'Profit' variability in for-profit and not-for-profit hospitals.
This paper proposes two tests of the hypothesis that not-for-profit hospitals (NFPs) behave differently than for-profit hospitals. The profit variability test states that the profits of an NFP will be less variable over time than profits of a for-profit hospital if the NFP maximizes utility subject to a profit constraint. The second test examines whether NFP profits respond less to change in exogenous factors, such as Medicare reimbursement rates, than profits of for-profit hospitals. Both tests, performed on panel data from 1983 to 1988, support the hypothesis that NFPs behave differently than for-profit hospitals.
Hoerger
T J
TJ
Department of Economics and Business Administration, Vanderbilt University, Nashville, TN 37235.
D003361:Cost Allocation; D003659:Decision Making, Organizational; D005377:Financial Management, Hospital / Q000379:methods*; D006302:Health Services Research; D006777:Hospitals, Proprietary / Q000191:economics*; D006788:Hospitals, Voluntary / Q000191:economics*; D007182:Income / Q000706:statistics & numerical data*; D006278:Medicare; D017059:Models, Econometric; D010067:Ownership / Q000191:economics; D011445:Prospective Payment System; D014481:United States