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Hospital competition, spillovers and provision of uncompensated care
Journal article   Peer reviewed

Hospital competition, spillovers and provision of uncompensated care

Luciana D. Costa and Teresa D. Harrison
Applied economics, v 51(31), pp 3401-3412
03 Jul 2019

Abstract

Business & Economics Economics Social Sciences
Using data for California from 2005 until 2010, we investigate to what extent market competition and the presence of non-profits in the area may play a role in equilibrium uncompensated care (UC) levels, allowing those effects to differ according to the hospital's ownership type. Previous studies have not explored the potential spillover effects from non-profit hospitals into the hospital decision of UC provision. We find evidence that regions with more non-profits experienced larger increases in UC levels, and even more in less concentrated markets. Our results also indicate that UC provision by for-profit hospitals decreases the larger the presence of non-profits in the region, and this effect is magnified when competition is more intense. We, therefore, find no positive spillover effects of non-profits into the hospital decision of UC provision, which may help us to understand the recent trends in UC levels.

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Web of Science research areas
Economics
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