IDEAS home Printed from https://ideas.repec.org/a/taf/rjelxx/v15y2007i3p353-382.html
   My bibliography  Save this article

Healthcare Real Estate: Excess Capacity and Growing Costs

Author

Listed:
  • Michael Anikeeff
  • John Benjamin
  • Peter Chinloy
  • Isaac Megbolugbe

Abstract

An apparent paradox is the coexistence of excess demand by patients for medical services and excess supply by hospital and nursing home providers. The vacancy rate of licensed hospital and nursing home beds has been rising even as the total number of beds and hospitals has been declining as rates are regulated. This paper examines alternative explanations for this paradox. One explanation is that since providers receive similar rates from public and private insurers and other third-party payers regardless of quality, the healthcare sector effectively operates as a price-regulated industry. There is an incentive to carry excess capacity. A second is that the separation of capital and operating budgets leads to added construction even if unnecessary or redundant. A third explanation is that excess capacity is a convenience with an option value that allows patients and providers to have staff and hospital beds available at any time and location.

Suggested Citation

  • Michael Anikeeff & John Benjamin & Peter Chinloy & Isaac Megbolugbe, 2007. "Healthcare Real Estate: Excess Capacity and Growing Costs," Journal of Real Estate Literature, Taylor & Francis Journals, vol. 15(3), pages 353-382, January.
    • Handle: RePEc:taf:rjelxx:v:15:y:2007:i:3:p:353-382
    DOI: 10.1080/10835547.2007.12090211
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10835547.2007.12090211
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10835547.2007.12090211?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rjelxx:v:15:y:2007:i:3:p:353-382. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rjel20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.