Abstract

http://ssrn.com/abstract=1002687
 
 

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What Do Nonprofit Hospitals Maximize? Medical Service Provision and Market Ownership Mix


Jill R. Horwitz


UCLA School of Law; National Bureau of Economic Research (NBER)

Austin Nichols


The Urban Institute

June 1, 2008

U of Michigan Law & Economics, Olin Working Paper No. 07-014
NBER Working Paper No. 13246

Abstract:     
Conflicting theories of the nonprofit firm have existed for several decades yet empirical research has not resolved these debates, partly because the theories are not easily testable but also because empirical research generally considers organizations in isolation rather than in markets. Here we examine three types of hospitals - nonprofit, for-profit, and government - and their spillover effects. We look at the effect of for-profit ownership share within markets in two ways, on the provision of medical services and on operating margins at the three types of hospitals. We find that nonprofit hospitals' medical service provision systematically varies by market mix. We find no significant effect of for-profit market share on the operating margins of nonprofit hospitals. These results fit best with theories in which hospitals maximize their own output.

Number of Pages in PDF File: 76

Keywords: medical service provision, nonprofit firm

JEL Classification: I1, L1, L3, L22, H1

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Date posted: August 1, 2007 ; Last revised: June 25, 2008

Suggested Citation

Horwitz, Jill R. and Nichols, Austin, What Do Nonprofit Hospitals Maximize? Medical Service Provision and Market Ownership Mix (June 1, 2008). U of Michigan Law & Economics, Olin Working Paper No. 07-014; NBER Working Paper No. 13246. Available at SSRN: http://ssrn.com/abstract=1002687 or http://dx.doi.org/10.2139/ssrn.1002687

Contact Information

Jill R. Horwitz (Contact Author)
UCLA School of Law ( email )
Box 951476
Los Angeles, CA 90095-1476
United States
310-206-1577 (Phone)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Austin Nichols
The Urban Institute ( email )
2100 M Street, NW
Washington, DC 20037
United States
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