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The Effects of Hospital Ownership on Medical Productivity

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Author Info
Daniel P. Kessler
Mark B. McClellan
Abstract

To develop new evidence on how hospital ownership and other aspects of hospital market composition affect health care productivity, we analyze longitudinal data on the medical expenditures and health outcomes of the vast majority of nonrural elderly Medicare beneficiaries hospitalized for new heart attacks over the period 1985-1996. We find that the effects of ownership status are quantitatively important. Areas with a presence of for-profit hospitals have approximately 2.4% lower levels of hospital expenditures, but virtually the same patient health outcomes. We conclude that for-profit hospitals have important spillover benefits for medical productivity.

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Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 33 (2002)
Issue (Month): 3 (Autumn)
Pages: 488-506
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:rje:randje:v:33:y:2002:i:autumn:p:488-506

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  1. Jill R. Horwitz & Austin Nichols, 2007. "What Do Nonprofits Maximize? Nonprofit Hospital Service Provision and Market Ownership Mix," NBER Working Papers 13246, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Carine Milcent, 2005. "Hospital ownership, reimbursement systems and mortality rates," Health Economics, John Wiley & Sons, Ltd., vol. 14(11), pages 1151-1168. [Downloadable!]
  3. Brigitte Dormont & Carine Milcent, 2004. "The sources of hospital cost variability," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 927-939. [Downloadable!]
  4. Marco Castaneda & Dino Falaschetti, 2008. "Does a Hospital’s Profit Status Affect its Operational Scope?," Review of Industrial Organization, Springer, vol. 33(2), pages 129-159, September. [Downloadable!] (restricted)
  5. Rexford E. Santerre & John A. Vernon, 2006. "The consumer welfare implications of the hospital ownership mix in the US: an exploratory study," Health Economics, John Wiley & Sons, Ltd., vol. 15(11), pages 1187-1199. [Downloadable!]
  6. Lara Bryant & Sharmila Vishwasrao, 2006. "Physician Quality and Health Care for the Poor and Uninsured," Working Papers 06001, Department of Economics, College of Business, Florida Atlantic University. [Downloadable!]
  7. David Becker & Daniel Kessler & Mark McClellan, 2004. "Detecting Medicare Abuse," NBER Working Papers 10677, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Karen Eggleston & Yu-Chu Shen & Joseph Lau & Christopher H. Schmid & Jia Chan, 2008. "Hospital ownership and quality of care: what explains the different results in the literature?," Health Economics, John Wiley & Sons, Ltd., vol. 17(12), pages 1345-1362. [Downloadable!]
  9. Mehdi Farsi & Geert Ridder, 2006. "Estimating the out-of-hospital mortality rate using patient discharge data," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 983-995. [Downloadable!]
  10. Mehdi Farsi & Geert Ridder, 2006. "Estimating the Out-of-Hospital Mortality Rate Using Patient Discharge Data," IEPR Working Papers 06.45, Institute of Economic Policy Research (IEPR). [Downloadable!]
  11. Henry Hansmann & Daniel Kessler & Mark McClellan, 2002. "Ownership Form and Trapped Capital in the Hospital Industry," NBER Working Papers 8989, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Daniel P. Kessler & Jeffrey J. Geppert, 2005. "The Effects of Competition on Variation in the Quality and Cost of Medical Care," NBER Working Papers 11226, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Carine Milcent, 2003. "Ownership, System of reimbursement and Mortality rate relationships," DELTA Working Papers 2003-18, DELTA (Ecole normale supérieure). [Downloadable!]
  14. Jason R. Barro & Robert S. Huckman & Daniel P. Kessler, 2005. "The Effects of Cardiac Specialty Hospitals on the Cost and Quality of Medical Care," NBER Working Papers 11707, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Rexford E. Santerre & John A. Vernon, 2005. "Hospital Ownership Mix Efficiency in the US: An Exploratory Study," NBER Working Papers 11192, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. Rexford E. Santerre & John A. Vernon, 2005. "Testing for Ownership Mix Efficiency: The Case of the Nursing Home Industry," NBER Working Papers 11115, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Dana Goldman & John A. Romley, 2008. "Hospitals As Hotels: The Role of Patient Amenities in Hospital Demand," NBER Working Papers 14619, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  18. Bech, Mickael & Christiansen, Terkel & Dunham, Kelly & Lauridsen, Jørgen & Lyttkens, Carl Hampus & McDonald, Kathryn & McGuire, Alistair & TECH investigators, the, 2006. "How do economic incentives and regulatory factors influence adoption of cardiac technologies? Result from the TECH project," Working Papers 2006:15, Lund University, Department of Economics. [Downloadable!]
  19. Christoph Schwierz, 2009. "Expansion in Markets with Decreasing Demand – For-Profits in the German Hospital Industry," Ruhr Economic Papers 0106, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
  20. Biorn, Erik & Hagen, Terje P & Iversen, Tor & Magnussen, Jon, 2006. "Heterogeneity in Hospitals' Responses to a Financial Reform: A Random Coefficient Analysis of The Impact of Activity-Based Financing on Efficiency," MPRA Paper 8100, University Library of Munich, Germany. [Downloadable!]
    Other versions:
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