IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/65292.html
   My bibliography  Save this paper

Ownership and exit behavior: evidence from the home health care market

Author

Listed:
  • Orsini, Chiara

Abstract

In the US health care system a high fraction of suppliers are not-for-profit companies. Some argue that non-profits are “for-profits in disguise” and I test this proposition in a quasi-experimental way by examining the exit behavior of home health care firms after a legislative change considerably reduced reimbursed visits per patient. The change allows me to construct a cross provider measure of restriction in reimbursement and to use this measure and time-series variation due to the passage of the law in my estimates. I find that exits among for-profit firms are higher than those of not-for-profit firms, rejecting the null that these sectors responded to the legislation in similar ways. In addition, my results expand the view that “not-for-profit” firms are a form of “trapped capital.” There is little capital investment in the home health care market, so the higher exit rates of for-profit firms after the law change indicate the possible role of labor inputs in generating differences in exit behavior across sectors.

Suggested Citation

  • Orsini, Chiara, 2016. "Ownership and exit behavior: evidence from the home health care market," LSE Research Online Documents on Economics 65292, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:65292
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/65292/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Glaeser, Edward L. & Shleifer, Andrei, 2001. "Not-for-profit entrepreneurs," Journal of Public Economics, Elsevier, vol. 81(1), pages 99-115, July.
    2. Sujoy Chakravarty & Martin Gaynor & Steven Klepper & William B. Vogt, 2006. "Does the profit motive make Jack nimble? Ownership form and the evolution of the US hospital industry," Health Economics, John Wiley & Sons, Ltd., vol. 15(4), pages 345-361, April.
    3. Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2003. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," Econometrica, Econometric Society, vol. 71(4), pages 1161-1189, July.
    4. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    5. Henry Hansmann & Daniel Kessler & Mark B. McClellan, 2003. "Ownership Form and Trapped Capital in the Hospital Industry," NBER Chapters, in: The Governance of Not-for-Profit Organizations, pages 45-70, National Bureau of Economic Research, Inc.
    6. Ham, John C & Rea, Samuel A, Jr, 1987. "Unemployment Insurance and Male Unemployment Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 5(3), pages 325-353, July.
    7. Mark C. Berger & Dan A. Black, 1998. "The Duration Of Medicaid Spells: An Analysis Using Flow And Stock Samples," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 667-675, November.
    8. Ettner, Susan L, 1994. "The Effect of the Medicaid Home Care Benefit on Long-Term Care Choices of the Elderly," Economic Inquiry, Western Economic Association International, vol. 32(1), pages 103-127, January.
    9. Orsini, Chiara, 2010. "Changing the way the elderly live: Evidence from the home health care market in the United States," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 142-152, February.
    10. Chatterji, Pinka & Meara, Ellen, 2010. "Consequences of eliminating federal disability benefits for substance abusers," Journal of Health Economics, Elsevier, vol. 29(2), pages 226-240, March.
    11. Edward L. Glaeser, 2003. "The Governance of Not-for-Profit Organizations," NBER Books, National Bureau of Economic Research, Inc, number glae03-1.
    12. Harrison Teresa D. & Laincz Christopher A, 2008. "Entry and Exit in the Nonprofit Sector," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Albert H. Choi, 2015. "Non-Profit Status and Relational Sanctions: Commitment to Quality through Repeat Interactions and Organizational Choice," Journal of Law and Economics, University of Chicago Press, vol. 58(4).
    2. Christoph Schwierz, 2009. "Expansion in Markets with Decreasing Demand – For-Profits in the German Hospital Industry," Ruhr Economic Papers 0106, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    3. Jill R. Horwitz & Austin Nichols, 2007. "What Do Nonprofits Maximize? Nonprofit Hospital Service Provision and Market Ownership Mix," NBER Working Papers 13246, National Bureau of Economic Research, Inc.
    4. repec:zbw:rwirep:0106 is not listed on IDEAS
    5. Christoph Schwierz, 2011. "Expansion in markets with decreasing demand‐for‐profits in the German hospital industry," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 675-687, June.
    6. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 499-637, Elsevier.
    7. 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.
    8. Horwitz, Jill R. & Nichols, Austin, 2009. "Hospital ownership and medical services: Market mix, spillover effects, and nonprofit objectives," Journal of Health Economics, Elsevier, vol. 28(5), pages 924-937, September.
    9. Rajeev Dehejia, 2013. "The Porous Dialectic: Experimental and Non-Experimental Methods in Development Economics," WIDER Working Paper Series wp-2013-011, World Institute for Development Economic Research (UNU-WIDER).
    10. Hollingsworth, Bruce & Ohinata, Asako & Picchio, Matteo & Walker, Ian, 2017. "Labour supply and informal care supply: The impacts of financial support for long-term elderly care," GLO Discussion Paper Series 118, Global Labor Organization (GLO).
    11. Bakx, Pieter & Wouterse, Bram & van Doorslaer, Eddy & Wong, Albert, 2020. "Better off at home? Effects of nursing home eligibility on costs, hospitalizations and survival," Journal of Health Economics, Elsevier, vol. 73(C).
    12. Aysit Tansel & H. Mehmet Taşçı, 2010. "Hazard Analysis of Unemployment Duration by Gender in a Developing Country: The Case of Turkey," LABOUR, CEIS, vol. 24(4), pages 501-530, December.
    13. Jain, Apoorva & Peter, Klara Sabirianova, 2017. "Limits to Wage Growth: Understanding the Wage Divergence between Immigrants and Natives," IZA Discussion Papers 10891, Institute of Labor Economics (IZA).
    14. Annette Schminke & Johannes Van Biesebroeck, 2013. "Using export market performance to evaluate regional preferential policies in China," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 343-367, June.
    15. Hao Dong & Daniel L. Millimet, 2020. "Propensity Score Weighting with Mismeasured Covariates: An Application to Two Financial Literacy Interventions," JRFM, MDPI, vol. 13(11), pages 1-24, November.
    16. Villalobos Barría, Carlos & Klasen, Stephan, 2016. "The impact of SENAI's vocational training program on employment, wages, and mobility in Brazil: Lessons for Sub Saharan Africa?," The Quarterly Review of Economics and Finance, Elsevier, vol. 62(C), pages 74-96.
    17. Yingying Dong & Arthur Lewbel, 2015. "A Simple Estimator for Binary Choice Models with Endogenous Regressors," Econometric Reviews, Taylor & Francis Journals, vol. 34(1-2), pages 82-105, February.
    18. Jinglong Zhao, 2024. "Experimental Design For Causal Inference Through An Optimization Lens," Papers 2408.09607, arXiv.org, revised Aug 2024.
    19. Juan Serrato & Philippe Wingender, 2016. "Estimating Local Fiscal Multipliers," Working Papers id:11109, eSocialSciences.
    20. Parrilli, Mario Davide & Balavac, Merima & Radicic, Dragana, 2020. "Business innovation modes and their impact on innovation outputs: Regional variations and the nature of innovation across EU regions," Research Policy, Elsevier, vol. 49(8).
    21. Tymon Sloczynski & S. Derya Uysal & Jeffrey M. Wooldridge & Derya Uysal, 2022. "Abadie's Kappa and Weighting Estimators of the Local Average Treatment Effect," CESifo Working Paper Series 9715, CESifo.

    More about this item

    Keywords

    long-term care; government restriction in financing; not-for-profit;
    All these keywords.

    JEL classification:

    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ehl:lserod:65292. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    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.