2013; Bovbjerg et al. We predict the directions of the control variables in Model (1). 2013; Duggan 2000). Second, to our best knowledge, this is the first study that empirically examines the differences among NFP, for-profit, and government hospitals regarding lobbying purposes and effects. Well, who's up for re-election? WebEstablished in 1915, OHA is the nations first state-level hospital association. This difference might be due to the regulatory constraints on revenues, costs (e.g., wages), and prices in government hospitals (Sloan 1981). Future research could examine the effects of hospital lobbying on these two areas if relevant data are available. After yet another mass shooting, the national debate over gun policy renews. Will not changing the provision keep multi-campus hospital systems from adopting EHRs? Finally, in Section VI, we discuss the conclusions and implications of the current study. Just kidding. Number of Nongovernment Not-for-Profit Community Hospitals, Number of Investor-Owned (For-Profit) Community Hospitals, Number of State and Local Government Community Hospitals, Number of Nonfederal Psychiatric Hospitals, Intensive Care Beds 3 in Community Hospitals (FY2019 data to be updated 2/21), Medical-Surgical Intensive Care 4 Beds in Community Hospitals, Cardiac Intensive Care 5 Beds in Community Hospitals, Neonatal Intensive Care 6 Beds in Community Hospitals, Pediatric Intensive Care 7 Beds in Community Hospitals, Other Intensive Care 9 Beds in Community Hospitals, Number of Community Hospitals in aSystem 10. Under the current prospective payment system, the reimbursement rate for a specific procedure/treatment at the Centers for Medicare and Medicaid Services (CMS) or insurance companies is predetermined, which creates tremendous pressures on hospitals (K. Chang and G. Chang 2017). We further conduct a supplementary change analysis to show that reverse causality does not drive the association between hospital lobbying expenses and uncompensated care costs. Therefore, it is reasonable to assume that hospitals or hospital groups that engage in lobbying could gain substantial benefits. Lobbying activities draw researchers' attention because lobbying expenses have grown immensely. We present the results in Table 6. It would be interesting to get the reaction of HHS Secretary Kathleen Sebelius and ONC head David Blumenthal, MD, to this requested change. Provides care to pediatric patients that is of a more intensive nature than that usually provided to pediatric patients. Second, lobbyists can actively communicate crucial information to government officials in order to influence or shape policies to fit hospital strategies and interests, and therefore help hospitals to maintain a competitive advantage (Chen, Parsley, and Yang 2015). Please wait. Note that the ICU beds data is not published in AHA Hospital Statistics. Thus, government hospitals have less incentive to lobby for expanded reimbursement coverage and Medicaid to reduce uncompensated care costs (Bovbjerg et al. Other intensive care. It is interesting to find that hospital lobbying increases ROA only in for-profit hospitals. Healthcare Management Degree Guide (HMDG). Lobby_expt2 and Lobby_expt3 are continuous variables of Lobby_exp in year t2 and year t3, respectively. In the subsamples of government and for-profit hospitals, the coefficients on Lobby_dum or Lobby_exp are insignificant, suggesting that lobbying does not increase employee salaries in government and for-profit hospitals. Panel B of Table 2 presents the descriptive statistics of the variables under the different types of hospital ownership. saved. Thus, if an NFP or government hospital plans to increase its employee salaries and protect their interests, the hospital has to lobby the legislators to raise the standard of reasonable compensation. Pradhan (2020) reports that government and NFP hospitals have been lobbying to protect employees' incomes and interests for a long time. An interactive online version is also available. Our study makes the following contributions. The coefficient on Lobby_dum is 0.0294 in the for-profit subsample, suggesting that if a for-profit hospital incurs lobbying expenses, the average net income increases by $2.94 million. The unit is staffed with specially trained nursing personnel and contains monitoring and specialized support or treatment equipment for patients who, because of heart seizure, open-heart surgery, or other life-threatening conditions, require intensified, comprehensive