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The Social Role of Not-for-Profit Organizations: Hospital Provision of Charity Care

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  • Thorpe, Kenneth E
  • Phelps, Charles E

Abstract

During the 1980s, the state of New York shifted from a straight block grant to a matching grant method for reimbursing hospitals, with the matching rate varying from 0 to 75 percent across years. These changes allow estimation of pure "income" and "price" effects for hospitals' supply of uncompensated care (charity and bad debts). The price effect is positive and significant, but no income effect was found. Hospitals in more concentrated markets provide more charity care, as do teaching hospitals, and the presence of public hospitals in a market reduces private hospitals' provision of charity care. Copyright 1991 by Oxford University Press.

Suggested Citation

  • Thorpe, Kenneth E & Phelps, Charles E, 1991. "The Social Role of Not-for-Profit Organizations: Hospital Provision of Charity Care," Economic Inquiry, Western Economic Association International, vol. 29(3), pages 472-484, July.
  • Handle: RePEc:oup:ecinqu:v:29:y:1991:i:3:p:472-84
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    Cited by:

    1. Daniel Kessler & Mark McClellan, 2001. "The Effects of Hospital Ownership on Medical Productivity," NBER Working Papers 8537, National Bureau of Economic Research, Inc.
    2. Paul Gertler & Jennifer Kuan, 2009. "Does It Matter Who Your Buyer Is? The Role of Nonprofit Mission in the Market for Corporate Control of Hospitals," Journal of Law and Economics, University of Chicago Press, vol. 52(2), pages 295-306, May.
    3. Currie, Janet & Fahr, John, 2004. "Hospitals, managed care, and the charity caseload in California," Journal of Health Economics, Elsevier, vol. 23(3), pages 421-442, May.
    4. Mahmud Hassan & Gerard Wedig & Michael Morrisey, 2000. "Charity Care by Non-profit Hospitals: The Price of Tax-exempt Debt," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 7(1), pages 47-62.
    5. Ge Bai, 2013. "How Do Board Size and Occupational Background of Directors Influence Social Performance in For-profit and Non-profit Organizations? Evidence from California Hospitals," Journal of Business Ethics, Springer, vol. 118(1), pages 171-187, November.
    6. Jonathan Gruber, 1992. "The Effect of Price Shopping in Medical Markets: Hospital Responses to PPOs in California," NBER Working Papers 4190, National Bureau of Economic Research, Inc.
    7. Susan M. Sanders, 1995. "The “common sense” of the nonprofit hospital tax exemption: A policy analysis," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(3), pages 446-466.

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