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Determinants of Market Share of For-Profit Hospitals: An Empirical Examination

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  • Seungchul Lee

    (Samsung Economic Research Institute, Seoul 137-955, Korea)

  • Chune Young Chung

    (School of Business Administration, College of Business and Economics, Chung-Ang University, Seoul 156-756, Korea)

  • Hong Kee Sul

    (Wharton Research Data Service, The Wharton School, University of Pennsylvania, Philadelphia, PA 19104, USA)

  • Yunjae Lee

    (Graduate School of Business Administration, Chung-Ang University, Seoul 156-756, Korea)

Abstract

This study estimates the effects of a prospective payment system on the growth of for-profit hospitals. The empirical results show that the proportion of patient care paid for by Medicare managed care has a positive, statistically significant relationship with the market share of for-profit hospitals. Medicare managed care reimburses health care providers prospectively, and a larger portion of prospective reimbursements is received by for-profit hospitals, whose market share consequently increases. In addition, the proportion of patients with Medi-Cal and third party managed care has a positive, statistically significant relationship with the market share of for-profit hospitals.

Suggested Citation

  • Seungchul Lee & Chune Young Chung & Hong Kee Sul & Yunjae Lee, 2017. "Determinants of Market Share of For-Profit Hospitals: An Empirical Examination," Social Sciences, MDPI, vol. 6(4), pages 1-12, October.
    • Handle: RePEc:gam:jscscx:v:6:y:2017:i:4:p:119-:d:114028
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    References listed on IDEAS

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    1. Seungchul Lee & Robert Rosenman, 2013. "Reimbursement and Investment: Prospective Payment and For-Profit Hospitals’ Market Share," Journal of Industry, Competition and Trade, Springer, vol. 13(4), pages 503-518, December.
    2. Herr Annika, 2011. "Quality and Welfare in a Mixed Duopoly with Regulated Prices: The Case of a Public and a Private Hospital," German Economic Review, De Gruyter, vol. 12(4), pages 422-437, December.
    3. Lakdawalla, Darius & Philipson, Tomas, 2006. "The nonprofit sector and industry performance," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1681-1698, September.
    4. Jinhyung Lee, 2015. "Network Effects of Health Information Technology: Evidence from California Hospitals," Korean Economic Review, Korean Economic Association, vol. 31, pages 359-381.
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