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Mark Schlesinger and Bradford H. Gray How Nonprofits Matter In American Medicine, And What To Do About It Health Affairs, July/August 2006; 25(4): w287-w303. [Abstract] [Full Text] [PDF] [Online Technical Appendix][Table of Contents][Erratum] [Reprints & Permissions]

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Electronic letters published:

If Not-For-Profits Are Indeed Better, Why Is That The Case?

Stephen Miller   ( 23 June 2006 )

Another Perspective on Nonprofit Health Care

Howard Berman   ( 27 June 2006 )

Study Lacks Original Research, Fresh Focus

Charles N. Kahn III   ( 6 September 2006 )

Problems with Some Studies on the Benefits of Nonprofit Hospitals

William G. Kelly Jr.   ( 13 February 2008 )

If Not-For-Profits Are Indeed Better, Why Is That The Case? 23 June 2006
Stephen Miller, CEO Bridgemark Healthcare Send letter to journal: Re: If Not-For-Profits Are Indeed Better, Why Is That The Case? steve.miller{at}bridgemarkhealthcare.com Stephen Miller	I must say that my antennae were vibrating instantly when I saw that the abstract for this article began with, "Skeptics question..." One of the hallmarks of critical reading is to be on the alert for signs that an author brings an agenda to his research; this certainly flags the article as such. My chief question, bordering on a criticism, is this: Did the authors attempt to distinguish the impact of corporate form (not-for-profit versus for-profit) from the impact of available funding? Specifically, does the methodology of this review rule out that whoever is spending the most money on care provides the best care? Let us put forward this hypothesis: that the average not-for-profit achieves the same outcomes -- in terms of quality of care, distribution of access to services in the community, etc. -- as does a for-profit spending the same amount. Does the authors' study rule this out? I cannot see anywhere that it does. If this hypothesis cannot be ruled out, then the better conclusion may be that more spending leads to better outcomes, and that corporate form does not matter. In the market area in which my company operates, not-for-profits tend to be sponsored by charitable organizations (church-based or otherwise); their operations tend to be subsidized by the sponsoring organization; and they tend to serve a lesser percentage of indigent residents. I would venture to say that they spend more on care as result. I would even concede that they may produce better outcomes. But is it because they are not-for-profit? Or could almost anyone blessed with such an operating budget do as well? It's a good question, one that I hope these authors address in their next report.
Another Perspective on Nonprofit Health Care 27 June 2006
Howard Berman, Board Chair Alliance for Advancing Nonprofit Health Care Send letter to journal: Re: Another Perspective on Nonprofit Health Care howard.berman{at}lifethc.com Howard Berman	Mark Schesinger and Brad Gray are to be commended for making clear through their analysis of the research literature that nonprofit health care organizations provide a variety of benefits beyond indigent care to their communities, some not easily measured. Particularly telling are the findings that, compared to for-profits, they are more trustworthy and more innovative, and less likely to: make misleading claims, treat vulnerable patients differently, mark up prices, and otherwise maximize revenues. While clearly not perfect, the nonprofit health care sector is behaving in precisely the kinds of ways that we as a society want it to. You can’t put a simple price tag on such behaviors, as Perspectives by David Hyman and William Sage and by Gregg Bloche would suggest. In her Perspective, Jill Horwitz recognizes the pitfalls of quantitative tests for ensuring public accountability: “Much of what we want our health care organizations to do is hard to define and hard to measure.” Does the nonprofit health sector need to work better? Are some behaving better as nonprofits than others? Absolutely. The entire health care system must be made more accountable. Simplistic formulas are not the answer. The answer is greater transparency and public disclosure. Schlesinger and Gray argue that reporting requirements don’t go far enough because reports might sit on shelves, unread and unused. I disagree. If government officials or communities care, and most do, they will demand and read the reports, and they will raise questions and concerns where they feel necessary. If they don’t care, they deserve what they get. The key to improved accountability is improved governance. If boards know that they must report timely, clear information to the public about their finances, community benefits, and key operational matters -- and attest to the validity of that information -- they will demand the same of their chief executives. They will work hard, and the days of honorific boards will be over. The court of public opinion will deal with most bad behavior. The last resort can always be more regulation.
Study Lacks Original Research, Fresh Focus 6 September 2006
Charles N. Kahn III, President Federation of American Hospitals Send letter to journal: Re: Study Lacks Original Research, Fresh Focus ckahn{at}fah.org Charles N. Kahn III	This article concludes, properly, that an appropriate mix of investor-owned and not-for-profit hospitals provides important benefits to community health care. Regrettably, to reach this conclusion, the authors build the case for not-for-profit community hospitals by denigrating investor-owned facilities. What is particularly disappointing is that they provide no original peer-reviewed research and instead rely upon selective reports of others, some nearly 30 years old, some not even about community hospitals, and some certainly conducted by individuals with an obvious political agenda, all of which are given equal weight in their analysis. This calls into question the appropriateness of meta-analyses for this type of analytical work. But what is most troubling is that in choosing to fixate upon the rear-view mirror of hospital ownership, and the false dichotomy of “investor owned/not-for-profit,” the authors fail to see what lies just ahead: the looming threat that physician-owned limited service facilities pose to the very existence of full-service community hospitals -- investor-owned and not-for-profit alike -- and to the community benefits they both provide. If Schlesinger and Gray are concerned with community benefit, they would do well to objectively examine physician-owned specialty hospitals. Numerous reports indicate that overall, these limited-service facilities provide virtually no charity care, limited care for Medicaid beneficiaries, and far fewer emergency services, and they “cherry-pick” the healthiest and wealthiest patients in their communities. This is the real threat to the ability of our classic community hospital -- regardless of ownership -- to continue to provide meaningful community benefit. To remain relevant, the authors must grasp how the debate about community benefit has fundamentally shifted and refocus their energies accordingly.
Problems with Some Studies on the Benefits of Nonprofit Hospitals 13 February 2008
William G. Kelly Jr., Western Representative Center for Regulatory Effectiveness Send letter to journal: Re: Problems with Some Studies on the Benefits of Nonprofit Hospitals wgkelly{at}tetontel.com William G. Kelly Jr.	Persistent government interest in hospital tax exemptions prompted the Center for Regulatory Effectiveness (CRE) to examine carefully this oft- cited study, to see whether it would meet Data Quality Act (44 U.S.C. § 3516, note) requirements for use by federal agencies. We also examined two studies by Devereaux et al. (CAMJ 2004 and 2002) relied on by findings of Schlesinger and Gray. The CRE's interest is ensuring the quality of data and analysis supporting regulations, and it has no policy position on the tax exemption issue. The Schlesinger-Gray study concluded that nonprofits provide higher-quality, less expensive care, and more uncompensated care, than for-profits. All of the studies claimed to be based on comprehensive and sound epidemiologic meta-analysis; however, the CRE review, available at http://www.thecre.com/pdf/IRSsubmissionfin_5_1_07.pdf, found substantial data quality deficiencies. A principal problem detailed by the CRE was Schlesinger and Gray's use of unreliable "vote-counting" as a meta-analytic method, in which studies were given equal weight regardless of their relative strength and quality. The study also counted studies that were outdated (covering periods 20-30 years ago), lacked relevance (e.g., use of nursing home, managed care, and psychiatric facility studies), or were contrary to other studies that were not included. In all three studies, the CRE found failure to give due weight to important factors such as study heterogeneity, hospital location, and socioeconomic status of patients. The statistical results in the CAMJ studies were extremely weak and fragile, and their conclusions were overstated. The CRE concluded that the studies do not meet DQA standards and would have to be rejected for use by a federal agency. The CRE analysis illustrates the need to give careful scrutiny to claims made by participants in this debate that even a peer-reviewed study is a reliable basis for policy decisions.