Charity care: do not-for-profits influence for-profits?
Clement, Jan P;
White, Kenneth R;
Valdmanis, Vivian;
(2002)
Charity care: do not-for-profits influence for-profits?
Medical care research and review, 59 (1).
pp. 59-78.
ISSN 1077-5587
DOI: https://doi.org/10.1177/1077558702059001003
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This study further examines whether not-for-profit hospitals exert pressure on for-profit hospitals to provide charity care and whether for-profit hospitals react differently than not-for-profit hospitals to managed care pressures and hospital competition in providing charity care. A two equation model is estimated using 1996 data from California hospitals. The results indicate that in mixed ownership markets, for-profit hospitals provide significantly less charity care as not-for-profit hospitals in the market provide more. Unexpectedly, study for-profit hospitals were not more influenced by price competition than other hospitals with respect to charity care. Having a unique role in providing charity care may justify continuing tax exemption for not-for-profit hospitals and enhance interest in payment and other policies with regard to conversions to ensure that not-for-profit hospitals continue to be represented in market areas.