observation and care. More recently, Brown (2016) finds that lobbying activities are associated with a high ROA, return on invested capital (ROIC), and ROE in Fortune 500 firms. At first glance, lobbying spending does not generate a positive return. We follow prior studies to select the control variables. After all, they are the ones who can really bring speed to market, so why not work with them to bring about that massive change? The effects of breadth and depth of information sharing, Corporate politics, governance, and value before and after Citizens United, Does electronic health record use improve hospital financial performance? All the above benefits gained from lobbying contribute positively toward business profitability. American After reviewing previously cited estimates, we examine and independently validate supply expense data (collected by the American Hospital Association) for over LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT, The Effect of Changes in Hospital Lobbying Expenses on Changes in Uncompensated Care, Becker, Townshend, Carnell, and Freerks 2013, Cao, Fernando, Tripathy, and Upadhyay 2018, Richter, Samphantharak, and Timmons (2009), Hochberg, Sapienza, and Vissing-Jrgensen 2009, Mathur, Singh, Thompson, and Nejadmalayeri 2013, Healthcare Management Degree Guide [HMDG] 2020, Davidoff, LoSasso, Bazzoli, and Zuckerman 2000, Gapenski, Vogel, and Langland-Orban (1993), Molinari, Alexander, Morlock, and Lyles (1995), Nauenberg, Brewer, Basu, Bliss, and Osborne 1999, https://www.aha.org/system/files/content/00-10/10uncompensatedcare.pdf, https://www.forbes.com/sites/adamandrzejewski/2019/06/26/top-u-s-non-profit-hospitals-ceos-are-racking-up-huge-profits, https://doi.org/10.1097/00005110-200005000-00004, https://www.beckershospitalreview.com/legal-regulatory-issues/physician-compensation-10-core-legal-and-regulatory-concepts.html, https://doi.org/10.1016/j.jairtraman.2016.03.009, https://doi.org/10.1016/j.jcorpfin.2017.12.012, https://www.opensecrets.org/federal-lobbying, https://doi.org/10.1177/000312240406900207, https://doi.org/10.1111/j.1540-6237.2007.00457.x, https://doi.org/10.1111/j.1740-1461.2012.01265.x, https://doi.org/10.1097/HMR.0000000000000068, https://doi.org/10.1177%2F0007650319843626, https://doi.org/10.1111/j.1540-6261.2006.01000.x, https://www.investopedia.com/investing/which-industry-spends-most-lobbying-antm-so/, https://www.thebalancesmb.com/stakeholder-2502118, https://www.houstonchronicle.com/news/houston-texas/houston/article/4-billion-health-care-for-poor-Texans-at-risk-as-6207561.php, https://www.healthcare-management-degree.net/faq/are-non-profit-or-for-profit-hospitals-better/, https://doi.org/10.1111/j.1475-679X.2009.00321.x, https://mpra.ub.uni-muenchen.de/51396/1/MPRA_paper_51396.pdf, https://doi.org/10.1016/j.amjmed.2003.10.037, https://doi.org/10.1007/s10551-010-0478-1, https://doi.org/10.1111/j.1541-0072.2006.00143.x, https://doi.org/10.1016/S0165-4101(03)00035-1, https://familiesusa.org/resources/explainer-medicaid-uncompensated-care-pools/, https://doi.org/10.1016/j.jbusres.2012.01.003, https://files.eric.ed.gov/fulltext/ED386775.pdf, https://doi.org/10.1097/00005650-199533020-00005, https://www.healthcaredive.com/news/hhs-starts-doling-out-12b-in-cares-funds-to-395-hospitals-in-covid-19-hot/577226/, https://doi.org/10.1177/107755879905600402, https://doi.org/10.1377/hlthaff.2015.0107, https://doi.org/10.1377/hlthaff.2015.1144, https://marketrealist.com/2014/11/analyzing-hospital-expenses/, https://www.npr.org/sections/health-shots/2020/02/12/804943655/doctors-push-back-as-congress-takes-aim-at-surprise-medical-bills, https://doi.org/10.1111/j.1540-5907.2009.00407.x, https://doi.org/10.1177/000765030003900202, https://www.healthcaredive.com/news/hospital-lobby-asks-feds-for-more-cares-funds-targeted-distribution/576239/, https://www.healthcaredive.com/news/hospital-nursing-groups-join-forces-to-lobby-congress-for-more-covid-19-fu/577252/, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2340501, https://doi.org/10.1017/S0022109011000457, Minimizing Overlapping Decision Rights Policy. MCI is a continuous variable, but it does not change over the sample period. To test H3, we develop Model (3) as follows: \begin{equation}\tag{3}RO{A_{i,t}} = {\delta _0} + {\delta _1}Lobb{y_{i,t - 1}} + \sum {Controls + Yea{r_t}} + Stat{e_i} + {\varepsilon _{i,t}} \end{equation}, Hospital staffing, organization, and quality of care: Cross-national findings, Quality improvement and hospital financial