Hospital Ownership and Financial Performance: What Explains the Different Findings in the Empirical Literature?

• Main Authors: Yu-Chu Shen (Author), Karen Eggleston (Author), Joseph Lau (Author), Christopher H. Schmid (Author)
• Format: Book
• Published: SAGE Publishing, 2007-02-01T00:00:00Z.
• Subjects: article
• Online Access: Connect to this object online.
• Notes: 0046-9580; 10.5034/inquiryjrnl_44.1.41
• Keywords: Public aspects of medicine; RA1-1270
• Source: Inquiry: The Journal of Health Care Organization, Provision, and Financing, Vol 44 (2007)

This study applies meta-analytic methods to conduct a quantitative review of the empirical literature on hospital ownership since 1990. We examine four financial outcomes across 40 studies: cost, revenue, profit margin, and efficiency. We find that variation in the magnitudes of ownership effects can be explained by a study's research focus and methodology. Studies using empirical methods that control for few confounding factors tend to find larger differences between for-profit and not-for-profit hospitals than studies that control for a wider range of confounding factors. Functional form and sample size also matter. Failure to apply log transformation to highly skewed expenditure data yields misleadingly large estimated differences between for-profits and not-for-profits. Studies with fewer than 200 observations also produce larger point estimates and wide confidence intervals.