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). In addition, the healthcare industries had been lobbying the Affordable Care Act (ACA) since it was implemented in 2010. Except for the Revolving Door section, content on this site is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License by OpenSecrets.org. Wang, Wan, Falk, and Goodwin (2001) find that urban hospitals incur higher labor cost; we predict that Urban is positively correlated with Salary. Lobbying is a primary avenue through which business organizations attempt to influence legislation, regulations, or policies. Well, who's up for re-election? Dorn Policy Group, Inc. 101 N. 1st Avenue 20th Floor, Suite 2090 Phoenix, Arizona 85003 Telephone: 602-606-4667 We present the results in Table 7. Search for other works by this author on: To test our first set of hypotheses, we develop Model (1) as follows: \(\def\upalpha{\unicode[Times]{x3B1}}\)\(\def\upbeta{\unicode[Times]{x3B2}}\)\(\def\upgamma{\unicode[Times]{x3B3}}\)\(\def\updelta{\unicode[Times]{x3B4}}\)\(\def\upvarepsilon{\unicode[Times]{x3B5}}\)\(\def\upzeta{\unicode[Times]{x3B6}}\)\(\def\upeta{\unicode[Times]{x3B7}}\)\(\def\uptheta{\unicode[Times]{x3B8}}\)\(\def\upiota{\unicode[Times]{x3B9}}\)\(\def\upkappa{\unicode[Times]{x3BA}}\)\(\def\uplambda{\unicode[Times]{x3BB}}\)\(\def\upmu{\unicode[Times]{x3BC}}\)\(\def\upnu{\unicode[Times]{x3BD}}\)\(\def\upxi{\unicode[Times]{x3BE}}\)\(\def\upomicron{\unicode[Times]{x3BF}}\)\(\def\uppi{\unicode[Times]{x3C0}}\)\(\def\uprho{\unicode[Times]{x3C1}}\)\(\def\upsigma{\unicode[Times]{x3C3}}\)\(\def\uptau{\unicode[Times]{x3C4}}\)\(\def\upupsilon{\unicode[Times]{x3C5}}\)\(\def\upphi{\unicode[Times]{x3C6}}\)\(\def\upchi{\unicode[Times]{x3C7}}\)\(\def\uppsy{\unicode[Times]{x3C8}}\)\(\def\upomega{\unicode[Times]{x3C9}}\)\(\def\bialpha{\boldsymbol{\alpha}}\)\(\def\bibeta{\boldsymbol{\beta}}\)\(\def\bigamma{\boldsymbol{\gamma}}\)\(\def\bidelta{\boldsymbol{\delta}}\)\(\def\bivarepsilon{\boldsymbol{\varepsilon}}\)\(\def\bizeta{\boldsymbol{\zeta}}\)\(\def\bieta{\boldsymbol{\eta}}\)\(\def\bitheta{\boldsymbol{\theta}}\)\(\def\biiota{\boldsymbol{\iota}}\)\(\def\bikappa{\boldsymbol{\kappa}}\)\(\def\bilambda{\boldsymbol{\lambda}}\)\(\def\bimu{\boldsymbol{\mu}}\)\(\def\binu{\boldsymbol{\nu}}\)\(\def\bixi{\boldsymbol{\xi}}\)\(\def\biomicron{\boldsymbol{\micron}}\)\(\def\bipi{\boldsymbol{\pi}}\)\(\def\birho{\boldsymbol{\rho}}\)\(\def\bisigma{\boldsymbol{\sigma}}\)\(\def\bitau{\boldsymbol{\tau}}\)\(\def\biupsilon{\boldsymbol{\upsilon}}\)\(\def\biphi{\boldsymbol{\phi}}\)\(\def\bichi{\boldsymbol{\chi}}\)\(\def\bipsy{\boldsymbol{\psy}}\)\(\def\biomega{\boldsymbol{\omega}}\)\(\def\bupalpha{\bf{\alpha}}\)\(\def\bupbeta{\bf{\beta}}\)\(\def\bupgamma{\bf{\gamma}}\)\(\def\bupdelta{\bf{\delta}}\)\(\def\bupvarepsilon{\bf{\varepsilon}}\)\(\def\bupzeta{\bf{\zeta}}\)\(\def\bupeta{\bf{\eta}}\)\(\def\buptheta{\bf{\theta}}\)\(\def\bupiota{\bf{\iota}}\)\(\def\bupkappa{\bf{\kappa}}\)\(\def\buplambda{\bf{\lambda}}\)\(\def\bupmu{\bf{\mu}}\)\(\def\bupnu{\bf{\nu}}\)\(\def\bupxi{\bf{\xi}}\)\(\def\bupomicron{\bf{\micron}}\)\(\def\buppi{\bf{\pi}}\)\(\def\buprho{\bf{\rho}}\)\(\def\bupsigma{\bf{\sigma}}\)\(\def\buptau{\bf{\tau}}\)\(\def\bupupsilon{\bf{\upsilon}}\)\(\def\bupphi{\bf{\phi}}\)\(\def\bupchi{\bf{\chi}}\)\(\def\buppsy{\bf{\psy}}\)\(\def\bupomega{\bf{\omega}}\)\(\def\bGamma{\bf{\Gamma}}\)\(\def\bDelta{\bf{\Delta}}\)\(\def\bTheta{\bf{\Theta}}\)\(\def\bLambda{\bf{\Lambda}}\)\(\def\bXi{\bf{\Xi}}\)\(\def\bPi{\bf{\Pi}}\)\(\def\bSigma{\bf{\Sigma}}\)\(\def\bPhi{\bf{\Phi}}\)\(\def\bPsi{\bf{\Psi}}\)\(\def\bOmega{\bf{\Omega}}\)\begin{equation}\tag{1}Salar{y_{i,t}} = {\beta _0} + {\beta _1}Lobb{y_{i,t - 1}} + {\beta _2}MC{I_{i,t}} + {\beta _3}MedicareMi{x_{i,t}} + {\beta _4}MedicaidMi{x_{i,t}} + {\beta _5}Siz{e_{i,t}} + {\beta _6}Leverag{e_{i,t}} + {\beta _7}Teachin{g_{i,t}} + {\beta _8}Urba{n_{i,t}} + {\beta _9}Networ{k_{i,t}} + Yea{r_t} + Stat{e_i} + {\varepsilon _{i,t}} \end{equation}. 