The results of these studies are not warranted when they are generalized across organization ownership. Hospitals 2023 Infographics, View the Fast Facts: U.S. Plenty of studies find that firms' abnormal returns are positively associated with lobbying (see Lo 2003; Hochberg, Sapienza, and Vissing-Jrgensen 2009; Hill, Kelly, Lockhart, and Van Ness 2013; Mathur, Singh, Thompson, and Nejadmalayeri 2013; Borisov, Goldman, and Gupta 2016). 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). Photo by Freedom to Marry courtesy of Creative Commons license. Recall our main results in Table 3, which reveal that lobbying increases employee salaries in NFP hospitals rather than in for-profit hospitals. 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. Healthcare Management Degree Guide (HMDG). We winsorize all continuous variables at the 1st and 99th percentiles to solve the outlier issue. 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. Therefore, it is reasonable to assume that hospitals or hospital groups that engage in lobbying could gain substantial benefits. If hospital lobbying increases employee salaries and/or reduces uncompensated care costs, it is rational to assume that lobbying activities can influence hospitals' ROA, but the combined effects are unpredictable. First, we provide a literature review that examines the effects of lobbying on organization performance along with hypotheses development in Section II. These distinct effects of hospital lobbying provide evidence that NFP hospitals lobby to protect employees' interests, while for-profit hospitals lobby to maximize investors' interests. If you look at the high-ranking legislators who are supporting AHA, it holds a clue of what may happen. 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. We predict that Size is negatively correlated with Uncomp. (2015) find that lobbying is positively associated with income before extraordinary items, net income, and cash from operations. Rural Hospitals Infographic, COVID-19 in 2021: Pressure Continues on Hospital Margins Report, COVID-19 in 2021: The Potential Effect on Hospital Revenues, Bed Occupancy Percentage Over Time Animated Maps, Results from 2017 Tax-Exempt Hospitals Schedule H Community Benefit Reports. The Center for Responsive Politics (OpenSecrets.org) provides us with hospital lobbying data regarding total lobbying expenses at the federal level. Hospitals 2022 Infographics PDF, Fast Facts: U.S. He was the industrys Many recent publications use outdated hospital data. 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. Lobby_expt2 and Lobby_expt3 are continuous variables of Lobby_exp in year t2 and year t3, respectively. The latest Updates and Resources on Novel Coronavirus (COVID-19). Keeping quality employees and being fully staffed are critical for patient service (Stimpfel, Sloane, McHugh, and Aiken 2016; Aiken, Clarke, and Sloane 2002). We predict that Teaching is positively correlated with Salary. Please Thus, lobbying business organizations can take advantage of decreasing costs over nonlobbying business organizations in the same industry. 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. We predict that Teaching is positively correlated with Uncomp. After the introduction, this study is arranged as follows. Pediatric intensive care. The American Medical Association was by their side every step of the way, delivering the financial resources and support necessary to keep their practices afloat, 7. The means of most control variables in our sample, including Size, MedicareMix, MedicaidMix, and Network, are comparable with those in Collum et al. CMS reviews these waivers during the waiver renewal process (Mahan and Callow 2015). Severely burned patients are those with any of the following: (1) second-degree burns of more than 25% total body surface area for adults or 20% total body surface area for children: (2) third-degree burns of more than 10% total body surface area; (3) any severe burns of the hands, face, eyes, ears, or feet; or (4) all inhalation injuries, electrical burns, complicated burn injuries involving fractures and other major traumas, and all other poor risk factors. We keep using MCI, rather than _MCI, in the models. In addition, 935 hospitals do not continue to invest in lobbying during the period in our sample; i.e., about 55 percent of hospitals spent zero on lobbying in certain year(s). Therefore, we posit our first set of hypotheses as follows: Hospital lobbying increases employee salaries in NFP hospitals. All rights reserved. Will not changing the provision keep multi-campus hospital systems from adopting EHRs? WebWashington State Hospital Assn: $84,000: Colorado Hospital Assn: $80,000: Kentucky Hospital Assn: $80,000: Massachusetts Health & Hospital Assn: $80,000: