2015), we further conduct robustness analyses to test the lagged lobbying effects. Journal of Governmental & Nonprofit Accounting 1 January 2021; 10 (1): 125. The means of most control variables in our sample, including Size, MedicareMix, MedicaidMix, and Network, are comparable with those in Collum et al. Congress has responded by appropriating tens of billions of dollars for both hospitals and their employees (Muchmore 2020). In this sense, patients make no difference in hospital lobbying efforts. First, patients are different. 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). Similar to our predictions in Model (1), we predict that the directions of the coefficients on MedicareMix and MedicaidMix are unknown. Hospital lobbying increases employee salaries in government hospitals. Feel free to distribute or cite this material, but please credit OpenSecrets. Because we are unable to access insurance allocations, spending on employee training, and supply cost data, we focus on investigating the effects of lobbying on employee salaries and uncompensated care costs. Another goal of lobbying is cost (excluding employee salaries) saving (Frankenfield 2020). After merging data from the two data sources, we exclude observations that lack valid data needed to calculate the variables in our analyses. Because these differences may impact hospital performance, we include state fixed effects, State, to control state variations. 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). Therefore, ROA only increases in for-profit hospitals. We also find that the effects of lobbying on employee salaries, uncompensated care costs, and ROA are not significant in government hospitals. 2015). Previously held government jobs: 50.00% Did not previously hold government jobs: 50.00% 2022 $2,960,000 REVOLVING DOOR 9 out of 19 National Education Assn lobbyists in 2022 have previously held 2015). Fast Facts will be updated with FY2019 ICU bed counts in February 2021. Hospitals 2023 Infographics, View the Fast Facts: U.S. Larger hospitals will pay higher salaries than their smaller counterparts. Hospital characteristics vary widely due to different types of ownership (see Appendix B for a review), and these differences affect their lobbying goals and outcomes. In 2020, the healthcare sector In the for-profit subsample, the estimated coefficients are positive (0.0294 and 0.1138, respectively) and significant (p = 0.078, and p = 0.016, respectively), suggesting that lobbying increases ROA only in for-profit hospitals. In Texas, for example, the rate is 70.3%. He was the industrys 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. Teaching hospitals have to allocate some resources to teaching duties. Web41 out of 91 American Hospital Assn lobbyists in 2020 have previously held government jobs. Therefore, in this study, we can only study the hospitals that spend over $10,000 on lobbying at the federal level. Other than a potential logistical issue of keeping track of multiple incentive payments for one Medicare provider number, it's hard to fathom the reason for penalizing multi-campus health systems. However, because Medicare and Medicaid are mainly reimbursed by CMS and state/local governments, those payments are more secure than patients' payments. Therefore, lobbying hospitals can alter their business strategies earlier to better prepare for the changing environment (Marmor, Schlesinger, and Smithey 1987; Scott, Ruef, Mendel, and Caronna 2000). Hospitals follow regulations to determine whether patient care is classified as either charity care costs or bad debts. Healthcare report: How are U.S. healthcare organizations embracing intelligent automation to enhance patient centricity? Lobbying is one of the most dominant types of political involvement (Lin 2019; Cao, Fernando, Tripathy, and Upadhyay 2018). Therefore, it is reasonable to assume no significant change in lobbying expenses due to the ACA during the period between 2011 and 2018. Similarly, by examining publicly traded firms, Chen et al. 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. Regression Analysis of Changes in Hospital Uncompensated Care Costs on Changes in Lobbying Expenses. 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). WebLobbying Lobbying Data Summary Companies, labor unions, trade associations and other influential organizations spend billions of dollars each year to lobby Congress and federal agencies. In the NFP and government subsamples, the estimated coefficients 1 on Lobby_dum or Lobby_exp are insignificant. And now as the hospital industry stares down a newly empowered Democratic Party eyeing a litany of unprecedented health reforms Nickels is retiring at 68. To test our second set of hypotheses, we develop Model (2) as follows: \begin{equation}\tag{2}Uncom{p_{i,t}} = {\gamma _0} + {\gamma _1}Lobb{y_{i,t - 1}} + \sum {Controls + Yea{r_t}} + Stat{e_i} + {\varepsilon _{i,t}} \end{equation}. Arizona's Safety Net Care Pool expired in December 2017, and Hawaii's uncompensated care pool expired in June 2016. We keep using MCI, rather than _MCI, in the models. For further information, contact the AHA Resource Center at rc@aha.org. The results support our H1c but do not support our H1b. Nine states had uncompensated care pools. When Lobby_dumt3 and Lobby_expt3 are the variables of interest, the significance disappears. Shaffer, Quasney, and Grimm (2000) find a positive relationship between lobbying and net income in the airline industry. 