Peer Pressure: Hospital Ownership Mix and Medical Service Provision

Does medical service provision by nonprofit hospitals vary with the for-profit share of the market? The researchers examined approximately 40 medical services sorted into three profitability categories (relatively high, relatively low, variable) and addressed three related questions: (1) Do for-profit and nonprofit hospitals offer different kinds of services in markets with varying for-profit penetration; (2) Do shifts in for-profit market share change the propensity of nonprofit hospitals to offer profitable and unprofitable services; and (3) How does for-profit penetration relate to the overall percentage of hospitals providing different types of medical services? The objective of this project was to inform federal and state policymakers as they consider tax regulation and community benefit standards, as well as decision makers considering availability and access to services in conjunction with the negotiation of hospital conversion terms.