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Medical Care Research and Review
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Charity Care: Do Not-for-Profits Influence for-Profits?

Jan P. Clement

Virginia Commonwealth University

Kenneth R. White

Virginia Commonwealth University

Vivian Valdmanis

London School of Hygiene and Tropical Medicine

This study further examines whether not-for-profit hospitals exert pressure on for-profit hospitals to provide charity care and whether for-profit hospitals react differently than not-for-profit hospitals to managed care pressures and hospital competition in providing charity care. A two equation model is estimated using 1996 data from California hospitals. The results indicate that in mixed ownership markets, for-profit hospitals provide significantly less charity care as not-for-profit hospitals in the market provide more. Unexpectedly, study for-profit hospitals were not more influenced by price competition than other hospitals with respect to charity care. Having a unique role in providing charity care may justify continuing tax exemption for not-for-profit hospitals and enhance interest in payment and other policies with regard to conversions to ensure that not-for-profit hospitals continue to be represented in market areas.

Medical Care Research and Review, Vol. 59, No. 1, 59-78 (2002)
DOI: 10.1177/1077558702059001003
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M. Schlesinger and B. H. Gray
How Nonprofits Matter In American Medicine, And What To Do About It
Health Aff., July 1, 2006; 25(4): W287 - W303.
[Abstract] [Full Text] [PDF]