Hospital Ownership and Public Medical Spending

41 Pages Posted: 19 Jul 2000 Last revised: 15 Oct 2022

See all articles by Mark Duggan

Mark Duggan

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: July 2000

Abstract

The hospital market is served by firms that are private for-profit, private not-for-profit, and government-owned and operated. I use a plausibly exogenous change in hospital financing that was intended to improve medical care for the poor to test three theories of organizational behavior. My results reveal that the critical difference between the three types of hospitals owes to the soft budget constraint of government-owned institutions. The decision-makers in private not-for-profit hospitals are just as responsive to financial incentives and are no more altruistic than their counterparts in profit-maximizing facilities. My final set of results suggests that the significant increase in public medical spending examined in this paper did not improve health outcomes for the indigent.

Suggested Citation

Duggan, Mark G., Hospital Ownership and Public Medical Spending (July 2000). NBER Working Paper No. w7789, Available at SSRN: https://ssrn.com/abstract=236656

Mark G. Duggan (Contact Author)

University of Maryland - Department of Economics ( email )

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College Park, MD 20742
United States

National Bureau of Economic Research (NBER)

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United States

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