To describe the contributions of nonprofit hospitals and health plans to healthcare markets and to analyze state policy options with regard to the conversion of nonprofits to for-profit status. Study Design Policy analysis. The main social rationale for for-profits is their incentive for better efficiency. Nonprofit hospitals do provide more uncompensated care than for-profit hospitals.
States have substantial power and discretion in overseeing nonprofit conversions.
Some have regularized oversight through new legislation that constrains, but does not eliminate, state officials' discretion. These statutes may be deferential to converting entities and their buyers or may be very restrictive of them. Conclusions Overseeing the appropriate disposition of nonprofit assets in individual conversions is extremely important. Local market conditions are likely more important in determining hospital behavior than ownership form. If nonprofits disappear, the states may need to maintain quality and access norms through regulation.