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. Regression of Hospital Total Salaries on Lobbying. Provides care to severely burned patients. WebEstablished in 1915, OHA is the nations first state-level hospital association. We predict that Leverage is negatively correlated with Salary. 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. A higher MCI indicates higher market competition, which may involve a higher human resource supply. MCI is a characteristic of the hospitals' market environment. In addition, lobbyists actively communicate with government officials so that lobbying hospitals or groups can influence or shape policies in order to protect their own interests and increase their competitive advantage (Chen et al. Many recent publications use outdated hospital data. Well, who's up for re-election? 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. 6. Other special hospitals include obstetrics and gynecology; eye, ear, nose, and throat; long term acute-care; rehabilitation; orthopedic; and other individually described specialty services. 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. After yet another mass shooting, the national debate over gun policy renews. Researchers also find that lobbying business organizations have a better potential of gaining direct help from the government, in the form of bailouts (Faccio et al. Lobbying for American Hospital Association by American While neighborhood volunteers operate an estimated 35% of HOAs, the rise Thus, this study sheds light on distinctions in lobbying among different types of ownership. To learn the reason for this finding, we conduct one additional test to study the association between hospital lobbying and revenue. Regardless of the other potential benefits, lobbying expenses generate a positive return in for-profit hospitals. 1987; Scott et al. Therefore, we expect that lobbying activities have different outcomes among the three types of ownership in the hospital industry. AHA does not claim ownership of any content, including content incorporated by permission into AHA produced materials, created by any third party and cannot grant permission to use, distribute or otherwise reproduce such third party content. Therefore, we expect this cost saving effect only exists in NFP and for-profit hospitals. The unit is staffed with specially trained personnel and contains monitoring and specialized support equipment for treatment of patients who, because of shock, trauma, or other life-threatening conditions, require intensified, comprehensive observation and care. System affiliation does not preclude network participation. The American Hospital Association conducts an annual survey of hospitals in the United States. A unit that must be separate from the newborn nursery providing intensive care to all sick infants including those with the very lowest birth weights (less than 1500 grams). Rural Hospitals Infographic, Fast Facts on U.S. saved. Washington, 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. Thus, government hospitals have less incentive to lobby for expanded reimbursement coverage and Medicaid to reduce uncompensated care costs (Bovbjerg et al. For-profit hospitals can lawfully release patients who lack the ability to pay for further treatment after establishing that the patients are out of danger, whereas NFP hospitals are obligated to treat all conditions, whether life-threatening or not, regardless of the patients' financial or health insurance status (Healthcare Management Degree Guide [HMDG] 2020). In an increasingly competitive environment, it is critical that business organizations know how to boost performance. Our study explores lobbying's effects in different types of hospital ownership; we choose the hospital industry due to the co-existence of three different types of hospital ownership. The American Hospital Association conducts an annual survey of hospitals in the United States. Besides salaries (49 percent), hospital costs include supplies (17 percent), uncompensated care (13 percent), and miscellaneous expenditures (21 percent) (Patrick 2014). Get daily news updates from Healthcare IT News. Provides patient care of a more specialized nature than the usual medical and surgical care, on the basis of physicians orders and approved nursing care plans. To order print copies of AHA Hospital Statistics, call (800) AHA-2626 or visit the AHA online store. 5. Unlock this article by subscribing to STAT+ and enjoy your first 30 days free! Hospitals Infographics to provide visualizations for this data. Molinari, Alexander, Morlock, and Lyles (1995) find that size, location, and network are significantly associated with hospital performance. A specially staffed, specialty equipped, separate section of a hospital dedicated to the observation, care, and treatment of patients with life-threatening illnesses, injuries, or complications from which recovery is possible. We predict that Leverage is positively correlated with Uncomp. 9. AHA reports $6.4 million loss in 2018; lobbying holds steady In the NFP and for-profit subsamples, the estimated coefficients 1 on Lobby_dum and Lobby_exp are negative and significant. Lobbying 2000). The 2013). Compared to other political activities, lobbying has fewer restrictions and greater efficiency (Hansen and Mitchell 2000; Eun and Lee 2019). This study contributes to lobbying literature by empirically examining the effects of lobbying in the hospital industry and sheds light on distinctions in lobbying effects across the different types of organization ownership. When Lobby_dumt2 and Lobby_expt2 are the variables of interest, the results are consistent with those in Tables 35, except that the magnitude and significance are smaller than those in our main analyses. After reviewing previously cited estimates, we examine and independently validate supply expense data (collected by the American Hospital Association) for over A crucial stream of research on lobbying studies the direct relationship between lobbying activities and financial performance as measured by accounting-based and market-based outcomes. 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). 10. American Hospital Assn Profile: Summary OpenSecrets Sneak peek: New EY survey explores changing consumer telehealth preferences, Breaking down barriers to compliance and consumerization. AHA Center for Health Innovation Market Scan, Updates and Resources on Novel Coronavirus (COVID-19), Institute for Diversity and Health Equity, Rural Health and Critical Access Hospitals, National Uniform Billing Committee (NUBC), AHA Rural Health Care Leadership Conference, Individual Membership Organization Events, Map of Community Hospitals in the United States, View the Fast Facts: U.S. Community hospitals include academic medical centers or other teaching hospitals if they are nonfederal short-term hospitals. 2000). However, employee salaries in government and NFP hospitals are strictly regulated (Becker et al. We predict that Urban and Network are negatively correlated with Uncomp. Other intensive care. Hospitals with higher leverage are more likely to be financially constrained and thus to have limited resources. NOTE: Figures on this page are calculations by OpenSecrets based on data from the Senate Office of Public Records. Wang, Wan, Falk, and Goodwin (2001) find that urban hospitals incur higher labor cost; we predict that Urban is positively correlated with Salary. Modernizing healthcare payments: exploring the opportunities, challenges and solutions, Leverage a data lakehouse to drive incremental value and quick wins, Nurses' clinical decision-making gets boost from predictive modeling. AMA Annual Report | American Medical Association Lagged Effects of Hospital Lobbying on Performance. Lee and Baik (2010) find that lobbying can reduce tariffs in import/export businesses. Will not changing the provision keep multi-campus hospital systems from adopting EHRs? Largest Lobbying Whereas some hospitals could benefit from lobbying due to a specific rule or legislation changes, others might be hurt. Hospital & Healthsystem Assn of Pennsylvania, Oregon Assn of Hospitals & Health Systems. Larger hospitals have more resources to collect unpaid bills. 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. We predict that Teaching is positively correlated with Uncomp. Hospitals, 2022 | Map of Community Hospitals in the United States. Provides care to pediatric patients that is of a more Regarding the association between lobbying and stock market returns, prior research finds different results when using distinct market-based measures. Under this regulation, business organizations that spend more than $10,000 on lobbying must register and file reports that disclose lobbying activities and the amount spent on lobbying. Lobbying activities draw researchers' attention because lobbying expenses have grown immensely. Does government funding suppress nonprofits' political activity? Business organizations use lobbying as a vehicle to promote and protect their interests. If you look at the high-ranking legislators who are supporting AHA, it holds a clue of what may happen. (2016) and Cho et al. Because prior literature suggests that lobbying is an ongoing process (Chen et al. 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). The hospital industry has a broad spectrum of lobbying interests. Second, stakeholders are different.2 In NFP hospitals, the employees are one of the major stakeholders (Fritz 2020), an important constituency that can be satisfied with successful lobbying efforts, while investors are the core stakeholders in for-profit hospitals. All rights reserved. This finding supports our H2b, which is not a surprise because government hospitals have public funding for subsidizing uncompensated care costs. The effects of breadth and depth of information sharing, Corporate politics, governance, and value before and after Citizens United, Does electronic health record use improve hospital financial performance? Consistent with our expectations, we find that (1) lobbying is positively related to employee salaries in NFP hospitals, (2) lobbying is positively related to uncompensated care costs in NFP and for-profit hospitals, (3) lobbying is positively related to ROA in for-profit hospitals, and (4) lobbying has no significant effect on employee salaries, uncompensated care costs, and ROA in government hospitals. Community hospitals are defined as all nonfederal, short-term general, and other special hospitals. 