Study sheds light on why for-profit hospitals have worse nursing and patient outcomes

Studies have shown that for-profit hospitals have higher rates of mortality and rehospitalizations, poorer access for people from lower socio-economic backgrounds, and worse quality compared to not-for-profit hospitals, but research explaining these outcomes is lacking.

University of Pennsylvania School of Nursing researchers hypothesized that for-profit hospitals invest less in nursing services, such as staffing and work environments—important factors considering that decades of research show that hospitals with better-resourced nursing services have better outcomes for patients and nurses.

Using data from 2021, including a survey of nurses, the analysis includes 113 adult acute-care general hospitals in Illinois. Researchers find that for-profit facilities have statistically significant lower investment levels in nursing services, worse job outcomes for nurses, and poorer outcomes in patient care quality and safety—despite there being no statistically significant difference in operating margins, hospital size, or technological capabilities. Their findings are published in Medical Care.

“Patients in for-profit hospitals received less nursing care—this is, worse patient-to-nurse staffing ratios—than patients in not-for-profit hospitals,” says first author K. Jane Muir, assistant professor in Penn’s School of Nursing. “Nurses working in for-profit hospitals had worse ratings of their work environment and gave their hospital poorer grades on patient safety and infection prevention than nurses in not-for-profits.”

“Though the majority of U.S. hospitals are not-for-profit, there is a growing trend toward for-profit ownership and private equity in the hospital sector,” says co-author Karen B. Lasater, associate professor of nursing. “With this trend, there is mounting concern about the quality of patient care that will follow.”

These findings are timely and relevant because many states—including Illinois, Pennsylvania, Massachusetts, and Washington—are considering legislation that would require hospitals to staff enough nurses to safely care for patients, says Lasater.

Opponents of such legislation say it would be prohibitively expensive for hospitals, but the study’s findings of weak correlations between operating margins and nurse staffing suggest otherwise, Lasater says. Additionally, previous studies from Penn Nursing’s Center for Health Outcomes and Policy Research—of which Lasater is associate director—found that better nurse staffing more than pays for itself through improved patient outcomes.

The authors note that while the new study included only eight for-profit hospitals, the differences in nursing services were statistically significant, and the findings add a new contribution to understanding why for-profit hospitals deliver poorer care on average.

“We are excited to replicate our study findings using a larger sample of hospitals and robust modeling approaches, given that the present study was limited to one state and was largely descriptive,” Muir says. “There are new relationships we are interested in evaluating, including associations between nursing services, patient outcomes, and private equity involvement.”