Exit from the Hospital Industry

Posted: 31 Mar 2007

See all articles by Federico Ciliberto

Federico Ciliberto

University of Virginia - Department of Economics; Centre for Economic Policy Research (CEPR)

Richard C. Lindrooth

Medical University of South Carolina

Abstract

We study the exit of hospitals from the market for inpatient services. More generous hospital reimbursement significantly reduces the probability of exit throughout the 1990s. Conditional on reimbursement levels, hospital efficiency was not a significant determinant in the early 1990s but in the mid- to late 1990s, less efficient hospitals were significantly more likely to exit. Throughout the period, high-tech services increased the probability of survival, and for-profit hospitals were more likely to exit. The role of Medicare as a determinant of exit became less important in the latter half of the 1990s.

JEL Classification: I11, L11

Suggested Citation

Ciliberto, Federico and Lindrooth, Richard C., Exit from the Hospital Industry. Economic Inquiry, Vol. 45, No. 1, pp. 71-81, 2007, Available at SSRN: https://ssrn.com/abstract=976070

Federico Ciliberto (Contact Author)

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Richard C. Lindrooth

Medical University of South Carolina ( email )

19 Hagood Ave., Suite 401
Charleston, SC 29425
United States

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