20005. Since we predict that lobbying has different effects on employee salaries and/or uncompensated care costs based on the different types of hospital ownership, we further expect that lobbying will have different impacts on return on assets (ROA) among the three types of hospital ownership. American Hospital Assn Lobbying Profile OpenSecrets Please wait. 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. The results of these studies are not warranted when they are generalized across organization ownership. Two high-ranking Democrats who can throw a lot of weight around are supporting the bill- Ways and Means Chairman Sandy Levin (Mich.-D) and Health subpanel Chairman Pete Stark (Calif.-D). HIMSS23 Global Health Conference & Exhibition. It is not included in prior healthcare studies. Some studies find no relationship or a negative relationship between lobbying and future abnormal returns or Tobin's q (see Coates 2012; Igan, Mishra, and Tressel 2012; Skaife, Veenman, and Werner 2013; Hadani and Schuler 2013; Cao et al. Please Then, in Section III, we detail our research design, including the sample-selection procedure and the empirical methods that we use to test the hypotheses. Table 3 presents the results from estimating Model (1). Cardiac intensive care. Furthermore, it is important to note that lobbying has complex outcomes, and cost saving is only one of its goals. The results show that two-year-lagged lobbying has results similar to those in our main analyses, but three-year-lagged lobbying does not. Hospitals 2022 Infographics PDF, Fast Facts: U.S. We thank two anonymous reviewers and the editor for their comments that significantly strengthened the paper. However, the estimated coefficients are significant (p = 0.007 and p = 0.013, respectively) only in the NFP subsample, suggesting that lobbying raises employee salaries in NFP hospitals. It is not a surprise that Uncomp is higher on average in government hospitals compared to either for-profit or NFP hospitals, because Cram et al. To regulate lobbying and increase its accountability, the Lobbying Disclosure Act of 1995 became effective on January 1, 1996. AHA Hospital Statistics is published annually by Health Forum, an affiliate of the American Hospital Association. Nonprofit advocacy organizations: Their characteristics and activities, How does electronic health information exchange affect hospital performance efficiency? Hospitals 2023 Infographics PDF, Fast Facts on U.S. Photo by Freedom to Marry courtesy of Creative Commons license. 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. 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. Evidence from panel data, Uncompensated care provided by for-profit, not-for-profit, and government owned hospitals, The effect of changing state health policy on hospital uncompensated care, Academic earmarks and the returns to lobbying, Hospital ownership and public medical spending, The relationship of hospital ownership and service composition to hospital charges, Aspirations and corporate lobbying in the product market, Political connections and corporate bailouts, Advocating for policy change in nonprofit coalitions, The determinants of hospital profitability, Institutional logics, moral frames, and advocacy: Explaining the purpose of advocacy among nonprofit human-service organizations, The effects of hospital-physician integration strategies on hospital financial performance, In search of El Dorado: The elusive financial returns on corporate political investments, Disaggregating and explaining corporate political activity: Domestic and foreign corporations in national politics. It provides special expertise and facilities for the support of vital function and utilizes the skill of medical nursing and other staff experienced in the management of these problems. Total intensive care beds are not summed because the care provided is specialized. Hospital lobbying does not increase employee salaries in for-profit hospitals. While for-profit hospitals can make compensation decisions autonomously, employee salaries in government and NFP hospitals are strictly regulated (Becker, Townshend, Carnell, and Freerks 2013; Duggan 2000). All the above benefits gained from lobbying contribute positively toward business profitability. May include myocardial infarction, pulmonary care, and heart transplant units. The extant research only focuses on one type of organization ownership to study the effects of lobbying. 