North Carolina Our findings demonstrate that for-profit ownership contributes to this result because for-profit hospitals are more likely to strive for higher profitability than the other two types of hospitals. To empirically test our expectations, we use hospital financial data from Definitive Healthcare and hospital lobbying expense data from OpenSecrets.org for the period from 2011 to 2018. First, it extends lobbying research in the hospital industry by examining the relationship between lobbying and hospital performance. Government hospitals (e.g., Jackson Health System) are fully funded by a governmental entity (at the federal, state, or local level) in order to serve diverse constituents such as the military, people living in poverty, and the uninsured; for-profit hospitals (e.g., Tenet Healthcare Corporation) are owned by private investors that profit from providing services to paying patients; and NFP hospitals (e.g., University of Pittsburgh Medical Center [UPMC], Mayo Foundation for Medical Education and Research [Mayo Clinic], Ascension), managed by voluntary boards of trustees, are somewhere in the middle and provide care for paying patients and charitable services to people living in poverty (Baker et al. In Section IV we present and discuss the results of the empirical tests. We predict that Leverage is positively correlated with Uncomp. Lobbying may have other substantial savings/benefits from the other items, such as employee training and insurance allocations. For NFP hospitals in Table 3, the coefficient on Lobby_dum is 0.0230, suggesting that when an NFP hospital lobbies, the hospital pays an additional $9.91 (i.e., $431 0.023) million in employee salaries compared to its nonlobbying counterparts. Provides care to pediatric patients that is of a more intensive nature than that usually provided to pediatric patients. The type of hospital ownership determines their various stakeholders' interests, which could potentially impact the purposes of hospitals and their lobbying behaviors. 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). Most recently, in response to the global COVID-19 pandemic, the American Hospital Association (AHA) and the American Nurses Association (ANA) have joined forces to lobby congressional leaders for more funding to enhance healthcare workers' pay (Shinkman 2020b). Lobbying expenses, however, are the highest in for-profit hospitals, and the lowest in government hospitals, because governmental and charity money cannot be used for lobbying (Andrzejewski 2019; Leech 2006). In the NFP (for-profit) subsample, the average net patient revenues and net incomes are $275 ($123) million and $19.5 ($10.3) million, respectively. WebThis report represents a snapshot of the many activities and achievements that occurred throughout the ANA Enterprise in 2019 and as we began 2020. Neonatal intensive care. AHA Hospital Statistics is published annually by Health Forum, an affiliate of the American Hospital Association. To order print copies of AHA Hospital Statistics, call (800) AHA-2626 or visit the AHA online store. An interactive online version is also available. Note that the ICU beds data is not published in AHA Hospital Statistics. One-time expenses triggered a $6.4 million loss for the American Hospital Association last year, a significant swing from its $11.2 million surplus in 2017. 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. For example, Richter, Samphantharak, and Timmons (2009) find that a 1 percent increase in lobbying spending will lower effective tax rates by 0.5 to 1.6 percent. Therefore, hospitals need to continue spending on lobbying to maximize the benefits gained from lobbying. Noncommercial use of original content on www.aha.org is granted to AHA Institutional Members, their employees and State, Regional and Metro Hospital Associations unless otherwise indicated. May include myocardial infarction, pulmonary care, and heart transplant units. 2000). 2015), we further conduct robustness analyses to test the lagged lobbying effects. In the for-profit subsample, the mean of total assets is $99.9 million. (2009) find a similar tax reduction effect. Data for the most recent year was downloaded on April 24, 2023 and includes spending from January 1 - December 31. MCI is a continuous variable, but it does not change over the sample period. Other hospitals include nonfederal long term care hospitals and hospital units within an institution such as a prison hospital or school infirmary. The report was filed on Oct. 2, Specifically, we find that lobbying raises employee salaries in not-for-profit (NFP) hospitals, reduces uncompensated care costs in both for-profit and NFP hospitals, and increases return on assets (ROA) in for-profit hospitals. Table 2 reports the descriptive statistics