Primary Submission Category: Health systems
Decomposing the increase in United States short term acute care hospital assets over time, 2000-2019
Authors: Stephanie Teeple Caroline Andy William L. Schpero Paula Chatterjee
Presenting Author: Stephanie Teeple*
Hospital assets (e.g., cash, investments, buildings, and land) are integral to health care delivery and have grown exponentially over the past 20 years, from $750 billion in 2000 to over $1.6 trillion in 2019. Despite this level of growth, little is understood about its drivers or relationship to quality of care, which has important implications for the viability of health systems as well as the function of hospital markets. In this study we evaluate the extent to which variation in total hospital assets is explained by variation at the hospital-, health system- and market-levels. Then, we use a Kitagawa-Oaxaca-Blinder decomposition to examine whether the increase in hospital assets over time is explained by changes in the levels of covariates commonly considered as inputs to hospital wealth, or if there is evidence of changes in the relationship (e.g., the coefficients) between these covariates and total assets over time. We use Medicare Cost Reports compiled by RAND from 2000 to 2019. Hospital-level predictors included well-established inputs to hospital wealth: size, urbanicity, net patient revenue, investment income, other income, ownership, and administrative costs. We use the cube-root transform of hospital assets as outcome. We find variation between hospitals explained the majority of variance in total assets, with less contribution from variation between health systems and markets. Additionally, changes in hospital-level covariates only explained 40.5% of the increase in total assets from 2010 to 2019. The largest contribution from a hospital-level covariate was net patient revenue (64.1%) but its contribution declined over time. The remaining 59.5% was due to changes in other hospital-level coefficients or from unmeasured factors. These results suggest there are hospital wealth disparities within markets and health systems, and that new, and currently unmeasured, contextual factors may be driving the accumulation of assets for wealthy hospitals.