Higher risks in for-profit hospitals, CMA journal report shows.

TORONTO -- Private for-profit ownership of hospitals compared with private not-for-profit ownership results in a higher risk of death for patients, according to a study published in the Canadian Medical Association Journal.

The higher mortality rate can be explained in part by lower staffing levels of highly skilled personnel in for-profit hospitals, concluded the research team headed by Dr. P.J. Devereaux of the Department of Clinical Epidemiology & Biostatistics at McMaster University. Concern that the profit motive of private for-profit hospitals may have adverse affects on patient outcomes is justified, they said.

As Canadian health policymakers consider an expansion of private for-profit health care, the study says, discussion has focussed on whether private for-profit health care facilities can contain costs more effectively, avoid two-tier access and avoid letting foreign investors influence Canadian health care policy through the North American Free Trade Agreement. The missing piece has been the potential health outcomes of expanding private for-profit health services.

The study also notes that 95 per cent of the institutions referred to by Canadians as "public hospitals" actually operate under private, not-for-profit ownership. When profit margins enter the picture, mortality rates go up, the study found.

Researchers considered the possibility of other causes for the increase in deaths, such as teaching status and disease severity among patients. In every case, their analysis continued to turn up a higher mortality rate in for-profit hospitals.

Both types of hospitals receive similar reimbursement for their services through medicare, the report says. However, private, for-profit hospitals have to deal with factors such as:

* investors expecting a 10%-15% return on their investment,

* administrators receiving monetary rewards for reaching or exceeding profit margins,

* taxes,

* larger reimbursement packages for senior administrators.

As a result, for-profit hospitals devote fewer resources to patient care. The study found that private for-profit hospitals employed fewer highly skilled personnel per risk-adjusted bed and that the number of highly skilled personnel per hospital bed is strongly associated with hospital mortality rates. The results of all but one study are consistent over time, despite dramatic shifts in the structure of U.S. health care, the report says, noting that whatever the context within which they function, for-profit care providers face the problem of holding down costs while delivering a profit. As well, the researchers say, should Canada open its doors to private for-profit hospitals, it is the same large U.S. hospital chains that generated the employed fewer highly skilled personnel per risk-adjusted bed and that the number of highly skilled personnel per hospital bed is strongly associated with hospital mortality rates. The results of all but one study are consistent over time, despite dramatic shifts in the structure of U.S. health care, the report says, noting that whatever the context within which they function, for-profit care providers face the problem of holding down costs while delivering a profit. As well, the researchers say, should Canada open its doors to private for-profit hospitals, it is the same large U.S. hospital chains that generated the data used that will soon be purchasing Canadian private for-profit hospitals.

The report recommends that Canadian health policy-makers take this research into account when making decisions about private, for-profit health care delivery.