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Hospital Ownership and Financial Performance: A Quantitative Research Review

Author

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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.

Suggested Citation

  • Yu-Chu Shen & Karen Eggleston & Joseph Lau & Christopher Schmid, 2005. "Hospital Ownership and Financial Performance: A Quantitative Research Review," NBER Working Papers 11662, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11662
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Augurzky, Boris & Engel, Dirk & Schmidt, Christoph M. & Schwierz, Christoph, 2009. "Ownership and Financial Performance in the German Hospital Sector," Ruhr Economic Papers 123, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. 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;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(1), pages 3-16, February.
    4. Deborah Chollet & Su Liu & Gilbert Gimm & Cheryl Fahlman & Laurie Felland & Anneliese Gerland & Michelle Banker & Allison Liebhaber, "undated". "Analysis of Niche Hospitals in Texas and the Financial Impact on General Hospitals," Mathematica Policy Research Reports 12f7e74cad0541e99a45aac4c, Mathematica Policy Research.
    5. repec:zbw:rwidps:0054 is not listed on IDEAS
    6. repec:zbw:rwirep:0123 is not listed on IDEAS
    7. 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.
    8. Boris Augurzky & Dirk Engel & Christoph Schwierz, 2006. "Who gets the Credit? Determinants of the Probability of Default in the German Hospital Sector," RWI Discussion Papers 0054, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    9. 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.
    10. repec:ebl:ecbull:v:9:y:2007:i:12:p:1-10 is not listed on IDEAS
    11. 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.
    12. Augurzky, Boris & Engel, Dirk & Schwierz, Christoph, 2006. "Who gets the Credit? Determinants of the Probability of Default in the German Hospital Sector," RWI Discussion Papers 54, RWI - Leibniz-Institut für Wirtschaftsforschung.
    13. Charles Hegji, 2007. "A brief look at hospital profits by outpatient services offered," Economics Bulletin, AccessEcon, vol. 9(12), pages 1-10.
    14. repec:ebl:ecbull:v:13:y:2008:i:2:p:1-10 is not listed on IDEAS
    15. repec:mpr:mprres:5196 is not listed on IDEAS
    16. 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.
    17. 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.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General

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