Behavioural differences among hospitals: Is it ownership, or location?


Journal Article

By about 1988, the consensus among leading health economists was that no meaningful differences existed among hospitals of different ownership form, and this position was embraced by the Antitrust Division of the US Department of Justice. But behavioural differences among hospitals of different ownership has continued to be a matter of both academic and judicial interest. Recent empirical studies have concluded that real differences do exist, while many earlier studies reached the opposite conclusion. This contradiction in findings over time, as competition intensified, is exactly opposite to what expense-preference theory would predict. We examine this apparent paradox, using a very general test of behavioural differences by hospital ownership. We find that the omission of location-specific variables can lead to biased estimates of ownership effects, and that no significant behavioural differences exist among private California hospitals in 1986-90, when this source of ownership endogeneity is eliminated.

Full Text

Duke Authors

Cited Authors

  • Mobley, LR; Bradford, WD

Published Date

  • January 1, 1997

Published In

Volume / Issue

  • 29 / 9

Start / End Page

  • 1125 - 1138

International Standard Serial Number (ISSN)

  • 0003-6846

Digital Object Identifier (DOI)

  • 10.1080/00036849700000003

Citation Source

  • Scopus