Working Paper: NBER ID: w15798
Authors: Douglas Almond; Janet Currie; Emilia Simeonova
Abstract: This paper explores the consequences of the expiration of charity care requirements imposed on private hospitals by the Hill-Burton Act. We examine delivery care and the health of newborns using the universe of Florida births from 1989-2003 combined with hospital data from the American Hospital Association. We find that charity care requirements were binding on hospitals, but that private hospitals under obligation "cream skimmed" the least risky maternity patients. Conditional on patient characteristics, they provided less intensive maternity services but without compromising patient health. When obligations expired, private hospitals quickly reduced their charity caseloads, shifting maternity patients to public hospitals. There they received more intensive services, but did not experience improvements in health. These results suggest that public hospitals provided services less efficiently than private hospitals constrained to provide charity care.
Keywords: charity care; hospital obligations; health outcomes; maternity services
JEL Codes: I11; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Expiration of Hill-Burton obligations (I19) | private hospitals cream skimmed the least risky maternity patients (I10) |
| Expiration of Hill-Burton obligations (I19) | reduction in charity care caseloads (I39) |
| reduction in charity care caseloads (I39) | shift of maternity patients to public hospitals (J18) |
| Public hospitals (H49) | provided more intensive services (I39) |
| Public hospitals (H49) | no measurable improvements in patient health outcomes (I14) |
| Tax subsidies for nonprofit hospitals (H20) | insufficient to maintain previous levels of charity care (D64) |
| insufficient tax subsidies (H29) | decrease in maternity care provision (J13) |
| decrease in maternity care provision (J13) | shift towards public hospitals (H49) |
| Private hospitals (I11) | adapted quickly to financial incentives (G40) |
| Need for appropriate incentives (O31) | controlling healthcare costs (H51) |
| Private hospitals avoiding high-risk charity patients (I11) | necessity of a public safety net (H53) |