Determinants of interest rates on tax-exempt hospital bonds.
The aim of this paper is to examine the determinants of interest rates on tax-exempt hospital bonds. The results highlight the potential and actual roles of Federal and state policy in the determination of these rates. The shift to a Prospective Payment System under Medicare has subsidized the borrowing costs of some hospitals at the expense of others. The selection of underwriters by negotiation rather than by competitive bidding results in higher interest rates. The Federal tax act of 1986 raised the cost of hospital debt by encouraging bond issues to contain call features.
City University of New York Graduate School.
M
M
Grossman
F
F
Goldman
S W
SW
Nesbitt
P
P
Mobilia
D002202:Capital Financing / Q000191:economics* / Q000706:statistics & numerical data; D003625:Data Collection; D005377:Financial Management, Hospital / Q000706:statistics & numerical data*; D007449:Investments / Q000191:economics* / Q000706:statistics & numerical data; D006278:Medicare / Q000191:economics; D011445:Prospective Payment System / Q000191:economics*; D011907:Rate Setting and Review / Q000379:methods / Q000706:statistics & numerical data; D012044:Regression Analysis; D013660:Taxes; D014481:United States