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Hospitals, managed care, and the charity caseload in California

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  • Currie, Janet
  • Fahr, John

Abstract

Many observers have blamed HMOs for increasing financial pressures on private hospitals and causing them to cut back on the provision of charity care. We examine this issue using data on all hospital discharges in California between 1988 and 1996. We find that public hospitals in counties with higher HMO penetration do take on a larger share of the county's charity caseload. However, these public hospitals also take on larger shares of most other types of patients. At the hospital level, we find little evidence that either for-profit or non-profit private hospitals respond to HMO penetration by turning away uninsured and Medicaid patients. On the contrary, in the for-profit sector higher HMO penetration is linked to reductions in the share of privately insured patients in the caseload, and corresponding increases in the share of Medicare patients and Medicaid births. Since HMO penetration reduces the price paid by privately insured patients they may be less attractive to for-profit hospitals relative to the publicly insured.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 23 (2004)
Issue (Month): 3 (May)
Pages: 421-442

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Handle: RePEc:eee:jhecon:v:23:y:2004:i:3:p:421-442

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Web page: http://www.elsevier.com/locate/inca/505560

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References

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  1. Janet Currie & Aaron Yelowitz, 1999. "Health Insurance and Less Skilled Workers," NBER Working Papers 7291, National Bureau of Economic Research, Inc.
  2. Jason R. Barro & David Cutler, 1997. "Consolidation in the Medical Care Marketplace: A Case Study from Masschusetts," NBER Working Papers 5957, National Bureau of Economic Research, Inc.
  3. Hilary Williamson Hoynes, 1996. "Local Labor Markets and Welfare Spells: Do Demand Conditions Matter?," NBER Working Papers 5643, National Bureau of Economic Research, Inc.
  4. Pauly, Mark V, 1987. "Nonprofit Firms in Medical Markets," American Economic Review, American Economic Association, vol. 77(2), pages 257-62, May.
  5. Cutler, David M & Gruber, Jonathan, 1996. "Does Public Insurance Crowd Out Private Insurance?," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 391-430, May.
  6. Noether, Monica, 1988. "Competition among hospitals," Journal of Health Economics, Elsevier, vol. 7(3), pages 259-284, September.
  7. Laurence C. Baker, 1995. "HMOs and Fee-For-Service Health Care Expenditures: Evidence from Medicare," NBER Working Papers 5360, National Bureau of Economic Research, Inc.
  8. Mark Duggan, 2000. "Hospital Ownership and Public Medical Spending," NBER Working Papers 7789, National Bureau of Economic Research, Inc.
  9. Thorpe, Kenneth E & Phelps, Charles E, 1991. "The Social Role of Not-for-Profit Organizations: Hospital Provision of Charity Care," Economic Inquiry, Western Economic Association International, vol. 29(3), pages 472-84, July.
  10. Edward C. Norton & Douglas O. Staiger, 1994. "How Hospital Ownership Affects Access to Care for the Uninsured," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 171-185, Spring.
  11. David M. Cutler & Louise Sheiner, 1997. "Managed Care and the Growth of Medical Expenditures," NBER Working Papers 6140, National Bureau of Economic Research, Inc.
  12. Richard G. Frank & David S. Salkever, 1991. "The Supply of Charity Services by Nonprofit Hospitals: Motives and Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 430-445, Autumn.
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Cited by:
  1. Markus Baldauf & J.M.C. Santos Silva, 2009. "On the use of robust regression in econometrics," Economics Discussion Papers 664, University of Essex, Department of Economics.
  2. Núria Mas, 2013. "Responding to financial pressures. The effect of managed care on hospitals’ provision of charity care," International Journal of Health Care Finance and Economics, Springer, vol. 13(2), pages 95-114, June.
  3. Janet Currie & Mehdi Farsi & W. Bentley Macleod, 2005. "Cut to the bone? Hospital takeovers and nurse employment contracts," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(3), pages 494-514, April.
  4. Daysal, N. Meltem, 2012. "Does uninsurance affect the health outcomes of the insured? Evidence from heart attack patients in California," Journal of Health Economics, Elsevier, vol. 31(4), pages 545-563.

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