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Related Experiment Videos

Study fails to prove for-profits' superiority.

J Fitzgerald, B Jacobsen

    Health Progress (Saint Louis, Mo.)
    |March 11, 1987
    PubMed
    Summary

    This study critiques a 1987 article claiming for-profit hospitals outperform nonprofit hospitals. It argues the original research had significant flaws, questioning its financial and social performance conclusions for healthcare organizations.

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    Area of Science:

    • Healthcare Management
    • Health Economics
    • Nonprofit Sector Analysis

    Background:

    • A 1987 Harvard Business Review article by Herzlinger and Krasker questioned the financial and social performance of nonprofit hospitals compared to for-profit counterparts.
    • The original study analyzed hospitals within for-profit and not-for-profit chains.

    Purpose of the Study:

    • To critically evaluate the conceptual and methodological limitations of the Herzlinger and Krasker study.
    • To challenge the study's conclusions regarding the comparative performance of for-profit and not-for-profit hospitals.

    Main Methods:

    • Analysis of the original study's research design and data.
    • Identification of methodological flaws including non-comparable hospital groups and market factor neglect.
    • Critique of the study's data relevance due to industry changes since 1981.

    Main Results:

    • The Herzlinger and Krasker study's comparison of hospitals across different market levels was deemed meaningless.
    • The study failed to account for crucial factors like social subsidies, pricing, uncompensated care, and reimbursement differences.
    • The conclusion that nonprofit hospitals are less efficient and require societal investment was found to be unproven.

    Conclusions:

    • The original study's findings on the financial and social performance of nonprofit versus for-profit hospitals are unreliable due to significant flaws.
    • The critique highlights the need for more rigorous and context-aware research when comparing healthcare organizations.
    • The study underscores the complexity of evaluating hospital performance beyond simple financial metrics.

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