In the American healthcare system, not all hospitals are created equal, especially regarding the care that patients experience.
Across the United States, hospitals operate under various ownership models. Each is bound by a different set of financial and ethical obligations, and those obligations may impact how patients experience care. Between dollar-driven for-profit and patient-centered not-for-profit, does this difference in ownership structure actually affect the patient experience?
What is the Patient Experience?
The patient experience refers to an individual patient’s perception of their care. It encompasses the full range of interactions they have with the healthcare system, from nurse and doctor communication to the cleanliness of the healthcare facility.
Nationally, it is measured through the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. The HCAHPS survey is the only standardized and publicly reported patient experience data. Over 4,000 hospitals participate, and over 3 million patients complete the survey annually. This dataset provides a star rating for each patient experience domain, measured on a 0-5 scale.
Difference in Ownership Type
Private entities or corporations own for-profit hospitals and operate under a business model prioritizing cost control, financial return to shareholders, and revenue maximization. They receive funding through investments, patient fees, and insurance reimbursements.
By contrast, not-for-profit hospitals take a patient-centric approach, focusing on community service and providing access to healthcare. They are governed by boards, governments, or organizations and receive funding through charitable donations, reimbursements, and government grants.
Both models provide essential care, but their values differ.
Key Findings
On average, not-for-profit hospitals score 0.3529 stars higher than for-profit hospitals.
To explain this gap, I ran two multivariable regression models: one baseline model with only not-for-profit ownership as the independent variable and a second introducing several independent variables that could potentially influence the results. These variables included teaching status, uncompensated care burden, high disproportionate care, discharges, and the number of beds.
Even after accounting for key variables outside of ownership, not-for-profit hospitals earned 0.272 more stars than for-profit hospitals on the HCAHPS scale.
Two other statistically significant results came from teaching hospitals, which earned 0.127 more stars on the HCAHPS scale than non-teaching hospitals, and high-disproportionate care hospitals, which earned 0.613 fewer stars on the HCAHPS scale than non-high-disproportionate care hospitals.
The results of this study show evidence that hospital ownership type has a strong, independent relationship with patient experience, and the difference is not a product of structural or operational characteristics.
The control variables included in the analysis revealed essential insights about the broader determinants of the patient experience. The benefits of academia in medicine, including more time spent with patients, a culture of innovation, learning, and development, and the wide variety of services offered, result in patients having a more positive perception of their experience. On the other hand, high case complexity and greater resource constraints for patients in high-disproportionate care hospitals hurt patient experience scores.
Why This Research Matters
The patient experience is a key measure of quality that correlates with health outcomes, hospital readmissions, mortality rates, patients’ adherence to treatment, financial reimbursement, and overall trust in the healthcare system. If not-for-profit hospitals consistently outperform in this area, it raises questions about how we incentivize healthcare quality and what tradeoffs are being made under the for-profit model.
We live in a time when healthcare is becoming more corporatized, and the number of for-profit hospitals is rising. This research highlights the need to preserve the patient-centered approach to care provided by not-for-profit hospitals.
Ashley Porth is a senior at the O’Neill School of Public and Environmental Affairs, majoring in Healthcare Management and Policy with a minor in Business. Her Honors Thesis is “Hospital Ownership Matters: Understanding the Gap in Patient Experience Scores Between For-Profit and Not-For-Profit Hospitals.” Following graduation, she will begin the Commercial Development Program at GE Appliances and work toward earning her MBA.
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