Browsing by Author "Chou, Shin-yi"
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Item Open Access Are for-profit hospital conversions harmful to patients and to Medicare?(Rand J Econ, 2002) Picone, Gabriel; Chou, Shin-yi; Sloan, FrankWe 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.