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Grants and cost shifting in outpatient clinics

Author

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  • Robert Rosenman
  • Tong Li
  • Dan Friesner

Abstract

Cost shifting for a non-profit, revenue maximizing healthcare provider which faces a constraint that profit must be non-negative is examined, focusing on fixed payment programmes like Medicare. In addition, how grant money affects cost shifting and extend the empirical analysis of cost shifting to outpatient clinics, using data from publicly funded clinics in California is explored. The results are consistent with cost shifting, and indicate that the cause may be that the Medicare payment system cuts revenues more than costs, forcing clinics to subsidize the care of Medicare patients by increasing prices to other patients.

Suggested Citation

  • Robert Rosenman & Tong Li & Dan Friesner, 2000. "Grants and cost shifting in outpatient clinics," Applied Economics, Taylor & Francis Journals, vol. 32(7), pages 835-843.
    • Handle: RePEc:taf:applec:v:32:y:2000:i:7:p:835-843
    DOI: 10.1080/000368400322174
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    References listed on IDEAS

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    1. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    2. Foster, Richard W., 1985. "Cost-shifting under cost reimbursement and prospective payment," Journal of Health Economics, Elsevier, vol. 4(3), pages 261-271, September.
    3. Dranove, David, 1988. "Pricing by non-profit institutions : The case of hospital cost-shifting," Journal of Health Economics, Elsevier, vol. 7(1), pages 47-57, March.
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    Cited by:

    1. Robert Rosenman & Daniel Friesner & Christopher Stevens, 2005. "Do Health Care Providers Quality Discriminate? Empirical Evidence from Primary Care Outpatient Clinics," Eastern Economic Journal, Eastern Economic Association, vol. 31(4), pages 649-670, Fall.
    2. Daniel Friesner & Robert Rosenman, 2001. "The Property Rights Theory of the Firm and Mixed Competition: A Counter-Example in the US Health Care Industry," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(3), pages 437-450.
    3. Wagner, Kathryn L., 2016. "Shock, but no shift: Hospitals' responses to changes in patient insurance mix," Journal of Health Economics, Elsevier, vol. 49(C), pages 46-58.
    4. Dan Friesner & Robert Rosenman, 2004. "Non-profit cost-adjusting with quality as a private good," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 511-523.
    5. Friesner, Daniel L., 2003. "An empirical examination of cost-adjusting in outpatient clinics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 31(6), pages 745-759.

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