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Hospital ownership and medical services: Market mix, spillover effects, and nonprofit objectives

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Author Info

  • Horwitz, Jill R.
  • Nichols, Austin

Abstract

Hospitals operate in markets with varied demographic, competitive, and ownership characteristics, yet research on ownership tends to examine hospitals in isolation. Here we examine three hospital ownership types - nonprofit, for-profit, and government - and their spillover effects. We estimate the effects of for-profit market share in two ways, on the provision of medical services and on operating margins at the three types of hospitals. We find that nonprofit hospitals' medical service provision systematically varies by market mix. We find no significant effect of market mix on the operating margins of nonprofit hospitals, but find that for-profit hospitals have higher margins in markets with more for-profits. These results fit best with theories in which hospitals maximize their own output.

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Bibliographic Info

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

Volume (Year): 28 (2009)
Issue (Month): 5 (September)
Pages: 924-937

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Handle: RePEc:eee:jhecon:v:28:y:2009:i:5:p:924-937

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

Related research

Keywords: Nonprofit Hospitals Market mix Medical services;

References

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Citations

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Cited by:
  1. Badi H. Baltagi & Yin-Fang Yen, 2014. "Hospital Treatment Rates and Spill-Over Effects: Does Ownership Matter?," Center for Policy Research Working Papers 165, Center for Policy Research, Maxwell School, Syracuse University.
  2. Seungchul Lee & Robert Rosenman, 2012. "Reimbursement and Investment: Propsective Payment and For-Profit Hospitals' Market Share," Working Papers 2012-3, School of Economic Sciences, Washington State University.
  3. Herr, Annika, 2010. "Quality and welfare in a mixed duopoly with regulated prices: The case of a public and a private hospital," DICE Discussion Papers 07, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  4. Katalin Katona & Marcel Canoy, 2013. "Welfare standards in hospital mergers," The European Journal of Health Economics, Springer, vol. 14(4), pages 573-586, August.
  5. Bayindir, Esra Eren, 2012. "Hospital ownership type and treatment choices," Journal of Health Economics, Elsevier, vol. 31(2), pages 359-370.
  6. Jinhyung Lee & Jeffrey S. McCullough & Robert J. Town, 2012. "The Impact of Health Information Technology on Hospital Productivity," NBER Working Papers 18025, National Bureau of Economic Research, Inc.
  7. Dewenter, Ralf & Jaschinski, Thomas & Kuchinke, Björn A., 2012. "Hospital market concentration and discrimination of patients," DICE Discussion Papers 63, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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