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Hospital Ownership Mix Efficiency in the US: An Exploratory Study

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Author Info
Rexford E. Santerre
John A. Vernon

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Abstract

This paper offers an empirical test of ownership mix efficiency in the U.S. hospital services industry. The test compares the benefits of quality assurance with the costs from the attenuation of property rights that result from an increased presence of nonprofit organizations. The empirical results suggest that too many not-for-profit and public hospitals may exist in the typical market area of the U.S. The policy implication is that more quality of care per dollar might be obtained by attracting a greater percentage of for-profit hospitals into some market areas. This conclusion, however, is tempered with several caveats. We discuss these and also make recommendations for further research.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11192.

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Date of creation: Mar 2005
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Handle: RePEc:nbr:nberwo:11192

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Find related papers by JEL classification:
I1 - Health, Education, and Welfare - - Health
L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Svorny, Shirley V, 1987. "Physician Licensure: A New Approach to Examining the Role of Professional Interests," Economic Inquiry, Oxford University Press, vol. 25(3), pages 497-509, July.
  2. Keeler, Theodore E & Ying, John S, 1996. "Hospital Costs and Excess Bed Capacity: A Statistical Analysis," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 470-81, August. [Downloadable!] (restricted)
  3. Paul L. Joskow, 1980. "The Effects of Competition and Regulation on Hospital Bed Supply and the Reservation Quality of the Hospital," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 421-447, Autumn. [Downloadable!] (restricted)
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  4. Daniel P. Kessler & Mark B. McClellan, 2002. "The Effects of Hospital Ownership on Medical Productivity," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 488-506, Autumn.
  5. Dranove, David & White, William D, 1994. "Recent Theory and Evidence on Competition in Hospital Markets," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 3(1), pages 169-209, Spring.
  6. Hirth, Richard A., 1999. "Consumer information and competition between nonprofit and for-profit nursing homes," Journal of Health Economics, Elsevier, vol. 18(2), pages 219-240, April. [Downloadable!] (restricted)
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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)
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