The supply of charity services by nonprofit hospitals: motives and market structure.

R. G. Frank, D. S. Salkever

Research output: Contribution to journalArticlepeer-review

Abstract

This article studies provision of charity care by private, nonprofit hospitals. We demonstrate that in the absence of large positive income effects on charity care supply, convex preferences for the nonprofit hospital imply crowding out by other private or government hospitals. Extending our model to include impure altruism (rivalry) provides a possible explanation for the previously reported empirical result that both crowding out and income effects on indigent care supply are often weak or insignificant. Empirical analysis of data for hospitals in Maryland provides evidence of rivalry on the supply of charity care.

Original languageEnglish (US)
Pages (from-to)430-445
Number of pages16
JournalThe Rand journal of economics
Volume22
Issue number3
DOIs
StatePublished - 1991

ASJC Scopus subject areas

  • Economics and Econometrics

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