Does the profit motive make Jack nimble?
Subtitle: ownership form and the evolution of the U.S. hospital industry
By: Sujoy Chakravarty ... [et al.].
Contributors: Chakravarty, Sujoy.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11705; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11705.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Hospitals -- Economic aspects -- United States.; Hospitals, Proprietary -- United States.
Description: "We examine the evolving structure of the U.S.  hospital industry since 1970, focusing on how ownership form influences entry and exit behavior.  We develop theoretical predictions based on the model of Lakdawalla and Philipson, in which for-profit and not-for-profit hospitals differ regarding their objectives and costs of capital.  The model predicts for-profits would be quicker to enter and exit than not-for-profits in response to changing market conditions.  We test this hypothesis using data for all U.S.  hospitals from 1984 through 2000.  Examining annual and regional entry and exit rates, for-profit hospitals consistently have higher entry and exit rates than not-for-profits.  Econometric modeling of entry and exit rates yields similar patterns.  Estimates of an ordered probit model of entry indicate that entry is more responsive to demand changes for for-profit than not-for-profit hospitals.  Estimates of a discrete hazard model for exit similarly indicate that negative demand shifts increase the probability of exit more for for-profits than not-for-profits.  Finally, membership in a hospital chain significantly decreases the probability of exit for for-profits, but not not-for-profits"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 11/28/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.