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Hospital financial condition and the quality of patient care

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  • Gloria J. Bazzoli
  • Hsueh‐Fen Chen
  • Mei Zhao
  • Richard C. Lindrooth

Abstract

Concerns about deficiencies in the quality of care delivered in US hospitals grew during a time period when an increasing number of hospitals were experiencing financial problems. Our study examines a six‐year longitudinal database of general acute care hospitals in 11 states to assess the relationship between hospital financial condition and quality of care. We evaluate two measures of financial performance: operating margin and a broader profitability measure that encompasses both operating and non‐operating sources of income. Our model specification allows for gradual adjustments in quality‐enhancing activities and recognizes that current realizations of patient quality may affect future financial performance. Empirical results suggest that there is a relationship between financial performance and quality of care, but not as strong as suggested in earlier research. Overall, our results suggest that deep financial problems that go beyond the patient care side of business may be important to prompting quality problems. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • Gloria J. Bazzoli & Hsueh‐Fen Chen & Mei Zhao & Richard C. Lindrooth, 2008. "Hospital financial condition and the quality of patient care," Health Economics, John Wiley & Sons, Ltd., vol. 17(8), pages 977-995, August.
    • Handle: RePEc:wly:hlthec:v:17:y:2008:i:8:p:977-995
    DOI: 10.1002/hec.1311
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    Cited by:

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    6. Hsueh-Fen Chen & Gloria Bazzoli & Hui-Min Hsieh, 2009. "Hospital Financial Conditions and the Provision of Unprofitable Services," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(3), pages 259-277, September.
    7. Michael Rosko & Mona Al-Amin & Manouchehr Tavakoli, 2020. "Efficiency and profitability in US not-for-profit hospitals," International Journal of Health Economics and Management, Springer, vol. 20(4), pages 359-379, December.
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    21. Sara Jamalabadi & Vera Winter & Jonas Schreyögg, 2020. "A Systematic Review of the Association Between Hospital Cost/price and the Quality of Care," Applied Health Economics and Health Policy, Springer, vol. 18(5), pages 625-639, October.

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