Market Forces and the Public Good: Competition Among Hospitals and Provision of Indigent Care

40 Pages Posted: 3 Jul 2007 Last revised: 29 Jul 2010

See all articles by Richard G. Frank

Richard G. Frank

Harvard Medical School; National Bureau of Economic Research (NBER)

David S. Salkever

UMBC, Department of Public Policy

Jean Mitchell

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: October 1989

Abstract

The research presented here focuses on the impact of competitive forces on the provision of social or merit goods by non-profit hospitals. We specifically examine the behavior of altruistic non-profit hospitals in the supply of charity care. The effects of competitive pressures and past charity care provision on the supply of philanthropic donations to nonprofit hospitals are also examined. Empirical models of the supply of donations and charity care are specified and estimated using data on nonprofit hospitals in Florida for the years 1980-1984. The coefficient estimates imply strong income effects in the charity care supply equations. This raises the possibility that competitive pressures and limits on hospital payments, under public insurance programs, may reduce the supply of indigent care. The results from the supply of donations models suggest that philanthropic donations will alleviate the competitive pressures to a small degree.

Suggested Citation

Frank, Richard G. and Salkever, David S. and Mitchell, Jean, Market Forces and the Public Good: Competition Among Hospitals and Provision of Indigent Care (October 1989). NBER Working Paper No. w3136. Available at SSRN: https://ssrn.com/abstract=467579

Richard G. Frank (Contact Author)

Harvard Medical School ( email )

Department of Health Care Policy
Boston, MA 02115
United States
617-432-0178 (Phone)
617-432-1219 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David S. Salkever

UMBC, Department of Public Policy ( email )

1000 Hilltop Circle
Baltimore, MD 21250

Jean Mitchell

affiliation not provided to SSRN

No Address Available

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