Was quality placed second?
Hospital administrative costs increased in the United States between 1990 and 1994, and were particularly high at for-profit hospitals. These costs were an average of $8,115 per stay in 1994 at for-profits, $7,490 at private nonprofits, and $6,507 at public facilities, a study found.1 For-profits spent less on clinical personnel. This suggests the facilities are diverting funds away from patient care and toward CEO salaries and shareholder dividends, say the authors. The report singled out Columbia-HCA Healthcare, the nation’s largest for-profit hospital chain, and claimed that the facilities averaged $123 in profit per patient day.
The study is the first to analyze national hospital data for differences in administrative costs and profits among for-profit, nonprofit, and public hospitals.
Reference
1. Woolhandler S, Himmelstein DU. Costs of care and administration at for-profit and other hospitals in the United States. N Engl J Med 1997; 336:769-774. t
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