@techreport{NBERw17300,
 title = "Do Hospitals Cross Subsidize?",
 author = "Guy David and Richard Lindrooth and Lorens A. Helmchen and Lawton R. Burns",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "17300",
 year = "2011",
 month = "August",
 URL = "http://www.nber.org/papers/w17300",
 abstract = {Cross-subsidies are often considered the principal mechanism through which hospitals provide unprofitable care. Yet, hospitals’ reliance on and extent of cross-subsidization are difficult to establish. We exploit entry by cardiac specialty hospitals as an exogenous shock to incumbent hospitals’ profitability and in turn to their ability to cross-subsidize unprofitable services. Using patient-level data from general short-term hospitals in Arizona and Colorado before and after entry, we find that the hospitals most exposed to entry reduced their provision of services considered to be unprofitable (psychiatric, substance- abuse, and trauma care) and expanded their admissions for neurosurgery, a highly profitable service.},
}