Thursday, November 6, 2008
Horwitz and Nichols Report on How Nonprofit Ownership Affects Rural Hospitals
Jill R. Horwitz (Michigan) and Austin Nichols (the Urban Institute) have posted Rural Hospital Ownership and Competition on SSRN. Here is the abstract:
This paper asks how hospital ownership - nonprofit,
for-profit, or government - affects medical service provision in the
rural context. Here we consider two distinct ownership effects: 1) the
direct effect of hospital ownership and 2) the spillover effect of the
market mix of hospital types on a hospital's service offerings. We find
that ownership matters a great deal in the rural context. Nonprofit
are more likely than for-profit hospitals to offer unprofitable
services, many of which have previously been found to be in short
supply in rural areas. Nonprofits also respond less than for-profits to
a change in profitability of services. Moreover, nonprofit
hospitals with more for-profit competitors act more like for-profits
than other nonprofits, perhaps because they must make up for lost
revenue due to cream-skimming by for-profit hospitals or because the
characteristics of those markets favor that type of behavior.
LHM
http://lawprofessors.typepad.com/nonprofit/2008/11/horwitz.html