Does a Hospital’s Profit Status Affect its Operational Scope?

Does a Hospital’s Profit Status Affect its Operational Scope? We empirically evaluate whether a hospital’s organizational form (for-profit vs. not-for-profit or public) affects its operational scope (distribution of supplied medical procedures). Our results suggest that scope depends more on local demographics than causal forces from organizational form. This suggestion is consistent with differences in objectives (e.g., altruistic motives) ultimately exerting a stronger influence on operational scope than does the organizational advantage of not-for-profits in producing higher levels of non-contractible quality. It also offers information about how the availability of different medical services might change if the hospital sector continues its trend toward for-profit organization. Here, hospital conversions to for-profit status appear less likely to alter the mix of available services than do outright exits of not-for-profits. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Does a Hospital’s Profit Status Affect its Operational Scope?

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Publisher
Springer US
Copyright
Copyright © 2008 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-008-9185-9
Publisher site
See Article on Publisher Site

Abstract

We empirically evaluate whether a hospital’s organizational form (for-profit vs. not-for-profit or public) affects its operational scope (distribution of supplied medical procedures). Our results suggest that scope depends more on local demographics than causal forces from organizational form. This suggestion is consistent with differences in objectives (e.g., altruistic motives) ultimately exerting a stronger influence on operational scope than does the organizational advantage of not-for-profits in producing higher levels of non-contractible quality. It also offers information about how the availability of different medical services might change if the hospital sector continues its trend toward for-profit organization. Here, hospital conversions to for-profit status appear less likely to alter the mix of available services than do outright exits of not-for-profits.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 5, 2008

References

  • Instrumental variables and the search for identification: From supply and demand to natural experiments
    Angrist, J.; Krueger, A.

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