Date of Award

Spring 5-2020

Degree Name

Doctor of Philosophy (PhD)

Advisor(s)

REBECCA WELLS, PHD

Second Advisor

SUJA RAJAN, PHD

Third Advisor

ROSS SHEGOG, PHD

Abstract

Federal policy has encouraged hospitals to provide certain quality outcomes and cost containment. Hospitals have responded by forming physician hospital organizations in attempts to achieve quality outcomes and capture reimbursements. At the same time, federal policy has awarded hospitals with nonprofit status with the requirement to provide community benefits in exchange for the tax exemption they receive. With the formation of physician hospital organizations, there remains the question of whether hospitals are achieving desired quality metrics and whether hospitals are financially viable. There is also public and media interest recently regarding whether nonprofit hospitals fulfill their obligations for community benefit in line with the large tax exemption they receive. This study attempted to understand whether the hospital physician arrangements within nonprofit hospitals influence the hospitals’ quality, financial health, and any unintended effects there may be on community benefit expenditures. Data from the American Hospital Association and the tax return 990 schedule H was used to understand the types of hospital physician arrangements and to assess whether there was an association with nonprofit spending on quality, financial health and community benefit expenditures. This study showed that there is an association with higher Acute Myocardial Infarction 30 day mortality rates and Central Line-Associated Blood Stream Infection scores with physician hospital organizations with high integration; an undesirable outcome. High integration involves more physician and hospital economic, administrative, and group involvement and more shared accountability. This study also showed that there is an association with these physician hospital organizations and lower Acute Myocardial Infarction 30 day readmission rates, higher operating margin, and higher community benefits. No clear direction is apparent for the federal government regarding payer policies causing unintended consequences regarding hospital community benefits spending; however, the formation of physician hospital organizations with high integration may not have the quality metrics desired. The federal government will have to consider its policy effects and downstream consequences and whether they may be counter-productive to community benefit expenditures or whether they even achieve their intended purposes.

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