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Does Corporate Ownership Matter? Service Provision in the Hospital Industry

  • Jill R. Horwitz
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    Three types of firms %uF818 nonprofit, for-profit, and government %uF818 own U.S. hospitals, yet we do not know whether ownership results in the specialization of medical service provision. This study of over 30 medical services in urban, general hospitals (1988-2000) shows that ownership types specialize in medical services according to the profitability of those services. The paper examines three theories to explain the differences: 1) objectives, 2) capital prices, and 3) market characteristics. The findings are best explained by differences in the objectives adopted by hospital types rather than differences in capital constraints faced by them. Preliminary evidence suggests that hospital behavior depends on the ownership form of neighboring hospitals.

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    File URL: http://www.nber.org/papers/w11376.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11376.

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    Date of creation: May 2005
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    Handle: RePEc:nbr:nberwo:11376
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