Competition among hospitals and managed care have forced hospital industry to be more efficient. With higher degrees of hospital competition and managed care penetration, hospitals have argued that the rate of increase in hospital cost is greater than the rate of increase in hospital revenue. By developing a payer-specific case mix index (CMI) for third-party patients, this paper examined the effect of hospital case mix on hospital cost and revenue for third-party patients in California using the hospital financial and utilization data covering 1986-1998. This study found that the coefficients for CMIs in the third-party hospital revenue model were greater than those in the hospital cost model until 1995. Since 1995, however, the coefficients for CMIs in the third-party hospital revenue model have been less than those in hospital cost models. Over time, the differences in coefficients for CMIs in hospital revenue and cost models for third-party patients have become smaller and smaller although those differences are statistically insignificant.

For-profit ownership of long-term care homes has long been contentious in Canada and abroad, with concerns that excessive cost-cutting may negatively impact the quality of care. These concerns re-emerged during the COVID-19 pandemic, during which for-profit ownership was associated with larger outbreaks and more deaths in Canada. Existing international research on long-term care quality has suggested that for-profit homes provided worse quality based on multiple measures such as risk-adjusted health outcomes, staffing levels, process indicators, and inspections infractions. One potential explanation is the cost-cutting behaviours of for-profit homes, as they have been reported to provide fewer hours of direct care and substitute cheaper forms of nursing care. In Canada, an additional explanation may have been that not-for-profit homes and public homes had additional revenues such as municipal funding and charitable donations that were not available to most for-profit homes. Despite the controversies, few studies in Canada have examined whether long-term care home ownership status is associated with differences in quality metrics. Only one study from Ontario was identified that used a composite measure of risk-adjusted quality indicators and reported that for-profit homes and not-for-profit homes performed better than municipal homes. This study used data from Ontario and British Columbia, provinces with different funding models, to examine quality based on two outcomes consistent with the literature: the Canadian Institute for Health Information’s (CIHI) publicly reported risk-adjusted long-term care quality indicators, and infractions identified during inspections. There were therefore two main objectives. First, the study examined whether financial vulnerability and charitable donations were associated with differences in quality between private not-for-profit homes, leveraging tax data from the Canadian Revenue Agency. Second, the study examined whether ownership status and other facility characteristics were associated with differences in quality. Results suggested that neither financial vulnerability nor charitable donations were associated with differences in quality. Findings related to ownership status were inconsistent. Private for-profit and private not-for-profit ownership was associated with better performance on the CIHI quality indicators but were also associated with more inspection infractions and complaints compared to public homes. Further research is needed to better elucidate the mechanisms for differences in quality, and to examine whether the differences in CIHI indicator performance reflected true differences in quality or limitations of risk-adjustment. / Thesis / Master of Science (MSc)

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