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). We predict that Teaching is positively correlated with Salary. Intensive care bed counts are reported on the AHA Annual Survey by approximately 80% of hospitals. For permission to reprint for commercial uses, Roundup: Seoul National University Hospital promotes AI- Roundup: Sunshine Private live with Kyra EMR, Congress gives $10M to DoD, Philips to advance AI-driven disease prediction, The fast-growing need for oversight of AI in healthcare, Enhancing patient safety with data matrix barcodes, Mental and behavioral healthcare bridging gaps with telemedicine, Massachusetts health plan hit with ransomware and service disruptions, How government mandates can become a strategic advantage. We predict that Leverage is negatively correlated with Salary. System is defined by AHA as either a multihospital or a diversified single hospital system. HOA Industry. According to the extant literature, one goal of hospital lobbying is to protect employees' incomes (Landers and Sehgal 2004; Pradhan 2020). We add Leverage as a control variable according to the comments from the 2018 AAA Annual Meeting. WebAbout the Supply of Nurses Rising Openings and Employment The US Bureau of Labor Statistics projects 194,500 average annual openings for registered nurses between 2020 and 2030, with employment projected to grow 9%. We follow prior studies to select the control variables. Our paper provides evidence to understand that the effects of lobbying vary based on distinct hospital ownership types. 1987; Scott et al. Table 2 reports the descriptive statistics of the variables used in our empirical analyses. The Importance of Lobbying for Education - Dorn Policy Group, Inc. Regression of Hospital Total Salaries on Lobbying. Excluded are hospitals not accessible by the general public, such as prison hospitals or college infirmaries. Lobbying likelihoods are very close in all three groups, suggesting that hospitals in all three groups have similar interests in lobbying. We predict that Size is positively correlated with Salary. The results suggest that hospital lobbying lowers uncompensated care costs in NFP and for-profit hospitals, supporting our H2a and H2c. 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. 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). Healthcare report: How are U.S. healthcare organizations embracing intelligent automation to enhance patient centricity? 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}. 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. Our study has several limitations that provide openings for future research. In Texas, for example, the rate is 70.3%. In the government subsample, the estimated coefficients 1 are insignificant, suggesting that hospital lobbying does not reduce uncompensated care costs in government hospitals. Some special interests retain lobbying firms, many of them located along Washington's legendary K Street; others have lobbyists working in-house. 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. More is not always better, Economic consequences of regulated changes in disclosure: The case of executive compensation, Corporate governance and lobbying strategies, Raising rivals' costs through political strategy: An extension of resource-based theory, Corporate PAC campaign contributions in perspective, Does the hospital board need a doctor? 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 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. First, patients are different. The American Hospital Association conducts an annual survey of hospitals in the United States. MCI is a continuous variable, but it does not change over the sample period. Please wait. Therefore, we posit our second set of hypotheses as follows: Hospital lobbying reduces uncompensated care costs in NFP hospitals. Future studies can utilize different techniques, such as surveys or interviews (i.e., self-reported data) or other available data to explore the effects of lobbying activities that are not regulated by the Lobbying Disclosure Act of 1995 as well as those that are conducted at the state and local level. 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. We predict that Teaching is positively correlated with Uncomp. To regulate lobbying and increase its accountability, the Lobbying Disclosure Act of 1995 became effective on January 1, 1996. For one, it's a bipartisan effort. Hospital lobbying increases employee salaries in government hospitals. 