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Radhika Ramakrishna (Northwestern): Hospital Ownership and Quality of Care

Abstract: Differences between nonprofit and for-profit hospitals within the private US hospital market have been a matter of longstanding theoretical and empirical interest in economics and are the subject of much policy debate. Despite this, few prior works take a causal approach to examining the difference in quality of care between these hospital types. I apply an instrumental variables strategy based on ambulance preferences for individual hopitals (Doyle et al. 2015) to mitigate patient selection into hospital types and produce causal estimates. I find that for-profit hospitals offer slightly worse care (10% higher readmissions) at higher cost (6.7%). These effects are not attenuated over time. Higher costs are driven by higher treatment intensity in the form of more frequent inpatient admissions and longer stays.