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Indigent Care As Quid Pro Quo In Hospital Regulation

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  • Gary M. Fournier
  • Ellen S. Campbell

Abstract

Hospitals expend considerable resources each year to provide health care to the poor. Why do some hospitals voluntarily take on a disproportionate burden of this care? Our view is that the burdened hospitals are not simply altruistic. They are indirectly compensated for this expense with legal protections against competition under certificate-ofneed (CON) regulation. We test this hypothesis in a recursive model, explaining which hospitals are likely to win CON approval. The results indicate that, controlling for the endogeneity of indigent care, regulators in Florida systematically awarded licenses to hospitals providing greater amounts of care to the poor. © 1997 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Gary M. Fournier & Ellen S. Campbell, 1997. "Indigent Care As Quid Pro Quo In Hospital Regulation," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 669-673, November.
    • Handle: RePEc:tpr:restat:v:79:y:1997:i:4:p:669-673
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    Cited by:

    1. Núria Mas, 2013. "Responding to financial pressures. The effect of managed care on hospitals’ provision of charity care," International Journal of Health Economics and Management, Springer, vol. 13(2), pages 95-114, June.
    2. Mas, Nuria, 2009. "Responding to financial pressures. The effect of managed care on hospitals' provision of charity care," IESE Research Papers D/782, IESE Business School.
    3. David, Guy & Lindrooth, Richard C. & Helmchen, Lorens A. & Burns, Lawton R., 2014. "Do hospitals cross-subsidize?," Journal of Health Economics, Elsevier, vol. 37(C), pages 198-218.
    4. Jennifer L. Troyer, 2002. "Cross‐Subsidization in Nursing Homes: Explaining Rate Differentials Among Payer Types," Southern Economic Journal, John Wiley & Sons, vol. 68(4), pages 750-773, April.
    5. Guy David, 2009. "The convergence between for-profit and nonprofit hospitals in the United States," International Journal of Health Economics and Management, Springer, vol. 9(4), pages 403-428, December.

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