The Effects of Hospital Ownership on Medical Productivity

42 Pages Posted: 11 Oct 2001 Last revised: 3 Feb 2015

See all articles by Daniel P. Kessler

Daniel P. Kessler

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Mark B. McClellan

Brookings Institution; Council of Economic Advisors; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: October 2001

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

Kessler, Daniel Philip and McClellan, Mark B., The Effects of Hospital Ownership on Medical Productivity (October 2001). NBER Working Paper No. w8537. Available at SSRN: https://ssrn.com/abstract=286962

Daniel Philip Kessler (Contact Author)

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Mark B. McClellan

Brookings Institution ( email )

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