Does the Influence of Competition and Compensation on Hospital Quality Vary with Ownership type?

50 Pages Posted: 3 Jan 2019 Last revised: 23 Mar 2019

See all articles by Linda H. Chen

Linda H. Chen

University of Idaho

Leslie Eldenburg

University of Arizona

Theodore H. Goodman

Purdue University - Department of Accounting

Multiple version iconThere are 2 versions of this paper

Date Written: December 19, 2018

Abstract

Institutional theory highlights differences across hospital ownership types on key dimensions related to monitoring and compensation. Using California hospital data from 2006 through 2014, we examine whether hospital ownership type moderates the determinants of patient quality outcomes. We find evidence that the effects of competition and compensation on patient quality differ by ownership type. Competition is positively associated with quality in nonprofit hospitals, while executive compensation is positively associated with quality in for-profit and district hospitals. Further analysis suggests that the role of competition in improving quality is stronger among nonprofit hospitals with weaker governance. Taken together, our results suggest that the drivers of quality vary across hospitals in ways consistent with institutional theory regarding differences in constraints and objectives across ownership types.

Keywords: Quality performance, competition, compensation, hospital quality monitoring

JEL Classification: I11, L21, L33, M11, M12

Suggested Citation

Chen, Linda H. and Eldenburg, Leslie G. and Goodman, Theodore H., Does the Influence of Competition and Compensation on Hospital Quality Vary with Ownership type? (December 19, 2018). 2019 Canadian Academic Accounting Association (CAAA) Annual Conference, Available at SSRN: https://ssrn.com/abstract=3304182 or http://dx.doi.org/10.2139/ssrn.3304182

Linda H. Chen (Contact Author)

University of Idaho ( email )

Department of Accounting
College of Business and Economics
Moscow, ID 83944-3174
United States

Leslie G. Eldenburg

University of Arizona ( email )

McClelland Hall Room 301H
Tucson, AZ 85721
United States
520-621-4585 (Phone)
520-621-3742 (Fax)

Theodore H. Goodman

Purdue University - Department of Accounting ( email )

Krannert School of Management
West Lafayette, IN 47907-1310
United States

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