Does Quality of Care Differ Between For-Profit and Non-Profit Healthcare Facilities?

A recent New York Times article examined some of the differences in services between for-profit and non-profit nursing homes. Some research over the past few decades has suggested that for-profit facilities, by seeking to minimize expenses, may be at a disadvantage to nonprofit facilities in terms of quality of care. The article cites a handful of academic papers in support of this argument, which is certain to generate controversy for its criticism of the private sector. As nursing home injury attorneys, we are interested in whether a nursing home’s for-profit or non-profit status affects its duty of care to its residents. Under federal laws and the laws of the state of Maryland, it makes no difference when it comes to a nursing home’s professional obligations.

Eduardo Porter, writing for the New York Times, discussed a study performed in 1984 by two researchers, Bonnie Svarstad and Chester Bond, at the University of Wisconsin-Madison’s School of Pharmacy. The paper, entitled “The Use of Hypnotics in Proprietary and Church-Related Nursing Homes,” is not currently available online, but was cited in a 1988 book, The Nonprofit Economy, by the economist Burton Weisbrod. Svarstad and Bond examined the use of sedatives at for-profit “proprietary” nursing homes and non-profit nursing homes affiliated with churches. They reportedly found that both types of facilities prescribed drugs for their patients at about the same rate, but that the proprietary facilities prescribed doses that were, on average, around four times larger than the dosages at the non-profit facilities. Weisbrod interpreted these figures in stark economic terms, arguing that medications are less expensive than staff, and it is more cost-effective to sedate a patient than to employ caregivers to offer individual attention.

Svarstad and Bond’s paper does not seem to have reached conclusions beyond the difference in dosage sizes between the two types of facilities. Porter cites additional research, however, that makes more direct connections between the profit motive of a facility and the quality of care it provides. An article (PDF file) published in the RAND Journal of Economics in Autumn 2002 described an examination of how the quality of care in hospitals changed as certain hospitals converted from non-profit to for-profit status, and also from for-profit to non-profit. The researchers found that, while profitability of for-profit hospitals increases during the first two years, mortality of patients also increases while the number of hospital staff decreases. After two years, the article states, the quality of care decreases at a lower rate. The researchers did not find a comparable decline in the hospitals converting to non-profit status.

Many medical professionals, such as doctors, nurses, and nursing home administrators, obtain professional licenses individually. Their duty of care to patients is independent of the identity or nature of their employer. Facilities that provide health care services must also obtain licensing from the state, and facilities that accept payment through Medicare and Medicaid must abide by various federal regulations. These obligations apply whether the facility is profit-seeking or not. Future nursing home residents and their families, when deciding on a facility, should consider how, and whether, a facility might be able to meet the resident’s needs.

At Lebowitz & Mzhen, our nursing home lawyers help residents and their families in Maryland obtain compensation for injuries caused by abuse or neglect. To schedule a free and confidential consultation, contact us today online or at (800) 654-1949.

More Blog Posts:

Mandatory Arbitration Clauses in Maryland Nursing Home Admissions, Maryland Nursing Home Lawyer Blog, October 3, 2012
Feds Help Families Choose the Right Nursing Home With Improved Website, Maryland Nursing Home Lawyer Blog, August 19, 2011
Elder Abuse—the Financial Exploitation of Seniors and Nursing Home Residents, Maryland Nursing Home Lawyer Blog, April 1, 2011

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