Profitability is Associated with Reporting Patient Safety Events
There is a small, but significant relationship between the number of reports per licensed bed that an acute care hospital made last year and its operating margin as reported by the Pennsylvania Health Care Cost Containment Council (PHC4). Among 168 acute care hospitals for which there was sufficient information to make comparisons, 3.7% of the variation in the operating margin could be accounted for by the number of reports per licensed bed. Although the correlation was small (r=0.18), it was highly significant statistically (probability less than 0.02 that it was random variation).
Hospitals with negative operating margins, according to the PHC4 report “Financial Analysis 2006, Volume One,”1 were found by PA-PSRS analysts to have submitted an average of 3.42 reports per licensed bed to PA-PSRS. Hospitals with positive operative margins submitted an average of 5.24 reports per licensed bed. Even within the hospitals with positive operating margins, those above the median operating margin for profitable hospitals of 3.33% submitted more reports per licensed bed than those below (see Table).
|Operating Margin reported by PHC4||Range of Operating Margin||Number of Hospitals||Average Number of Reports/Bed Submitted to PA-PSRS (2006)|
|Negative||-50.07% to -0.03%||55|
|Positive, up to the positive median||0.14% to 3.33%||57||4.41|
|Positive, above the positive media||3.42% to 22.69%||56||6.09|
For a theoretical 200-bed hospital, the average difference in reporting calculates to be 684 reports during the year for a hospital with a negative operating margin, 882 for a hospital with a moderate operating margin, and 1,217 for a hospital with a higher operating margin. The relationships between quality and profitability or quality and reporting remain untested.
- Pennsylvania Health Care Cost Containment Council. Financial analysis 2006, volume one: general acute hospitals [online]. 2007 Jun [cited 2007 Jul 16]. Available from Internet: http://www.phc4.org/reports/fin/06/docs/fin2006report_volumeone.pdf.