Atlantic Economic Journal

, Volume 37, Issue 3, pp 259–277 | Cite as

Hospital Financial Conditions and the Provision of Unprofitable Services

  • Hsueh-Fen ChenEmail author
  • Gloria J. Bazzoli
  • Hui-Min Hsieh


Increases in hospital financial pressure resulting from public and private payment policy may substantially reduce a hospital’s ability to provide certain services that are not well compensated or are frequently used by the uninsured. The objective of this study is to examine the impact of hospital financial condition on the provision of these unprofitable services for the insured and uninsured. Economic theory provides the conceptual underpinnings for the analysis, and a longitudinal empirical analysis is conducted for an eight-year study period. The results indicate that not-for-profit hospitals with strong financial performance provide more unprofitable services for the insured and uninsured than do not-for-profit hospitals with weaker condition. For-profit hospital provision of these services is not influenced by their financial condition and instead may reflect actions to meet community expectations or to offer a sufficiently broad service array to maintain the business of insured patients.


Hospital financial condition Unprofitable services Insured patients Uninsured patients 




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Copyright information

© International Atlantic Economic Society 2009

Authors and Affiliations

  • Hsueh-Fen Chen
    • 1
    Email author
  • Gloria J. Bazzoli
    • 2
  • Hui-Min Hsieh
    • 2
  1. 1.Department of Health Management and PolicyUniversity of North Texas Health Science CenterFort WorthUSA
  2. 2.Department of Health AdministrationVirginia Commonwealth UniversityRichmondUSA

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