Economics Department Research Seminar | Weatherhead School at Case Western Reserve University

Economics Department Research Seminar

What do nonprofit Hospitals Maximize? Evidence from California's Seismic Retrofit Mandate

Despite a large literature and considerable policy interest, debate remains over the motives of nonprofit hospitals.  We test four leading theories of nonprofit hospital behavior by studying the response to a large, plausibly exogenous fixed cost shock generated by an unfunded seismic retrofit mandate in California. Pre-mandate, we find that seismic risk is uncorrelated with a host of hospital and neighborhood characteristics as well as service provision in both levels and changes.  In contrast, post-mandate, seismic risk predicts increases in hospital shutdown, and, for nonprofit hospitals, an increase in the provision of a range of profitable services but not charity care. These results allow us to reject two popular theories of nonprofits -- ``for-profits in disguise'' and ``pure altruism''  -- and lend support for theories of nonprofits as perquisite or output maximizers.

Please join the Economics Department for a research seminar.  This event is open to all Case Western Reserve University faculty, Ph.D. students, economic majors and minors, and those interested in economics research.
Contact Information:

Teresa Kabat

Friday, Nov. 10, 2017 from 12:30 p.m. to 2 p.m.
Peter B. Lewis Building, Room 258
11119 Bellflower Road
Cleveland, OH 44106-7235
United States
Speaker(s): Mireille Jacobson, Ph.D., UC Irvine
Sponsored by: Economics Department
What do Nonprofit Hospitals Maximize?


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