Modeling Internal Decision Making Process: An Explanation of Conflicting Empirical Results on Behavior of Nonprofit and For-Profit Hospitals

Kathleen Carroll () and Jane Ruseski

No 2009-23, Working Papers from University of Alberta, Department of Economics

Abstract: This paper develops multiobjective models of hospital decision making that incorporate the internal decision process in both a for-profit and a nonprofit hospital. Predicted output and quality for a nonprofit hospital differ from those for a for-profit hospital under some conditions but converge under others. Convergence may be the result of a complex internal decision structure with decision control primarily by physicians; similar objectives across different organizational forms; or differing constraints. The mechanisms underlying these outcomes provide explanations for conflicting result in empirical studies of nonprofit and for-profit hospitals and provide a different rationale for convergence than nonprofit response to competition from for-profit hospitals. Understanding the source of convergence is important for policies directed toward the tax treatment of nonproift hospitals.

Keywords: hospital behavior; hospital ownership; internal decision making; physician-hospital relations (search for similar items in EconPapers)
JEL-codes: D21 D23 I11 L21 L30 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2009-07-01
New Economics Papers: this item is included in nep-hea
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Citations: View citations in EconPapers (1)

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https://sites.ualberta.ca/~econwps/2009/wp2009-23.pdf Full text (application/pdf)

Related works:
Journal Article: MODELING INTERNAL DECISION MAKING PROCESS: AN EXPLANATION OF CONFLICTING EMPIRICAL RESULTS ON BEHAVIOR OF NON‐PROFIT AND FOR‐PROFIT HOSPITALS (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2009_023

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