performance, Measuring rates of return on lobbying expenditures: An empirical case study of tax breaks for multinational corporations, Lobbying as a potent political marketing tool for firm performance: A closer look, Hospital ownership, performance, and outcomes: Assessing the state-of-the-science, Linking for-profit and nonprofit executive compensation: Salary composition and incentive structures in the U.S. hospital industry, The corporate value of (corrupt) lobbying, Lobbying, political connectedness and financial performance in the air transportation industry, An investigation of economic efficiency in California hospitals. The influence of physician board participation on hospital financial performance, Organizational resources and environmental incentives: Understanding the policy advocacy involvement of human service nonprofits, Network structure and hospital financial performance in New York State: 19911995, Politics, policy, and the motivations for advocacy in nonprofit reproductive health and family planning providers, The stages and strategies of advocacy among nonprofit reproductive health providers. Therefore, hospitals need to continue spending on lobbying to maximize the benefits gained from lobbying. While neighborhood volunteers operate an estimated 35% of HOAs, the rise Table 2 reports the descriptive statistics of the variables used in our empirical analyses. Total from Subsidiaries, 2020 Hospital costs include salaries (49 percent), supplies (17 percent), uncompensated care (13 percent), and miscellaneous expenses (21 percent) (Patrick 2014). American More is not always better, Economic consequences of regulated changes in disclosure: The case of executive compensation, Corporate governance and lobbying strategies, Raising rivals' costs through political strategy: An extension of resource-based theory, Corporate PAC campaign contributions in perspective, Does the hospital board need a doctor? (2010) find that government hospitals provide significantly more uncompensated care. In the for-profit subsample, the estimated coefficients are positive (0.0294 and 0.1138, respectively) and significant (p = 0.078, and p = 0.016, respectively), suggesting that lobbying increases ROA only in for-profit hospitals. The results of these studies are not warranted when they are generalized across organization ownership. The mean (median) of Salary is 0.456 (0.383). American Hospital Assn Profile: Summary OpenSecrets For permission to reprint for commercial uses, Rural Hospitals 2022 Infographic PDF, Fast Facts: U.S. Health Systems 2023 Infographic PDF, With Its New Genomics Data Services, AWS Hopes to Facilitate Rapid Advances in Precision Medicine, Data and Analytics | Strengthening the Health Care Workforce, AHA Letter to CMS on Establishment of a National Directory of Health Care Providers and Services (NDH), Section 2 - Data and Technology | Strengthening the Health Care Workforce, HRSA releases data on organ donations, transplants, AHA comments on proposed HIPAA transaction standards for health care attachments, MedPAC adopts payment recommendations for 2024, HRSA to host training webinar for National Practitioner Data Bank administrators, Reminder: Hospital COVID-19 data reporting moves to CDC network Dec. 15, OCR reminder: HIPAA rules apply to online tracking technologies, HRSA releases data on maternity care health professional shortage areas, Congress urged to prevent additional PAYGO cuts to Medicare, CMS: Clinical laboratories must report private payer data beginning Jan. 1, The Current State of Hospital Finances: Fall 2022 Update, Fast Facts: U.S. Health Systems Infographic, Fast Facts: U.S. Using Analytics to Improve Revenue Cycle May 10, Latest Cyber Threats, Legislation and Policy Updates, Marcom Budgets By the Numbers: Key Findings from 2022 SHSMD Benchmarking, The New Playbook: Creating Measurable ROI through Sponsorships, Part 3Assess: Building a Data Process for Reporting, Research and More Nov 16, Optimizing Your Workforce Strategy With an Integrated Analytics Approach to Boost Engagement, Part 2Connect: Building Bridges from Health Care to Social Care Oct 26, Apply Enriched Data Analysis to Improve Operations and Health Outcomes, Planning Marcom Budgets By the Numbers: Preliminary Findings from SHSMD Benchmarking, The Important Role Hospitals Have in Serving Their Communities, American Organization for Nursing Leadership. Hospitals can sell bad debts to collection agencies for partial payment but need to absorb charity care costs