Hospital Ownership and Admission Through the Emergency Department

For-profit hospital presence has been increasing steadily over the past two decades, which may have a negative effect on patient outcomes and health care costs if profit motives influence for-profit hospitals to provide higher-cost and/or lower quality care than nonprofit and government hospitals. Anecdotal evidence suggest this may be true. Investigations by the Justice Department allege that some for-profit hospitals pressure physicians into admitting patients when it isn't medically necessary to increase profits. This paper investigates whether the empirical evidence is in line with the anecdotal evidence by investigating the relationship between hospital ownership and the decision to admit a patient through the emergency department. 

The effects of hospital ownership have been studied in the literature, but the results are mixed. Many studies find no effect on patient outcomes such as mortality or readmission, while others find negative effects. Similarly for costs, some studies find increased costs associated with for-profit hospitals while others find no differences. The evidence on responsiveness to reimbursement rates is more aligned. Studies find that for-profit hospitals are more likely to offer and perform high-tech, profitable services and are more likely to "upcode" patients into higher reimbursing diagnosis groups. The existing literature considers costs and outcomes for admitted patients only. As the emergency department (ED) is the source of more than 50% of admission it is important to determine whether ownership has any effect on admission through the ED.

This paper uses data from four sources: The State Emergency Department Databases (SEDD), the State Inpatient Databases (SID), the American Hospital Association (AHA) Annual Survey of Hospitals, and the Bureau of Health Professions' Area Resource File (ARF). The SEDD and SID provide the universe of hospital discharge records for any patient who visited an ER in 8 states between 2005 and 2013. Hospital identifiers allow these data to be merged with the AHA survey and the ARF to give rich hospital and county characteristics.

The data are used to estimate logistic regression models estimating the effect of hospital ownership on the probability of being admitted to the hospital. The model is estimated on a subset of patients who visited the ED for an injury. This is done to control for selection of patients into hospitals, as injuries are likely to be unanticipated, urgent, and non-preventable. Additionally, the severity of injury can be controlled for using the Injury Severity Score. The score takes into account the number, severity, and body region of a patient's injuries and was developed in the clinical literature to correlate linearly with mortality. Preliminary results using a subset of data suggests that patients visiting for-profit hospitals have 1.3 times the risk of being admitted versus treated and released compared to non-profit hospitals. Future analyses include identifying the effect using hospitals converting to for-profit status and difference-in-differences technique. Additionally, differential effects by patient insurance status will be estimated to determine if for-profit hospitals are more likely to admit patients with private insurance than public insurance.