The effect of competitive pressure on charity: hospital responses to price shopping in California.
Since higher charges to private patients are a major source of financing for hospital care to the uninsured, increased price shopping by private payers may mean that hospitals are less able to provide such care. I study the effect of increased price shopping on California hospital markets over the 1984-1988 period. I find that there was a large fall in net private revenues and net income in the least concentrated hospital markets in the state after the advent of price shopping. Perhaps as a result, care to the uninsured fell dramatically in these markets as well, relative to more concentrated markets.
Gruber
J
J
Department of Economics, MIT, Cambridge, MA 021139.
D002140:California; D002608:Charities / Q000191:economics*; D003256:Community Participation / Q000191:economics*; D004465:Economic Competition; D004469:Economics, Hospital / Q000706:statistics & numerical data*; D006279:Health Maintenance Organizations / Q000191:economics; D017722:Hospital Charges; D007349:Insurance, Health, Reimbursement / Q000191:economics; D018803:Models, Economic; D011243:Preferred Provider Organizations / Q000191:economics; D017664:Uncompensated Care / Q000191:economics* / Q000706:statistics & numerical data; D014481:United States