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The Effects of Hospital Ownership on Medical Productivity

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  • Daniel Kessler
  • Mark McClellan

Abstract

To develop new evidence on the effects of hospital ownership and other aspects of hospital market composition on health care productivity, we analyze longitudinal data on the medical expenditures and health outcomes of the vast majority of nonrural elderly Medicare beneficiaries hospitalized for new heart attacks over the 1985-1996 period. We find that the effects of ownership status are quantitatively important. Areas with a presence of for-profit hospitals have approximately 2.4 percent lower levels of hospital expenditures, but virtually the same patient health outcomes. We conclude that for-profit hospitals have important spillover benefits for medical productivity.

Suggested Citation

  • Daniel Kessler & Mark McClellan, 2001. "The Effects of Hospital Ownership on Medical Productivity," NBER Working Papers 8537, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8537
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    Cited by:

    1. Laurent Gobillon & Carine Milcent, 2016. "Evaluating the Effect of Ownership Status on Hospital Quality: The Key Role of Innovative Procedures," Annals of Economics and Statistics, GENES, issue 121-122, pages 161-186.
    2. David Dranove & Daniel Kessler & Mark McClellan & Mark Satterthwaite, 2003. "Is More Information Better? The Effects of "Report Cards" on Health Care Providers," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 555-588, June.
    3. Grabowski, David C. & Hirth, Richard A., 2003. "Competitive spillovers across non-profit and for-profit nursing homes," Journal of Health Economics, Elsevier, vol. 22(1), pages 1-22, January.
    4. Petra Brhlikova, 2004. "Models of competition between one for-profit and one nonprofit firm," CERGE-EI Working Papers wp240, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    5. Idrissa Beogo & Chieh-Yu Liu & Yiing-Jenq Chou & Chuan-Yu Chen & Nicole Huang, 2014. "Health-Care-Seeking Patterns in the Emerging Private Sector in Burkina Faso: A Population-Based Study of Urban Adult Residents in Ouagadougou," PLOS ONE, Public Library of Science, vol. 9(5), pages 1-11, May.
    6. Shen, Yu-Chu, 2002. "The effect of hospital ownership choice on patient outcomes after treatment for acute myocardial infarction," Journal of Health Economics, Elsevier, vol. 21(5), pages 901-922, September.

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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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