality targets. The public hospitals, on the other hand, had their scores driven on improvement rather than achievement.

“The government recognizes that some public or non-profit hospitals don’t have adequate resources and is saying, ‘if you can improve you won’t be punished for lower quality scores,’” Khare said.

The research is an early look at how hospitals may measure up in the mandatory Hospital Inpatient Value-Based Purchasing Program, from the Centers for Medicare & Medicaid Services. Hospitals will receive rewards or penalties based on scores on several publicly reported quality measures.

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