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Hospital Ownership Mix Efficiency in the Us: An Exploratory Study

26 Pages Posted: 18 Apr 2005 Last revised: 2 Aug 2010

Rexford E. Santerre

University of Connecticut - Department of Finance

John A. Vernon

University of North Carolina (UNC) at Chapel Hill; National Bureau of Economic Research (NBER)

Date Written: March 2005

Abstract

This paper offers an empirical test of ownership mix efficiency in the U.S. hospital services industry. The test compares the benefits of quality assurance with the costs from the attenuation of property rights that result from an increased presence of nonprofit organizations. The empirical results suggest that too many not-for-profit and public hospitals may exist in the typical market area of the U.S. The policy implication is that more quality of care per dollar might be obtained by attracting a greater percentage of for-profit hospitals into some market areas. This conclusion, however, is tempered with several caveats. We discuss these and also make recommendations for further research.

Suggested Citation

Santerre, Rexford E. and Vernon, John A., Hospital Ownership Mix Efficiency in the Us: An Exploratory Study (March 2005). NBER Working Paper No. w11192. Available at SSRN: https://ssrn.com/abstract=684718

Rexford E. Santerre

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States

John A. Vernon (Contact Author)

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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