Public vs. Private Provision of Charity Care? Evidence from the Expiration of Hill-Burton Requirements in Florida

Abstract

This paper explores the consequences of the expiration of charity care requirements imposed on private hospitals by the Hill-Burton Act. We examine delivery care and the health of newborns using the universe of Florida births from 1989-2003 combined with hospital data from the American Hospital Association. We find that charity care requirements were binding on hospitals, but that private hospitals under obligation "cream skimmed" the least risky maternity patients. Conditional on patient characteristics, they provided less intensive maternity services but without compromising patient health. When obligations expired, private hospitals quickly reduced their charity caseloads, shifting maternity patients to public hospitals. There they received more intensive services, but did not experience improvements in health. These results suggest that public hospitals provided services less efficiently than private hospitals constrained to provide charity care.