EXIT FROM THE HOSPITAL INDUSTRY |
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| Authors: | FEDERICO CILIBERTO RICHARD C LINDROOTH |
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| Institution: | 1. Ciliberto: Assistant Professor, Department of Economics, University of Virginia, P.O. Box 400182, Charlottes‐ville, VA 22904‐4182. Phone 1‐434‐924‐6755, Fax 1‐434‐982‐2904, E‐mail ciliberto@virginia.edu;2. We thank David Bradford, Atsushi Inoue, and Robert Porter for helpful comments and suggestions. This research was supported by RO1 HS10730‐01 from AHRQ. All errors are ours.;3. Lindrooth: Associate Professor, Department of Health Administration and Policy, Medical University of South Carolina, 151 Rutledge Avenue, Bldg B, P.O. Box 250961, Charleston, SC 29425‐0961. Phone 1‐843‐792‐2192, Fax 1‐843‐792‐1358, E‐mail lindrorc@musc.edu |
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| Abstract: | We study the exit of hospitals from the market for inpatient services. More generous hospital reimbursement significantly reduces the probability of exit throughout the 1990s. Conditional on reimbursement levels, hospital efficiency was not a significant determinant in the early 1990s but in the mid‐ to late 1990s, less efficient hospitals were significantly more likely to exit. Throughout the period, high‐tech services increased the probability of survival, and for‐profit hospitals were more likely to exit. The role of Medicare as a determinant of exit became less important in the latter half of the 1990s. (JEL I11, L11) |
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