Quarterly Journal of Economics Vol. 115 No. 4 2000
Hospital Ownership and Public Medical Spending
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. I find that the critical difference between the three types of hospitals is caused by 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 has not improved health outcomes for the indigent.
- DOI
- 10.1162/003355300555097
- Volume
- 115
- Issue
- 4
- Pages
- 1343-1373
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref