Altruism or moral hazard: The impact of hospital uncompensated care pools

Research output: Contribution to journalArticle

Abstract

Empirical evidence from New Jersey supports theories of hospital altruism. From 1987 to 1992, New Jersey reimbursed hospitals for uncompensated care through the Uncompensated Care Trust Fund. The Trust Fund reduced the shadow price of charity care, inducing hospitals to increase their provision of uncompensated care. Hospitals increased inpatient uncompensated care by an average of 14.8% and statewide uncompensated care increased by $360 million during 1987-1990. Empirical evidence suggests that the state effectively addressed the moral hazard problem created by the Trust Fund by auditing uncompensated care and regulating hospital collection procedures.

Original languageEnglish (US)
Pages (from-to)397-416
Number of pages20
JournalJournal of health economics
Volume16
Issue number4
DOIs
StatePublished - Aug 1997

Keywords

  • Altruism
  • Collection effort
  • Hospital subsidy
  • Moral hazard
  • Uncompensated care

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health

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