Working Paper: NBER ID: w11662
Authors: Yuchu Shen; Karen Eggleston; Joseph Lau; Christopher Schmid
Abstract: We apply meta-analytic methods to conduct a quantitative review of the empirical literature since 1990 comparing financial performance of US for-profit, not-for-profit, and government-owned general acute hospitals. We find that the diverse results in the hospital ownership literature can be explained largely by differences in authors' underlying theoretical frameworks, assumptions about the functional form of the dependent variables, and model specifications. Weaker methods and functional forms tend to predict larger differences in financial performance between not-for-profits and for-profits. The combined estimates across studies suggest little difference in cost among all three types of hospital ownership, and that for-profit hospitals generate more revenue and greater profits than not-for-profit hospitals, although the difference is only of modest economic significance. There is little difference in revenue or profits between government and not-for-profit hospitals.
Keywords: Hospital Ownership; Financial Performance; Metaanalysis
JEL Codes: I11; L30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| For-profit hospitals (L39) | More revenue (H27) |
| For-profit hospitals (L39) | Greater profits (D33) |
| Weaker controls and inappropriate functional forms (C20) | Larger differences in financial performance (L25) |
| Rigorous methodologies (type III) (C90) | Smaller ownership-related performance differences (L25) |
| Hospital ownership types (L39) | Financial performance (G32) |
| Hospital ownership types (L39) | Cost differences (H73) |