Health Care Management Papers

Document Type

Journal Article

Date of this Version

11-2000

Publication Source

The Quarterly Journal of Economics

Volume

115

Issue

4

Start Page

1343

Last Page

1373

DOI

10.1162/003355300555097

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.

Copyright/Permission Statement

This is a pre-copyedited, author-produced PDF of an article accepted for publication in The Quarterly Journal of Economics following peer review. The version of record - Duggan, M. (2000). Hospital ownership and public medical spending (No. w7789). National bureau of economic research is available online at http://repository.upenn.edu/

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Date Posted: 27 November 2017

This document has been peer reviewed.