THE EFFECT OF HOSPITAL FINANCIAL CHARACTERISTICS ON QUALITY OF CARE

Objective.-To assess the relationship among hospital financial charact eristics, patient payer mix, and the incidence of negligent medical in juries. Design.-Retrospective medical record review linked to hospital financial reports. Setting.-Acute care hospitals in New York State in 1984. Population.-Stratified, random sample of 30195 medical records from 51 acute care hospitals. Main Outcome Measures.-Hospital rates of medical injury and substandard care were developed from reviews of 30 195 medical records at 51 acute care hospitals in New York in 1984. H ospital-level variables representing financial status, hospital staffi ng, and the proportion of self-pay and Medicaid hospital discharges we re compiled from a variety of secondary sources. Results.-The likeliho od of negligent medical injury was highest in those hospitals with the lowest inpatient operating costs per hospital discharge (odds ratio, 2.8; 95% confidence interval, 1.5 to 5.5). The effect of low inpatient operating costs was marked among hospitals in financial distress, man y of which served indigent populations. Conclusions.-Patients admitted to hospitals that are unable to expend sufficient resources on patien t care may be at higher risk of substandard care. Further study of the effect of hospital financial status on quality of care appears to be warranted.