Changes in Hospital Quality after Conversion in Ownership Status

Abstract

This paper examines the effects of hospital conversions between For-Profit and Not-For-Profit forms on quality of medical care. The sample includes Medicare patients treated in California's private hospitals from 1990 to 1998 for Acute Myocardial Infarction and Congestive Heart Failure. The results suggest that converted hospitals have experienced quality changes before conversion, which may bias the estimated effects. Both conversions are found to have some adverse consequences regarding quality. Hospitals that converted to FP form show an increase in AMI mortality rates, while those converted to NFP status indicate an increase in CHF mortality and re-admission rates of AMI patients.

Keywords: Ownership Conversions, Hospital Quality, Mortality, Medicare Beneficiaries

JEL Classification: L31, I18, I11