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  • Title: Are for-profit hospital conversions harmful to patients and to Medicare?
    Author: Picone G, Chou SY, Sloan F.
    Journal: Rand J Econ; 2002; 33(3):507-23. PubMed ID: 12585305.
    Abstract:
    We examine how changes in hospital ownership to and from for-profit status affect quality and Medicare payments per hospital stay. We hypothesize that hospitals converting to for-profit ownership boost post acquisition profitability by reducing dimensions of quality not readily observed by patients and by raising prices. We find that 1-2 years after conversion to for-profit status, mortality of patients, which is difficult for outsiders to monitor, increases while hospital profitability rises markedly and staffing decreases. Thereafter, the decline in quality is much lower. A similar decline in quality is not observed after hospitals switch from for-profit to government or private nonprofit status.
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