by themselves. Excluded are hospitals not accessible by the general public, such as prison hospitals or college infirmaries. In this study, we choose to examine the effects of lobbying in the hospital industry because of the co-existence of three types of hospital ownership; namely, NFP, for-profit, and government. For example, in 1997, rural hospitals lobbied Capitol Hill to protect their interests by overturning a budget provision that funnels extra Medicare money to large urban hospitals with more than 100 beds (Weissenstein 1997). Journal of Governmental & Nonprofit Accounting 1 January 2021; 10 (1): 125. The increase in net patient revenue is offset by the increase in employee salaries in NFP hospitals. The AHA has also created Fast Facts on U.S. Rural Hospitals 2022 Infographic, View the Fast Facts: U.S. Health Systems 2023 Infographic, View the Fast Facts: Behavioral Health 2022 Infographic, Obstetrics: U.S. CMS reviews these waivers during the waiver renewal process (Mahan and Callow 2015). Gapenski, Vogel, and Langland-Orban (1993) find several determinants of hospital performance including patient mix (i.e., Medicare/Medicaid mix) and organizational characters (i.e., size, teaching status, and network). 2023 by the American Hospital Association. A full-time neonatologist serves as director of the NICU. The American Hospital Association conducts an annual survey of hospitals in the United States. The data below, from the 2020 AHA Annual Survey, are a sample of what you will find in AHA Hospital Statistics, 2022 edition. Grants, contracts, and interest group lobbying behavior, Do firm's organisational slacks influence the relationship between corporate lobbying and corporate financial performance? The unit is staffed with specially trained personnel and contains monitoring and specialized support equipment for treatment of patients who, because of shock, trauma, or other life-threatening conditions, require intensified, comprehensive observation and care. Unlike government and NFP hospitals, for-profit hospitals can independently determine employee salaries based on profitability and thus are not involved in lobbying related to employee salaries (Barragato 2002). The latest Updates and Resources on Novel Coronavirus (COVID-19). In addition, lobbyists actively communicate with government officials so that lobbying hospitals or groups can influence or shape policies in order to protect their own interests and increase their competitive advantage (Chen et al. We find that hospital lobbying increases employee salaries in NFP hospitals, reduces uncompensated care costs in NFP and for-profit hospitals, and increases ROA in for-profit hospitals; however, all these effects of lobbying are insignificant in government hospitals. Hospitals follow regulations to determine whether patient care is classified as either charity care costs or bad debts. Healthcare report: How are U.S. healthcare organizations embracing intelligent automation to enhance patient centricity? Lee and Baik (2010) find that the more business organizations spend on lobbying, the larger the amount of tariff reduction they will receive from U.S. Customs and Border Protection. Hospital & Healthsystem Assn of Pennsylvania, Oregon Assn of Hospitals & Health Systems. Nine states had uncompensated care pools. And now as the hospital industry stares down a newly empowered Democratic Party eyeing a litany of unprecedented health reforms Nickels is retiring at 68. NFP and for-profit hospitals lobby to classify more healthcare services as normal services rather than charity care and lobby to expand reimbursement coverage and Medicaid under the Affordable Care Act to reduce uncompensated care costs (Nikpay, Buchmueller, and Levy 2015, 2016). (2015) find that lobbying is positively associated with income before extraordinary items, net income, and cash from operations. National Education Assn 2018). In the government subsample, the estimated coefficients 1 are insignificant, suggesting that hospital lobbying does not reduce uncompensated care costs in government hospitals. Burn care. Our findings suggest that NFP hospitals lobby to protect employees' interests and for-profit hospitals lobby to maximize investors' interests, while government hospitals are inactive or less interested in the above lobbying activities. Hospital Lobbying and Performance | Journal of Governmental 2018 Year of Advocacy: Pursuing positive change on every level HOA Industry. WebLobbying 2022 2021 $2,720,000 REVOLVING DOOR 9 out of 18 National Education Assn lobbyists in 2021 have previously held government jobs. A special interest's lobbying activity may go up or down over time, depending on how much attention the federal government is giving their issues. When Lobby_dumt3 and Lobby_expt3 are the variables of interest, the significance disappears. The largest lobbyist group in the U.S. is the National Association of Realtors, who spent over $84 billion on lobbying in 2022. 