Hospital Conversions to For-Profit Status: Implications for Charges, Patients, and Communities
Date
2007
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Haverford College. Department of Economics
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Thesis
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The Holland Hunter 1943 Economics Department Thesis Prize
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eng
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Haverford users only
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Abstract
This paper investigates the effects of hospital conversions from public or non-profit to for-profit status on various hospital level behavioral outcomes. Public and non-profit hospitals have generally been considered successful in reconciling profitability with moral obligations to patients and communities. There is concern with what happens to these moral objectives when profit maximization becomes the priority of the hospital. Using a nationally representative sample of hospital discharge records from the Healthcare Cost and Utilization Project (HCUP) Nationwide Inpatient Sample (NIS) over a 17 year time frame (1988-2004), I test for the effects of conversion on three separate outcomes of interest: total per patient charges, quality of care, and provision of community benefits. I find that converted for-profit hospitals on average charge their patients, especially Medicaid patients, more than do non converted hospitals. I do not find that hospitals decrease their level of commitment to community benefits as a result of conversion. I also find no significant relationship between decreased quality of care of a hospital and conversion to for-profit status.