Lobbying Percentage We find that hospital lobbying increases employee salaries in NFP hospitals, reduces uncompensated care costs in NFP and for-profit hospitals, and increases ROA in for-profit hospitals; however, all these effects of lobbying are insignificant in government hospitals. 2013; Bovbjerg et al. DC Thus, government hospitals have less incentive to lobby for expanded reimbursement coverage and Medicaid to reduce uncompensated care costs (Bovbjerg et al. Lobbying has both negative and positive connotations. In untabulated analyses, we re-estimate the regression models without controlling Leverage. 2000; Duggan 2000) and therefore limit lobbying. Our findings demonstrate that lobbying impacts hospital performance for up to two years, but the effects in the second year are not as strong as those in the first year, suggesting that the effects of lobbying diminish as time goes by. Lobbying is an important avenue for business organizations to influence legislation, regulations, or policies in order to gain competitive advantage. All the above benefits gained from lobbying contribute positively toward business profitability. In the NFP and for-profit subsamples, the estimated coefficients 1 on Lobby_dum and Lobby_exp are negative and significant. 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. Shaffer, Quasney, and Grimm (2000) find a positive relationship between lobbying and net income in the airline industry. Prior research only focuses on one type of organization ownership, i.e., either not-for-profit (NFP), government, or for-profit, to study the effects of lobbying. Hospital Supply Expenses: An Important Ingredient in Health However, unlike for-profit organizations, NFP organizations may have different purposes when they engage in lobbying activities (McFarland 1995). W ASHINGTON Tom Nickels helped build the American Hospital Association into one of the biggest lobbying forces in Washington. The beneficiaries of Medicare and Medicaid are less likely to pay their bills in full amounts. To test H3, we develop Model (3) as follows: \begin{equation}\tag{3}RO{A_{i,t}} = {\delta _0} + {\delta _1}Lobb{y_{i,t - 1}} + \sum {Controls + Yea{r_t}} + Stat{e_i} + {\varepsilon _{i,t}} \end{equation}, Hospital staffing, organization, and quality of care: Cross-national findings, Quality improvement and hospital financial performance, Measuring rates of return on lobbying expenditures: An empirical case study of tax breaks for multinational corporations, Lobbying as a potent political marketing tool for firm performance: A closer look, Hospital ownership, performance, and outcomes: Assessing the state-of-the-science, Linking for-profit and nonprofit executive compensation: Salary composition and incentive structures in the U.S. hospital industry, The corporate value of (corrupt) lobbying, Lobbying, political connectedness and financial performance in the air transportation industry, An investigation of economic efficiency in California hospitals. Beyond conventional marketing and management strategies, lobbying is often used to shape the external environment by influencing legislation, regulations, or policies to gain advantages, such as increased market power (McWilliams, Van Fleet, and Cory 2002), tax reductions (Alexander, Mazza, and Scholz 2009), government bailouts (Faccio, Masulis, and McConnell 2006), government contracts (Hansen and Mitchell 2000), and federal funds (de Figueiredo and Silverman 2006). LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT, The Effect of Changes in Hospital Lobbying Expenses on Changes in Uncompensated Care, Becker, Townshend, Carnell, and Freerks 2013, Cao, Fernando, Tripathy, and Upadhyay 2018, Richter, Samphantharak, and Timmons (2009), Hochberg, Sapienza, and Vissing-Jrgensen 2009, Mathur, Singh, Thompson, and Nejadmalayeri 2013, Healthcare Management Degree Guide [HMDG] 2020, Davidoff, LoSasso, Bazzoli, and Zuckerman 2000, Gapenski, Vogel, and Langland-Orban (1993), Molinari, Alexander, Morlock, and Lyles (1995), Nauenberg, Brewer, Basu, Bliss, and Osborne 1999, https://www.aha.org/system/files/content/00-10/10uncompensatedcare.pdf, https://www.forbes.com/sites/adamandrzejewski/2019/06/26/top-u-s-non-profit-hospitals-ceos-are-racking-up-huge-profits, https://doi.org/10.1097/00005110-200005000-00004, https://www.beckershospitalreview.com/legal-regulatory-issues/physician-compensation-10-core-legal-and-regulatory-concepts.html, https://doi.org/10.1016/j.jairtraman.2016.03.009, https://doi.org/10.1016/j.jcorpfin.2017.12.012, https://www.opensecrets.org/federal-lobbying, https://doi.org/10.1177/000312240406900207, https://doi.org/10.1111/j.1540-6237.2007.00457.x, https://doi.org/10.1111/j.1740-1461.2012.01265.x, https://doi.org/10.1097/HMR.0000000000000068, https://doi.org/10.1177%2F0007650319843626, https://doi.org/10.1111/j.1540-6261.2006.01000.x, https://www.investopedia.com/investing/which-industry-spends-most-lobbying-antm-so/, https://www.thebalancesmb.com/stakeholder-2502118, https://www.houstonchronicle.com/news/houston-texas/houston/article/4-billion-health-care-for-poor-Texans-at-risk-as-6207561.php, https://www.healthcare-management-degree.net/faq/are-non-profit-or-for-profit-hospitals-better/, https://doi.org/10.1111/j.1475-679X.2009.00321.x, https://mpra.ub.uni-muenchen.de/51396/1/MPRA_paper_51396.pdf, https://doi.org/10.1016/j.amjmed.2003.10.037, https://doi.org/10.1007/s10551-010-0478-1, https://doi.org/10.1111/j.1541-0072.2006.00143.x, https://doi.org/10.1016/S0165-4101(03)00035-1, https://familiesusa.org/resources/explainer-medicaid-uncompensated-care-pools/, https://doi.org/10.1016/j.jbusres.2012.