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The Effects of Hospital Ownership on Medical Productivity

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  • Daniel P. Kessler
  • Mark B. McClellan
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    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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    Bibliographic 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

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    Handle: RePEc:rje:randje:v:33:y:2002:i:autumn:p:488-506

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    Cited by:
    1. 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.
    2. David Becker & Daniel Kessler & Mark McClellan, 2004. "Detecting Medicare Abuse," NBER Working Papers 10677, National Bureau of Economic Research, Inc.
    3. Carine Milcent, 2014. "Coût des soins hospitaliers : effet de la concurrence par la qualité," PSE Working Papers, HAL halshs-01010327, HAL.
    4. 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.
    5. Daidone, Silvio & Street, Andrew, 2013. "How much should be paid for specialised treatment?," Social Science & Medicine, Elsevier, Elsevier, vol. 84(C), pages 110-118.

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