Health Care Management Papers

Document Type

Journal Article

Date of this Version

2002

Publication Source

The RAND Journal of Economics

Volume

33

Issue

3

Start Page

433

Last Page

446

DOI

10.3386/w7966

Abstract

I exploit a change in hospital financial incentives to examine whether the behavior of private not-for-profit hospitals is systematically related to the share of nearby hospitals organized as for-profit firms. My findings demonstrate that not-for-profit hospitals in for-profit intensive areas are significantly more responsive to the change than their counterparts in areas served by few for-profit providers. Differences in financial constraints and other observable factors correlated with for-profit hospital penetration do not explain the heterogeneous response. The findings suggest that not-for-profit hospitals mimic the behavior of private for-profit providers when they actively compete with them.

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Date Posted: 27 November 2017

This document has been peer reviewed.