Hospitals as Insurers of Last Resort†

Hospitals as Insurers of Last Resort† AbstractAmerican hospitals are required to provide emergency medical care to the uninsured. We use previously confidential hospital financial data to study the resulting uncompensated care, medical care for which no payment is received. Using both panel-data methods and case studies, we find that each additional uninsured person costs hospitals approximately $800 each year. Increases in the uninsured population also lower hospital profit margins, suggesting that hospitals do not pass along all uncompensated-care costs to other parties such as hospital employees or privately insured patients. A hospital's uncompensated-care costs also increase when a neighboring hospital closes. (JEL G22, I11, I13, L25) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Applied Economics American Economic Association
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Publisher
American Economic Association
Copyright
Copyright © 2018 © American Economic Association
ISSN
1945-7790
D.O.I.
10.1257/app.20150581
Publisher site
See Article on Publisher Site

Abstract

AbstractAmerican hospitals are required to provide emergency medical care to the uninsured. We use previously confidential hospital financial data to study the resulting uncompensated care, medical care for which no payment is received. Using both panel-data methods and case studies, we find that each additional uninsured person costs hospitals approximately $800 each year. Increases in the uninsured population also lower hospital profit margins, suggesting that hospitals do not pass along all uncompensated-care costs to other parties such as hospital employees or privately insured patients. A hospital's uncompensated-care costs also increase when a neighboring hospital closes. (JEL G22, I11, I13, L25)

Journal

American Economic Journal: Applied EconomicsAmerican Economic Association

Published: Jan 1, 2018

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