8. Will not changing the provision keep multi-campus hospital systems from adopting EHRs? Unlike government and NFP hospitals, for-profit hospitals can independently determine employee salaries based on profitability and thus are not involved in lobbying related to employee salaries (Barragato 2002). First, lobbying hospitals maintain a close relationship with legislators so that they can earlier obtain and better understand important information regarding regulatory agendas, policy changes, and other factors than nonlobbying hospitals. Future research could examine the effects of hospital lobbying on these two areas if relevant data are available. Regulations on government hospitals, including salary regulations, are stricter than those on other types of hospitals (Becker et al. Sneak peek: New EY survey explores changing consumer telehealth preferences, Breaking down barriers to compliance and consumerization. The mean (median) of Uncomp is 0.083 (0.067). NFP and for-profit hospitals lobby to classify more healthcare services as normal services rather than charity care and lobby to expand reimbursement coverage and Medicaid under the Affordable Care Act to reduce uncompensated care costs (Nikpay, Buchmueller, and Levy 2015, 2016). Lobbying may have other substantial savings/benefits from the other items, such as employee training and insurance allocations. Keeping quality employees and being fully staffed are critical for patient service (Stimpfel, Sloane, McHugh, and Aiken 2016; Aiken, Clarke, and Sloane 2002). 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. The American Hospital Association, founded in 1898, serves nearly 5,000 hospitals, healthcare systems, networks and other care providers. It is led by Richard Pollack, president and CEO. The Blue Cross Blue Shield Association is the parent organization of 35 BCBS companies across the U.S. Similar to our predictions in Model (1), we predict that the directions of the coefficients on MedicareMix and MedicaidMix are unknown. In this study, we use the most recent hospital financial and lobbying expense data to examine the effects of hospital lobbying on employee salaries, uncompensated care costs, and ROA. Cardiac intensive care. 2016). More recently, Brown (2016) finds that lobbying activities are associated with a high ROA, return on invested capital (ROIC), and ROE in Fortune 500 firms. 2000). 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. The results show that two-year-lagged lobbying has results similar to those in our main analyses, but three-year-lagged lobbying does not. Workforce Hospital costs include salaries (49 percent), supplies (17 percent), uncompensated care (13 percent), and miscellaneous expenses (21 percent) (Patrick 2014). 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. 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). Plenty of studies find that firms' abnormal returns are positively associated with lobbying (see Lo 2003; Hochberg, Sapienza, and Vissing-Jrgensen 2009; Hill, Kelly, Lockhart, and Van Ness 2013; Mathur, Singh, Thompson, and Nejadmalayeri 2013; Borisov, Goldman, and Gupta 2016). The extant research only focuses on one type of organization ownership to study the effects of lobbying. We use the r and cluster options of the regress function in Stata to ensure that standard errors are robust and clustered at the hospital level. 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). 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. 20005. Congress has responded by appropriating tens of billions of dollars for both hospitals and their employees (Muchmore 2020). Many recent publications use outdated hospital data. We keep using MCI, rather than _MCI, in the models. All the above benefits gained from lobbying contribute positively toward business profitability. 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. All rights reserved. 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. Follow the money on gun rights and gun control groups. Therefore, the Intensive care bed counts have been supplemented with FY2018 data reported in the CMS Healthcare Cost Report Information System (HCRIS). After yet another mass shooting, the national debate over gun policy renews. Economies of scale also play a role in hospital financial performance. Each state has specific minimum mandates on uncompensated care and differs in the ACA's Medicaid expansion. Molinari, Alexander, Morlock, and Lyles (1995) find that size, location, and network are significantly associated with hospital performance. 