The Effects of Hospital Ownership on Medical Productivity

Daniel Kessler, Mark McClellan

NBER Working Paper No. 8537
Issued in October 2001
NBER Program(s):   HC   PR

To develop new evidence on the effects of hospital ownership and other aspects of hospital market composition on health care productivity, we analyze longitudinal data on the medical expenditures and health outcomes of the vast majority of nonrural elderly Medicare beneficiaries hospitalized for new heart attacks over the 1985-1996 period. We find that the effects of ownership status are quantitatively important. Areas with a presence of for-profit hospitals have approximately 2.4 percent lower levels of hospital expenditures, but virtually the same patient health outcomes. We conclude that for-profit hospitals have important spillover benefits for medical productivity.

(229 K)

An NBER digest for this paper is available.

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Published: Kessler, Daniel P. and Mark B. McClellan. "The Effects Of Hospital Ownership On Medical Productivity," Rand Journal of Economics, 2002, v33(3,Autumn), 488-506.

This paper is available as PDF (229 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX