Health Insurance and Public Policy: Risk, Allocation, and Equity

By Miriam K. Mills; Robert H. Blank | Go to book overview

pitals. Were the result the provision of more "undersupplied" public or quasipublic goods, the results of these types of changes would not be altogether bad. However, to the extent that the trustworthiness of nonprofit hospitals erodes because of becoming too businesslike, the raison d'être for nonprofit hospitals will become less legitimate. As a consequence, the distinctive economic role of the nonprofit hospital as a means of signaling information about the quality of its products will also diminish.

The traditional mission of the nonprofit hospital is historically linked to its service of the poor and the disenfranchised ( Sanders, 1991). The research reported in this chapter shows that nonprofit hospitals are still faithful to this traditional dimension of the nonprofit health care mission because they engage in extensive charity care and community benefit activities. However, whether nonprofit hospitals can continue--with or without a tax exemption--to fund these activities, survive in a highly competitive environment, and avoid the loss of the public's perception of trustworthiness and legitimacy is a matter still open to speculation.


NOTES
1.
The data for this research were drawn from a number of sources. Foremost among them were the 1986 Catholic Health Association Care of the Poor Survey; the 1988 Catholic Health Association Annual Survey; the 1987 Annual Survey of the American Hospital Association; a survey of Catholic hospitals constructed by the researcher; and the CACI 1986 Sourcebook of Demographics and Buying Power. The sample consisted of 595 acute care Catholic hospitals, which compose approximately 10 percent of all nonfederal hospitals and which control approximately 15 percent of all nonfederal hospital beds in the United States ( Unger, 1990).
2.
The pure charity care measure, however, is probably the least statistically reliable measure. This conclusion was reached after discovering the fact that 40 of the hospitals in the sample recorded $0 of charity care on the pure charity care line item of the hospital's income and expense statement. In all probability, these hospitals, like most hospitals, had a difficult time actually separating pure charity care from bad debts. If this were the case, the pure charity care measure could be greatly underestimated. For a more detailed discussion and statistical illustration, see Sanders , 1991.

REFERENCES

Aday L. A. and R. M. Andersen. 1974. "Framework for the Study of Access to Medical Care." Health Services Research 9:208-20.

American Hospital Association. 1987. Annual Survey. Chicago: American Hospital Association.

-----. 1988. Community Benefit and Tax-Exempt Status: A Self-Assessment Guide for Hospitals. Chicago: American Hospital Association.

Andersen R. and L. A. Aday. 1978. "Access to Medical Care in the U.S.: Realized and Potential." Medical Care 16:533-48.

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