2022 by Health Forum LLC, an affiliate of the American Hospital Association. (2016). Panel B of Table 2 presents the descriptive statistics of the variables under the different types of hospital ownership. Taken together, our findings suggest that NFP hospitals lobby to protect employees' interests, while for-profit hospitals lobby to maximize investors' interests. Use the map below to find individual hospitals in the U.S. Click on the "Go to AHA Guide Profile" link to see how many staffed beds are in a hospital. We replace the continuous variables in Models (1)(3) with the changes in these variables.6 For example, _Uncomp is the difference between Uncomp in year t1 and year t, and _Lobby_exp is the difference between Lobby_exp in year t2 and year t1. Yangmei Wang, Texas State University, Department of Accounting, San Marcos, TX; Yuewu Li and Jiao Li, Texas Tech University, Rawls College of Business, Lubbock, TX, USA. The data below are examples of the types of insights that can be pulled from the AHA Annual Survey. Our paper provides evidence to understand that the effects of lobbying vary based on distinct hospital ownership types. The report was filed on Oct. 2, OHA exists to collaborate with member hospitals and health systems to ensure a healthy Ohio. Thus, the combined effects on hospital financial performance are unknown. Thus, we expect a positive relationship between hospital lobbying and employee salaries in NFP and government hospitals. CHA Publishes Lobbying Percentage of Dues for Medicare Cost Reports - California Hospital Association / CHA News CHA News 28 Oct 2021 CHA Publishes Lobbying Percentage of Dues for Medicare Cost Reports For CFOs, controllers Jennifer Newman Senior Vice President & Chief Financial Officer In the U.S., seven states have Medicaid-funded uncompensated care pools,3 which help hospitals defray the costs of uncompensated care. The means of MCI, Teaching, and Urban are slightly different from those in prior research because our sample includes more recent data. We also predict the directions of the control variables in Model (2). Because they have readily available public funding for subsidizing uncompensated care costs, government hospitals typically do not become involved in lobbying activities that are related to uncompensated care costs (Bovbjerg, Cuellar, and Holahan 2000). Both Medicare and Medicaid are government-sponsored health insurance plans. Open Secrets following the money in politics, OpenSecrets Following the money in politics. 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. Our findings suggest that NFP hospitals lobby to protect employees' interests and for-profit hospitals lobby to maximize investors' interests, while government hospitals are inactive or less interested in the above lobbying activities. Due to limitations of accessing other cost data, this study focuses on the effect of lobbying on uncompensated care costs reduction. Under the current prospective payment system, the reimbursement rate for a specific procedure/treatment at the Centers for Medicare and Medicaid Services (CMS) or insurance companies is predetermined, which creates tremendous pressures on hospitals (K. Chang and G. Chang 2017). 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. In 2020, the Medicaid reimbursement rate for child dental services in Florida was just 42.6% of what private insurance reimbursed on average, according to the American Dental Association. Other hospitals include nonfederal long term care hospitals and hospital units within an institution such as a prison hospital or school infirmary. 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. 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. All rights reserved. 2023 by the American Hospital Association. Some special interests retain lobbying firms, many of them located along Washington's legendary K Street; others have lobbyists working in-house. Therefore, like for-profit organizations, NFP organizations also have incentives to engage in the formulation and implementation of public policies. Hospitals and related healthcare institutions rank the 8th highest in lobbying with expenditures of over $1.79 billion over the past 22 years (Frankenfield 2020), but We predict that Size is positively correlated with Salary. What's wrong with this provision? The type of hospital ownership determines their various stakeholders' interests, which could potentially impact the purposes of hospitals and their lobbying behaviors. First, in cost management, we only study the effects of hospital lobbying on employee salaries and uncompensated care costs. 2000). Therefore, we posit our first set of hypotheses as follows: Hospital lobbying increases employee salaries in NFP hospitals. Table 4 presents the results from estimating Model (2). Given the fact that most of the studies focus only on one type of organization ownership when investigating the effects of lobbying (e.g., de Figueiredo and Silverman 2006; Lee and Baik 2010), generalizing the effects of lobbying across organization ownership types is not warranted. A 501(c)(3) tax-exempt, charitable organization, 1100 13th Street, NW, Suite 800 For example, Child and Grnbjerg (2007) suggest that lobbying helps NFP organizations access government grants or contracts. 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).