Working Paper: NBER ID: w8537
Authors: Daniel Kessler; Mark McClellan
Abstract: To develop new evidence on the effects of hospital ownership and other aspects of hospital market composition on health care productivity, we analyze longitudinal data on the medical expenditures and health outcomes of the vast majority of nonrural elderly Medicare beneficiaries hospitalized for new heart attacks over the 1985-1996 period. We find that the effects of ownership status are quantitatively important. Areas with a presence of for-profit hospitals have approximately 2.4 percent lower levels of hospital expenditures, but virtually the same patient health outcomes. We conclude that for-profit hospitals have important spillover benefits for medical productivity.
Keywords: hospital ownership; medical productivity; health outcomes; for-profit hospitals; non-profit hospitals
JEL Codes: I1; L3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| for-profit hospitals (L39) | lower levels of hospital expenditures (H51) |
| for-profit hospitals (L39) | virtually the same patient health outcomes (I10) |
| hospital ownership type (L32) | medical expenditures (H51) |
| hospital ownership type (L32) | health outcomes (I14) |
| for-profit hospitals (L39) | improved medical productivity (I15) |