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Hospital Ownership and Financial Performance: A Quantitative Research Review

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  • Yu-Chu Shen
  • Karen Eggleston
  • Joseph Lau
  • Christopher Schmid

Abstract

We apply meta-analytic methods to conduct a quantitative review of the empirical literature since 1990 comparing financial performance of US for-profit, not-for-profit, and government-owned general acute hospitals. We find that the diverse results in the hospital ownership literature can be explained largely by differences in authors' underlying theoretical frameworks, assumptions about the functional form of the dependent variables, and model specifications. Weaker methods and functional forms tend to predict larger differences in financial performance between not-for-profits and for-profits. The combined estimates across studies suggest little difference in cost among all three types of hospital ownership, and that for-profit hospitals generate more revenue and greater profits than not-for-profit hospitals, although the difference is only of modest economic significance. There is little difference in revenue or profits between government and not-for-profit hospitals.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11662.

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Date of creation: Oct 2005
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Handle: RePEc:nbr:nberwo:11662

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References

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  1. Sloan, Frank A. & Picone, Gabriel A. & TaylorJr., Donald H. & Chou, Shin-Yi, 2001. "Hospital ownership and cost and quality of care: is there a dime's worth of difference?," Journal of Health Economics, Elsevier, vol. 20(1), pages 1-21, January.
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  7. Darius Lakdawalla & Tomas Philipson, 1998. "Nonprofit Production and Competition," NBER Working Papers 6377, National Bureau of Economic Research, Inc.
  8. Janos Kornai & Eric Maskin & Gerard Roland, 2002. "Understanding the Soft Budget Constraint," Economics Working Papers 0019, Institute for Advanced Study, School of Social Science.
  9. Anup Malani & Tomas Philipson & Guy David, 2003. "Theories of Firm Behavior in the Nonprofit Sector. A Synthesis and Empirical Evaluation," NBER Chapters, in: The Governance of Not-for-Profit Organizations, pages 181-216 National Bureau of Economic Research, Inc.
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  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.
  13. Mark Duggan, 2002. "Hospital Market Structure and the Behavior of Not-For-Profit Hospitals," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 433-446, Autumn.
  14. Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier.
  15. T.D. Stanley & Stephen B. Jarrell, 1998. "Gender Wage Discrimination Bias? A Meta-Regression Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 947-973.
  16. Card, David & Krueger, Alan B, 1995. "Time-Series Minimum-Wage Studies: A Meta-analysis," American Economic Review, American Economic Association, vol. 85(2), pages 238-43, May.
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Citations

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Cited by:
  1. Deborah Chollet & Su Liu & Gilbert Gimm & Cheryl Fahlman & Laurie Felland & Anneliese Gerland & Michelle Banker & Allison Liebhaber, 2006. "Analysis of Niche Hospitals in Texas and the Financial Impact on General Hospitals," Mathematica Policy Research Reports 5196, Mathematica Policy Research.
  2. repec:ebl:ecbull:v:9:y:2007:i:12:p:1-10 is not listed on IDEAS
  3. Pierre Koning & Joëlle Noailly & Sabine Visser, 2007. "Do Not-For-Profits Make a Difference in Social Services? A Survey Study," De Economist, Springer, vol. 155(3), pages 251-270, September.
  4. Liu, Gordon G. & Li, Lin & Hou, Xiaohui & Xu, Judy & Hyslop, Daniel, 2009. "The role of for-profit hospitals in medical expenditures: Evidence from aggregate data in China," China Economic Review, Elsevier, vol. 20(4), pages 625-633, December.
  5. Karen Eggleston & Yu-Chu Shen & Joseph Lau & Christopher H. Schmid & Jia Chan, 2006. "Hospital Ownership and Quality of Care: What Explains the Different Results?," NBER Working Papers 12241, National Bureau of Economic Research, Inc.
  6. Newton da Costa, Jr. & Marcus Lima & Edgar Lanzer & Ana Lopes, 2008. "DEA investment strategy in the Brazilian stock market," Economics Bulletin, AccessEcon, vol. 13(2), pages 1-10.
  7. Eila Kankaanpää & Ismo Linnosmaa & Hannu Valtonen, 2011. "Public health care providers and market competition: the case of Finnish occupational health services," The European Journal of Health Economics, Springer, vol. 12(1), pages 3-16, February.
  8. Boris Augurzky & Dirk Engel & Christoph M. Schmidt & Christoph Schwierz, 2009. "Ownership and Financial Performance in the German Hospital Sector," Ruhr Economic Papers 0123, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  9. Charles Hegji, 2007. "A brief look at hospital profits by outpatient services offered," Economics Bulletin, AccessEcon, vol. 9(12), pages 1-10.
  10. Pierre Koning & Joëlle Noailly & Sabine Visser, 2007. "Do non-profits make a difference? Evaluating non-profit vis-à -vis for-profit organisations in social services," CPB Document 142, CPB Netherlands Bureau for Economic Policy Analysis.
  11. repec:ebl:ecbull:v:13:y:2008:i:2:p:1-10 is not listed on IDEAS

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