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. The mean (median) of ROA is 0.044 (0.037), which is consistent with that in Collum et al. According to the Center for Responsive Politics (2020), total annual lobbying spending has continually surpassed $3 billion since 2008. The hospital industry has a broad spectrum of lobbying interests. Feel free to distribute or cite this material, but please credit OpenSecrets. Lobbying activities draw researchers' attention because lobbying expenses have grown immensely. Neonatal intensive care. 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. AHA is supporting a bill that was introduced by Reps. Zack Space (Ohio-D) and Michael Burgess (Texas-R) in the House, and Sen. Charles Schumer (N.Y.-D) sponsored the Senate version. Hospital lobbying reduces uncompensated care costs in for-profit hospitals. Compared to other political activities, lobbying has fewer restrictions and greater efficiency (Hansen and Mitchell 2000; Eun and Lee 2019). (2009) find a similar tax reduction effect. This finding supports our H2b, which is not a surprise because government hospitals have public funding for subsidizing uncompensated care costs. Burn care. Does government funding suppress nonprofits' political activity? Therefore, the hospital industry provides us a unique setting to study the different outcomes of lobbying activities among various types of ownership within one industry. Lobbying for American Hospital Association by American 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. In Section V we present supplementary analyses. Therefore, like for-profit organizations, NFP organizations also have incentives to engage in the formulation and implementation of public policies. A full-time neonatologist serves as director of the NICU. 6. 2013; Bovbjerg et al. Table 8 presents the results, which are consistent with those in our main analyses in Table 4. To interpret the economic magnitude of the results, it is necessary to understand the dependent variable, Salary, and the variable of interest, Lobby_exp, because they are scaled measures rather than raw salaries and lobbying expenses. We predict the directions of the control variables in Model (1). 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. Insurance allocations and spending on employee training are the other two hospital lobbying foci (Frankenfield 2020). 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. It includes the number of hospitals, government hospitals, hospitals in each state, hospital beds, ICU beds, admissions, and expenses in the U.S. Fast Facts on U.S. In the U.S., seven states have Medicaid-funded uncompensated care pools,3 which help hospitals defray the costs of uncompensated care. AHA reports $6.4 million loss in 2018; lobbying holds steady Thus, this study sheds light on distinctions in lobbying among different types of ownership. (2015) find that lobbying is positively associated with income before extraordinary items, net income, and cash from operations. In fact, no other sector of the U.S. economy spends more on lobbying than the healthcare sector does, according to OpenSecrets. Particularly active clients often retain multiple lobbying firms, each with a team of lobbyists, to press their case for them. Please Includes mixed intensive care units. Noncommercial use of original content on www.aha.org is granted to AHA Institutional Members, their employees and State, Regional and Metro Hospital Associations unless otherwise indicated. WebThe following is a list of events affecting American television in 2023.Events listed include television show debuts, finales, and cancellations; channel launches, closures, and re-brandings; stations changing or adding their network affiliations; information on controversies, business transactions, and carriage disputes; and deaths of those who Lagged Effects of Hospital Lobbying on Performance. The coefficients on Lobby are positive and significant in NFP and for-profit hospitals, suggesting that hospital lobbying increases hospital net patient revenue in NFP and for-profit hospitals. He was the industrys dealmaker on every big health policy battle of the last 25 years, from the fight over the Affordable Care Act to the creation of Medicares drug benefit to the deficit reduction frenzy of the 1990s.