Hospital Ownership Conversions: Defining the Appropriate Public Oversight Role

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This paper reviews recent empirical evidence on the effects of hospital ownership conversions on quality of care and provision of public goods, such as uncompensated care, and presents new results on these topics based on hospital discharge data from the Healthcare Cost and Utilization Project’s (HCUP) Nationwide Inpatient Sample. My analysis of these data reveals that conversion from government or private nonprofit to for-profit ownership has no effect on in-hospital mortality, but rates of pneumonia complications increased following conversion to for-profit status. Other research, discussed in the paper, found increased mortality rates following discharge from the hospital for patients admitted to hospitals that had converted to for-profit ownership. There was no effect of such conversions on the propensity to admit uninsured or Medicaid patients. Clearly, there is considerable heterogeneity in outcomes attributable to conversions. Overall, the evidence suggests a role for public scrutiny of hospital ownership conversions.

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