 Better together: Coexistence of for-profit and nonprofit firms with an application to the U.S. hospice industryChristina Marsh Dalton and W. David Bradford Journal of Health Economics, 2019, vol. 63, issue C, 1-18 Abstract: Many markets maintain a nontrivial mix of both nonprofit and for-profit firms, particularly in health care industries such as hospice, nursing homes, and home health. What are the effects of coexistence vs. dominance of one ownership type? We show how the presence of both ownership types can lead to greater diversity in consumer types served, even if both firms merely profit-maximize. This is the case where firms serve consumers for multiple consumption durations, but where donations are part of a nonprofit firm objective function and happen after services have been provided. This finding is strengthened if the good or service has value beyond immediate consumption or the direct consumer. We show these predictions empirically in the hospice industry, using data containing over 90 percent of freestanding U.S. hospices, 2000–2008. Nonprofit and for-profit providers split the patient market according to length of stay, leading to a wider range of patients being served than in the absence of this coexistence. Keywords: L3; L2; I1; Nonprofit firm behavior; For-profit nonprofit competition; Hospice (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:63:y:2019:i:c:p:1-18 DOI: 10.1016/j.jhealeco.2018.10.001 Access Statistics for this article Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire More articles in Journal of Health Economics from Elsevier |
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