For-Profit Hospitals Invest Less in Nursing Services and Patient Care: Study

Research suggests that hospital budget cuts have no significant impact on profit margins, but do cause worse outcomes for patients.

A new study warns that patients treated in hospitals operating to make a profit receive worse care, and are less safe than if they had gone to a not-for-profit medical facility.

The findings were published in the journal Medical Care late last month, indicating that for-profit hospitals invest less in nursing staff and hospital work environments, which leads to worse care for patients.

The study comes amid growing concerns over increasing rates of patient complications, injuries, deaths and rehospitalizations at for-profit facilities in recent years.

In January, the U.S. Senate Budget Committee released a report warning that private equity-owned hospitals “pose a threat to the nation’s health infrastructure.” Around the same time, a study published in JAMA Network determined that patient care experiences often worsen following the acquisition of hospitals by private equity firms.

In the new study, researchers from the University of Pennsylvania in Philadelphia suggested that for-profit hospitals have worse outcomes for patients because of fewer nurses, staff and resources, due to their focus on increasing profit margins.

Led by Dr. Jane K. Muir, the research team conducted a case study analyzing nursing services, patient care quality, safety outcomes and nurse job satisfaction across 113 Illinois hospitals in 2021. The analysis drew on data from three key sources: the RN4CAST-IL nurse survey, cost data from the National Academy for State Health Policy (NASHP), and the American Hospital Association’s Annual Hospital Survey.

Overall, the data indicates that for-profit hospitals put less money into nursing services and resources, leading to worse outcomes, as well as poor patient care quality and safety compared to not-for-profit hospitals.

On average, scores for nurse working environments were lower among for-profit hospitals, ranking 2.5 compared to 2.9 at not-for-profit hospitals in the nurse’s survey. For-profit hospitals also had higher rates of job dissatisfaction (38% vs. 23%), nurse burnout (64% vs. 46%), and higher rates of nurses planning to leave their employers (36% vs. 23%). They also often had worse staffing ratios, leaving fewer nurses to care for more patients, including those who are critically ill.

In addition, for-profit hospitals had worse quality and safety patient scores compared to not-for-profit hospitals.

However, despite the sacrifices made to patient care to save money, the research team determined there was no statistical difference in operating margins between for-profit and not-for-profit hospitals. They were also often similarly sized, with similar technology capabilities at not-for-profit hospitals. The main difference was not-for-profit hospitals focused more on proper staffing to boost patient care, the researchers determined.

“Investments in nursing services as well as quality and safety of patient care in for-profit hospitals are worse than in not-for-profit hospitals, despite having no significant differences in operating margins,” Muir’s team concluded.