01.003, https://files.eric.ed.gov/fulltext/ED386775.pdf, https://doi.org/10.1097/00005650-199533020-00005, https://www.healthcaredive.com/news/hhs-starts-doling-out-12b-in-cares-funds-to-395-hospitals-in-covid-19-hot/577226/, https://doi.org/10.1177/107755879905600402, https://doi.org/10.1377/hlthaff.2015.0107, https://doi.org/10.1377/hlthaff.2015.1144, https://marketrealist.com/2014/11/analyzing-hospital-expenses/, https://www.npr.org/sections/health-shots/2020/02/12/804943655/doctors-push-back-as-congress-takes-aim-at-surprise-medical-bills, https://doi.org/10.1111/j.1540-5907.2009.00407.x, https://doi.org/10.1177/000765030003900202, https://www.healthcaredive.com/news/hospital-lobby-asks-feds-for-more-cares-funds-targeted-distribution/576239/, https://www.healthcaredive.com/news/hospital-nursing-groups-join-forces-to-lobby-congress-for-more-covid-19-fu/577252/, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2340501, https://doi.org/10.1017/S0022109011000457, Minimizing Overlapping Decision Rights Policy. According to the extant literature, one goal of hospital lobbying is to protect employees' incomes (Landers and Sehgal 2004; Pradhan 2020). Insurance allocations and spending on employee training are the other two hospital lobbying foci (Frankenfield 2020). Kim (2008) finds that a positive effect of lobbying on return on equity (ROE) exists in the S&P 500 Index's constituent firms. Community hospitals are defined as all nonfederal, short-term general, and other special hospitals. Other intensive care. Whereas some hospitals could benefit from lobbying due to a specific rule or legislation changes, others might be hurt. Due to limitations of accessing other cost data, this study focuses on the effect of lobbying on uncompensated care costs reduction. We thank two anonymous reviewers and the editor for their comments that significantly strengthened the paper. OHA exists to collaborate with member hospitals and health systems to ensure a healthy Ohio. Charity care is never expected to be reimbursed, and it is different from bad debts that hospitals incur when they bill patients but do not receive payment (AHA 2010). 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. Millions are stuck in dental deserts, with no access to oral health Get daily news updates from Healthcare IT News. Rachel Cohrs reports on the intersection of politics and health policy. Copyright 1998 - 2023 American Accounting Association. First, it extends lobbying research in the hospital industry by examining the relationship between lobbying and hospital performance. de Figueiredo and Silverman (2006) find that lobbying by public universities increases the amount of federal funding they can receive for academic research. The American Hospital Association conducts an annual survey of hospitals in the United States. The largest lobbyist group in the U.S. is the National Association of Realtors, who spent over $84 billion on lobbying in 2022. Rural Hospitals Infographic, COVID-19 in 2021: Pressure Continues on Hospital Margins Report, COVID-19 in 2021: The Potential Effect on Hospital Revenues, Bed Occupancy Percentage Over Time Animated Maps, Results from 2017 Tax-Exempt Hospitals Schedule H Community Benefit Reports. Regulations on government hospitals, including salary regulations, are stricter than those on other types of hospitals (Becker et al. When Lobby_dumt3 and Lobby_expt3 are the variables of interest, the significance disappears. Regardless of the other potential benefits, lobbying expenses generate a positive return in for-profit hospitals. Just kidding. Thus, we expect a positive relationship between hospital lobbying and employee salaries in NFP and government hospitals. The means of most control variables in our sample, including Size, MedicareMix, MedicaidMix, and Network, are comparable with those in Collum et al. 2015). Long term care hospitals may be defined by different methods; here they include other hospitals with an average length of stay of 30 or more days. Web3rd Quarter, 2020 Q3 Report In Q3, MORRISON PUBLIC AFFAIRS GROUP lobbied for AMERICAN HOSPITAL ASSOCIATION, earning $20,000. What's wrong with this provision? Hospital Lobbying and Performance | Journal of Governmental 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. Ohio Hospital Association 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. Data for the most recent year was downloaded on April 24, 2023 and includes spending from January 1 - December 31. saved. Here are some highlights. 2006) and government contracts (Hansen and Mitchell 2000). 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. Lobby_expt2 and Lobby_expt3 are continuous variables of Lobby_exp in year t2 and year t3, respectively. Regression of Hospital Net Patient Revenue on Lobbying. Lobbying may have other substantial savings/benefits from the other items, such as employee training and insurance allocations. 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. The mean (median) of Salary is 0.456 (0.383). We also find that the effects of lobbying on employee salaries, uncompensated care costs, and ROA are not significant in government hospitals. In order to protect stakeholders' interests, hospitals lobby legislators to influence policies such as compensation for goods and services, licensing, and oversight (Landers and Sehgal 2004; Pradhan 2020). After the introduction, this study is arranged as follows. Taken together, our findings suggest that NFP hospitals lobby to protect employees' interests, while for-profit hospitals lobby to maximize investors' interests.

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