4. These pools are time limited and created through Medicaid Section 1115 waivers. For-profit hospitals can lawfully release patients who lack the ability to pay for further treatment after establishing that the patients are out of danger, whereas NFP hospitals are obligated to treat all conditions, whether life-threatening or not, regardless of the patients' financial or health insurance status (Healthcare Management Degree Guide [HMDG] 2020). Hospital lobbying reduces uncompensated care costs in for-profit hospitals. Beyond conventional marketing and management strategies, lobbying is often used to shape the external environment by influencing legislation, regulations, or policies to gain advantages, such as increased market power (McWilliams, Van Fleet, and Cory 2002), tax reductions (Alexander, Mazza, and Scholz 2009), government bailouts (Faccio, Masulis, and McConnell 2006), government contracts (Hansen and Mitchell 2000), and federal funds (de Figueiredo and Silverman 2006). Researchers also find that lobbying business organizations have a better potential of gaining direct help from the government, in the form of bailouts (Faccio et al. Some studies also use the market concentration index as a control variable for market competition (e.g., Goes and Zhan 1995; Alexander, Weiner, and Griffith 2006; Collum et al. Long term care hospitals may be defined by different methods; here they include other hospitals with an average length of stay of 30 or more days. 2015). https://doi.org/10.2308/JOGNA-2020-009. WebAmerican Hospital Association More records Hill outreach to oppose site-neutral payment cuts; Hill outreach in support of the Acute Hospital Care at Home program; Hill outreach A 501(c)(3) tax-exempt, charitable organization, 1100 13th Street, NW, Suite 800 Particularly active clients often retain multiple lobbying firms, each with a team of lobbyists, to press their case for them. All rights reserved. Hospitals, 2022 | Map of Community Hospitals in the United States. In this sense, patients make no difference in hospital lobbying efforts. Frankenfield (2020) suggests that lobbying efforts in the hospital industry are generally focused on cost management, prevention of salary reductions, insurance allocations, and spending on employee training. In the NFP subsample, the mean of total assets is $431 million, and the mean of net incomes is $19.5 million. Provides care to severely burned patients. Keeping quality employees and being fully staffed are critical for patient service (Stimpfel, Sloane, McHugh, and Aiken 2016; Aiken, Clarke, and Sloane 2002). Dues-paying members are eligible to receive a print copy of JAMA , the Journal of the American Medical Association. Thus, we expect a positive relationship between hospital lobbying and employee salaries in NFP and government hospitals. The mean (median) of ROA is 0.044 (0.037), which is consistent with that in Collum et al. This regulation provides opportunities for scholars to study lobbying empirically. Follow the money on gun rights and gun control groups. Hospitals and related healthcare institutions rank the 8th highest in lobbying with expenditures of over $1.79 billion over the past 22 years (Frankenfield 2020), but empirical research on lobbying in the hospital industry is relatively sparse, partially due to hospital data limitations.1 Like other lobbying organizations, hospitals or hospital groups that engage in lobbying usually maintain a close relationship with lawmakers, so they often take advantage of that relationship and alter their business strategies earlier to better prepare for the changing environment (Marmor et al. Washington, OHA exists to collaborate with member hospitals and health systems to ensure a healthy Ohio. Did not previously hold government jobs: 54.95% Previously held government jobs: (2009) find a similar tax reduction effect. But not accommodating this huge cost factor could very well drag out adoption, and that's something neither HHS nor ONC want to see happen.
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