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The Corporatization of Independent Hospitals

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Listed:
  • Elena Andreyeva
  • Atul Gupta
  • Catherine Ishitani
  • Malgorzata Sylwestrzak
  • Benjamin Ukert

Abstract

Little is known about how system ownership affects hospital operations, though they control 80% of hospital beds. We combine multiple data sources, including novel price data from a large commercial insurer, to study over 100 independent hospitals that enter system ownership. The targets obtain differentially higher prices, relative to a matched comparison group, but far greater cost reductions, primarily through reducing labor and financing costs. In contrast, we do not detect operating-cost reductions at 135 system-owned hospitals acquired by other systems, suggesting that these savings are mostly realized on the initial transition to system ownership.

Suggested Citation

  • Elena Andreyeva & Atul Gupta & Catherine Ishitani & Malgorzata Sylwestrzak & Benjamin Ukert, 2024. "The Corporatization of Independent Hospitals," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 2(3), pages 602-663.
    • Handle: RePEc:ucp:jpemic:doi:10.1086/730454
    DOI: 10.1086/730454
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