of the variables used in our empirical analyses. Well, who's up for re-election? Thus, the combined effects on hospital financial performance are unknown. The hospital industry has a broad spectrum of lobbying interests. Therefore, we expect that lobbying is positively related to employee salaries in NFP and government hospitals, whereas this effect does not exist in for-profit hospitals. When Congress comes back from recess, expect more pressure and more pressure. Our study suggests that lobbying hospitals gain more benefits than their nonlobbying peers and provides insights into how lobbying can affect hospital performance, which could be helpful for hospital administrators' decision making. Roundup: Seoul National University Hospital promotes AI- Roundup: Sunshine Private live with Kyra EMR, Congress gives $10M to DoD, Philips to advance AI-driven disease prediction, The fast-growing need for oversight of AI in healthcare, Enhancing patient safety with data matrix barcodes, Mental and behavioral healthcare bridging gaps with telemedicine, Massachusetts health plan hit with ransomware and service disruptions, How government mandates can become a strategic advantage. We thank two anonymous reviewers and the editor for their comments that significantly strengthened the paper. 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. Congress has responded by appropriating tens of billions of dollars for both hospitals and their employees (Muchmore 2020). Hospitals follow regulations to determine whether patient care is classified as either charity care costs or bad debts. The two datasets do not have matched observations before 2011. Some feel that business organizations abuse lobbying for their selfish interests, which leads to corruption, while others think that lobbying is necessary because it prevents potentially harmful policies by providing important information to policymakers (Anderson, Martin, and Lee 2018). Further studies could explore this issue. Single, freestanding hospitals may be categorized as a system by bringing into membership three or more, and at least 25 percent, of their owned or leased non-hospital pre-acute or post-acute health care organizations. They will be the ones who reach out to the local physician groups to connect with them, thereby not only helping small physician offices adopt EHRs but aid in health information exchange. Our paper provides evidence to understand that the effects of lobbying vary based on distinct hospital ownership types. https://doi.org/10.2308/JOGNA-2020-009. Search for other works by this author on: To test our first set of hypotheses, we develop Model (1) as follows: \(\def\upalpha{\unicode[Times]{x3B1}}\)\(\def\upbeta{\unicode[Times]{x3B2}}\)\(\def\upgamma{\unicode[Times]{x3B3}}\)\(\def\updelta{\unicode[Times]{x3B4}}\)\(\def\upvarepsilon{\unicode[Times]{x3B5}}\)\(\def\upzeta{\unicode[Times]{x3B6}}\)\(\def\upeta{\unicode[Times]{x3B7}}\)\(\def\uptheta{\unicode[Times]{x3B8}}\)\(\def\upiota{\unicode[Times]{x3B9}}\)\(\def\upkappa{\unicode[Times]{x3BA}}\)\(\def\uplambda{\unicode[Times]{x3BB}}\)\(\def\upmu{\unicode[Times]{x3BC}}\)\(\def\upnu{\unicode[Times]{x3BD}}\)\(\def\upxi{\unicode[Times]{x3BE}}\)\(\def\upomicron{\unicode[Times]{x3BF}}\)\(\def\uppi{\unicode[Times]{x3C0}}\)\(\def\uprho{\unicode[Times]{x3C1}}\)\(\def\upsigma{\unicode[Times]{x3C3}}\)\(\def\uptau{\unicode[Times]{x3C4}}\)\(\def\upupsilon{\unicode[Times]{x3C5}}\)\(\def\upphi{\unicode[Times]{x3C6}}\)\(\def\upchi{\unicode[Times]{x3C7}}\)\(\def\uppsy{\unicode[Times]{x3C8}}\)\(\def\upomega{\unicode[Times]{x3C9}}\)\(\def\bialpha{\boldsymbol{\alpha}}\)\(\def\bibeta{\boldsymbol{\beta}}\)\(\def\bigamma{\boldsymbol{\gamma}}\)\(\def\bidelta{\boldsymbol{\delta}}\)\(\def\bivarepsilon{\boldsymbol{\varepsilon}}\)\(\def\bizeta{\boldsymbol{\zeta}}\)\(\def\bieta{\boldsymbol{\eta}}\)\(\def\bitheta{\boldsymbol{\theta}}\)\(\def\biiota{\boldsymbol{\iota}}\)\(\def\bikappa{\boldsymbol{\kappa}}\)\(\def\bilambda{\boldsymbol{\lambda}}\)\(\def\bimu{\boldsymbol{\mu}}\)\(\def\binu{\boldsymbol{\nu}}\)\(\def\bixi{\boldsymbol{\xi}}\)\(\def\biomicron{\boldsymbol{\micron}}\)\(\def\bipi{\boldsymbol{\pi}}\)\(\def\birho{\boldsymbol{\rho}}\)\(\def\bisigma{\boldsymbol{\sigma}}\)\(\def\bitau{\boldsymbol{\tau}}\)\(\def\biupsilon{\boldsymbol{\upsilon}}\)\(\def\biphi{\boldsymbol{\phi}}\)\(\def\bichi{\boldsymbol{\chi}}\)\(\def\bipsy{\boldsymbol{\psy}}\)\(\def\biomega{\boldsymbol{\omega}}\)\(\def\bupalpha{\bf{\alpha}}\)\(\def\bupbeta{\bf{\beta}}\)\(\def\bupgamma{\bf{\gamma}}\)\(\def\bupdelta{\bf{\delta}}\)\(\def\bupvarepsilon{\bf{\varepsilon}}\)\(\def\bupzeta{\bf{\zeta}}\)\(\def\bupeta{\bf{\eta}}\)\(\def\buptheta{\bf{\theta}}\)\(\def\bupiota{\bf{\iota}}\)\(\def\bupkappa{\bf{\kappa}}\)\(\def\buplambda{\bf{\lambda}}\)\(\def\bupmu{\bf{\mu}}\)\(\def\bupnu{\bf{\nu}}\)\(\def\bupxi{\bf{\xi}}\)\(\def\bupomicron{\bf{\micron}}\)\(\def\buppi{\bf{\pi}}\)\(\def\buprho{\bf{\rho}}\)\(\def\bupsigma{\bf{\sigma}}\)\(\def\buptau{\bf{\tau}}\)\(\def\bupupsilon{\bf{\upsilon}}\)\(\def\bupphi{\bf{\phi}}\)\(\def\bupchi{\bf{\chi}}\)\(\def\buppsy{\bf{\psy}}\)\(\def\bupomega{\bf{\omega}}\)\(\def\bGamma{\bf{\Gamma}}\)\(\def\bDelta{\bf{\Delta}}\)\(\def\bTheta{\bf{\Theta}}\)\(\def\bLambda{\bf{\Lambda}}\)\(\def\bXi{\bf{\Xi}}\)\(\def\bPi{\bf{\Pi}}\)\(\def\bSigma{\bf{\Sigma}}\)\(\def\bPhi{\bf{\Phi}}\)\(\def\bPsi{\bf{\Psi}}\)\(\def\bOmega{\bf{\Omega}}\)\begin{equation}\tag{1}Salar{y_{i,t}} = {\beta _0} + {\beta _1}Lobb{y_{i,t - 1}} + {\beta _2}MC{I_{i,t}} + {\beta _3}MedicareMi{x_{i,t}} + {\beta _4}MedicaidMi{x_{i,t}} + {\beta _5}Siz{e_{i,t}} + {\beta _6}Leverag{e_{i,t}} + {\beta _7}Teachin{g_{i,t}} + {\beta _8}Urba{n_{i,t}} + {\beta _9}Networ{k_{i,t}} + Yea{r_t} + Stat{e_i} + {\varepsilon _{i,t}} \end{equation}. 2013; Duggan 2000). Did not previously hold government jobs: 54.95% Previously held government jobs: MCI is a characteristic of the hospitals' market environment. Over $4.1 billion was spent on federal lobbying by various companies in 2022 There are over 3,700 companies that The coefficient on Lobby_exp is 0.0082 (0.0110) in the NFP (for-profit) subsample, suggesting that a $1 increase in lobbying expenses results in a $0.12 ($0.13) saving in uncompensated care costs in NFP (for-profit) hospitals. Shinkman (2020a) reports that American Hospital Association lobbyists are asking for a more expedited release of the Coronavirus Aid, Relief, and Economic Security (CARES) Act funds, but only for targeted members, such as hospitals with high numbers of Medicare Advantage and Medicaid patients and those in rural areas. The coefficient on Lobby_dum is 0.0114 (0.0180) in the NFP (for-profit) subsample, suggesting that if an NFP (for-profit) hospital incurs lobbying expenses, the average saving in uncompensated care costs is $3.135 ($2.214) million. In this paper, the control variables include the market concentration index (MCI), Medicare mix (MedicareMix), Medicaid mix (MedicaidMix), hospital size (Size), hospital leverage (Leverage),5 medical school affiliation (Teaching), hospital location (Urban), and networked hospital designation (Network). The These pools are time limited and created through Medicaid Section 1115 waivers. Therefore, a study that includes the different types of organization ownership within one industry might provide further insights on the effects of lobbying. The insignificant effects of lobbying in government hospitals are probably attributable to stricter regulations on government hospital lobbying activities and the subsidies for uncompensated care services that these hospitals receive. Feel free to distribute or cite this material, but please credit OpenSecrets. Unlike NFP and for-profit hospitals, government hospitals have other public funding on hand for subsidizing uncompensated care costs. For further information, contact the AHA Resource Center at rc@aha.org. Regression Analysis of Changes in Hospital Uncompensated Care Costs on Changes in Lobbying Expenses. Although hospitals are active participants in lobbying activities, relevant studies about the effects of lobbying in the hospital industry are sparse, largely because of the unavailability of hospital data. 4. AHA is supporting a bill that was introduced by Reps. Zack Space (Ohio-D) and Michael Burgess (Texas-R) in the House, and Sen. Charles Schumer (N.Y.-D) sponsored the Senate version. This finding supports our H2b, which is not a surprise because government hospitals have public funding for subsidizing uncompensated care costs. The American Hospital Association conducts an annual survey of hospitals in the United States. To examine the lagged effects of hospital lobbying on performance, we create Lobbyt2, and Lobbyt3 as the independent variables; i.e., Lobby_dumt2 and Lobby_dumt3 are indicator variables that are set equal to 1 if a hospital has lobbying expenses in year t2 and year t3, respectively, and 0 otherwise. Hospitals have distinctive characteristics that depend on their ownership types. 1987; Scott et al. Lobbying is an important avenue for business organizations to influence legislation, regulations, or policies in order to gain competitive advantage. For the full sample (9,646 observations), the mean of Lobby_dum is 0.774, indicating that 77.4 percent of hospitals have lobbying spending, and the mean (median) of Lobby_exp is 0.012 (0.002). System is defined by AHA as either a multihospital or a diversified single hospital system. Our paper provides evidence to illustrate that the goals and effects of hospital lobbying vary according to hospital ownership types.

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