Hospital Market Structure and the Behavior of Not-For-Profit Hospitals

Mark Duggan

RAND Journal of Economics, 2002, vol. 33, issue 3, 433-446

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.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:rje:randje:v:33:y:2002:i:autumn:p:433-446

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