Kim TH, McCue MJ; AcademyHealth. Meeting (2005 : Boston, Mass.).
Abstr AcademyHealth Meet. 2005; 22: abstract no. 3662.
Virginia Commonwealth University, Health Administration, 1108 E. Clay St., Richmond, VA 23298 Tel. (804)828-5329 Fax (804)828-1894
RESEARCH OBJECTIVE: This study aims to evaluate the relationship between the amount and the type (fixed vs. moveable) of capital expenditures of hospitals with their market, mission, operational, and financial factors after the Balanced Budget Act (BBA) of 1997.The research objectives of this study are to investigate the following questions: 1) Did hospital market conditions, such as competition, number of physicians and increased utilization by patients affect the demand for capital expenditures? 2) Did investor-owned and system-affiliated hospitals demonstrate a difference in capital investment? 3) How did the hospital capacity and complexity of services influence capital investment? 4) Did the amount of liquidity, cash flow and debt capital relate to the amount of capital expenditures? STUDY DESIGN: Empirical analysis for this study employs pooled cross-sectional and time series design. The empirical models are estimated by ordinary least squares (OLS) regressions and then heteroskedasticity and serial correlation are tested for further estimation. The dependent variable is defined as capital investment per unit of fixed assets, and is a function of previous stated market, mission, operational, financial and control variables. Models will be evaluated by type of investment (fixed vs. moveable) as well. Hospital financial statements data, including capital investment, are obtained from the Centers for Medicare and Medicaid Services (CMS) Medicare cost report data. Other data sources include the American Hospital Associations (AHA) Annual Survey of Hospitals and the Area Resource File (ARF). POPULATION STUDIED: To estimate the effects of being in the post-BBA period on the amount and type of investment, the study population consists of U.S. hospitals during the fiscal years 1998-2002. PRINCIPAL FINDINGS: Recent anecdotal evidence indicates that the average annual growth in hospital capital expenditure between 1997 and 2001 was just one percent (HFMA, 2004). More specific findings of this study will be based on the test of the following hypotheses: H1: Hospitals operating in markets with a greater number of physicians, patient utilization and competition will have capital investment. H2: For-profit and system-affiliated hospitals are more likely to possess a greater amount of capital investment. H3: Hospitals with a larger bed size, fewer unoccupied beds and wider range of services will have greater capital investment. H4: Hospitals with higher liquidity and cash flow and less debt capital will have greater capital investment. CONCLUSIONS: This study will demonstrate that Medicare reimbursement cuts from the Balanced Budget Act of 1997 may have impacted the funding of future hospital capital needs during the late 1990s and early 2000s. Results will also suggest that certain characteristics are critical in the amount and the type of hospital capital investment. IMPLICATIONS FOR POLICY, DELIVERY OR PRACTICE: Identification of the factors associated with capital investment will enable hospital managers and investors to monitor the capital need of hospitals and to improve their capital planning. In addition, the results will inform policy makers and government regulators if the difference in capital spending is attributable to market structure or hospital decisions.
Publication Types:
Keywords:
- Budgets
- Capital Expenditures
- Costs and Cost Analysis
- Hospital Bed Capacity
- Hospitals
- Hospitals, General
- Hospitals, Voluntary
- Humans
- Income
- Investments
- Uncompensated Care
- economics
- methods
- hsrmtgs
UI: 103623125
From Meeting Abstracts