Abstract
The challenges concerning hospital performance in recent years have been the motivation to improve the quality of the health-care services they provide, to improve the efficiency of their operation, to reduce their costs, and to better cover the social needs of health-care services. There are different types of hospital ownership which all coexist in a competitive environment with different characteristics across countries and regions.
In this chapter we deal with the organizational forms of hospitals, what the theory says about each type of hospital, and the role the government could play when different types of hospitals coexist.
In particular, this chapter:
-
Analyzes hospital ownership in depth
-
Presents and analyzes the theory of for-profit, non-profit, and public hospital types
-
Examines the role of government toward different types of hospitals
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Anagnostopoulos, K. P. (2005). The economics of cooperation between public and private sector. Theoretical framework and crucial issues. In P. Ipsilantis & K. Syrakoulis (Eds.), Project management the Greek experience (pp. 67–89). Athens, Greece: Propobos Publishing. (in Greek).
Angelopoulou, P., Kangis, P., & Babis, G. (1998). Private and public medicine: A comparison of quality perceptions. International Journal of Health Care Quality Assurance, 11(1), 14–20.
Ballou, J. P., & Weisbrod, B. A. (2003). Managerial rewards and the behavior of for-profit, governmental, and nonprofit organizations: Evidence from the hospital industry. Journal of Public Economics, 87(9–10), 1895–1920.
Barr, S. A. (2007). A research protocol to evaluate the effectiveness of public–private partnerships as a means to improve health and welfare systems worldwide. American Journal of Public Health, 97(1), 19–25.
Baumol, W. J., & Bowen, W. G. (1965). On the performing acts. The American Economic Review, 55(2), 495–502.
Bay, C. W. (1979). Cost comparisons of for profit and non-profit hospital. Social Science & Medicine. Part C: Medical Economics, 13(4), 219–225.
Bayindir, E. C. (2012). Hospital ownership type and treatment choices. Journal of Health Economics, 31(2), 359–370.
Bjorvatn, A. (2018). Private or public hospital ownership. Does it really matter? Social Science & Medicine, 196, 166–174.
Brogaard, L., & Petersen, O. H. (2018). Public-private partnerships (PPPs) in development policy: Exploring the concept and practice. Development Policy Review, 97(s2), O729–O747.
Brown, D., & Moore, M. (2001). Symposium: New roles and challenges for NGOs. Nonprofit and Voluntary Sector Quarterly, 30(3), 569–587.
Buchanan, J. M., & Tollison, R. D. (1972). Theory of public choice. Ann Arbor, MI: University of Michigan Press.
Chletsos, M. (2011). Health economics. Athens, Greece: Pataki Publications. (in Greek).
Chou, S. Y. (2002). Asymmetric information, ownership and quality of care: An empirical analysis of nursing homes. Journal of Health Economics, 21(2), 293–311.
Cornelius, N., Todres, M., Janjuha-Jivraj, S., Woods, A., & Wallace, J. (2008). Corporate social responsibility and the social enterprise. Journal of Business Ethics, 81(2), 355–370.
Dranove, D. (1988). Pricing by non-profit institutions: The case of hospital cost-shifting. Journal of Health Economics, 7(1), 47–57.
Duggan, M. (2002). Hospital market structure and the behavior of not-for-profit hospitals: Evidence from responses to California’s disproportionate share program. The Rand Journal of Economics, 33(3), 433–446.
El-Jardali, F., Tchaghchagian, V., & Jamal, D. (2009). Assessment of human resources management practices in Lebanese hospitals. Human Resources for Health, 7(84), 1–9. Retrieved from https://human-resources-health.biomedcentral.com/articles/10.1186/1478-4491-7-84
Feldstein, M. S. (1967). Economic analysis for health service efficiency. Amsterdam: North Holland Publishing.
Forsberg, B. C., Montagu, D., & Sundewall, J. (2011). Moving towards in depth knowledge on the private health sector in low and middle income countries. Health Policy and Planning, 26(Suppl.. 1), i1–i3.
Francois, P. (2001). Employee care and the role of nonprofit organizations. Journal of Institutional and Theoretical Economics, 157(3), 443–464.
Francois, P. (2003). Not for profit provision of public services. The Economic Journal, 113(486), C53–C61.
Frank, R., & Salkever, D. (1991). The supply of charity services by nonprofit hospitals: Motives and market structure. RAND Journal of Economics, 22(3), 43–45.
Gamm, E. D. (1996). Dimensions of accountability for not-for-profit hospitals and health systems. Health Care Management Review, 21(2), 74–86.
Georgiadis, M. E. (1967). Business economics. Athens, Greece: Papazisis Publishing. (in Greek).
Goering, G. E. (2007). The strategic use of managerial incentives in a non-profit firm mixed duopoly. Managerial and Decision Economics, 28(2), 83–91.
Gravelle, H., & Sivey, P. (2010). Imperfect information in a quality-competitive hospital market. Journal of Health Economics, 29(4), 524–535.
Harris, J. E. (1977). The internal organization of hospitals: Some economic implications. The Bell Journal of Economics, 8(2), 467–482.
Haugh, H. (2012). The importance of theory in social enterprise research. Social Enterprise Journal, 8(1), 7–15.
Hirth, R. A. (1999). Consumer information and competition between nonprofit and for-profit nursing homes. Journal of Health Economics, 18(2), 219–240.
Hoerger, T. J. (1991). Profit variability in for-profit and not-for-profit hospitals. Journal of Health Economics, 10(3), 259–289.
Horwitz, J. R., & Nichols, A. (2007). What do nonprofits maximize? Hospital service provision and market ownership mix (NBER Working Paper 13246). University of Michigan Law School. Retrieved from https://repository.law.umich.edu/cgi/viewcontent.cgi?referer=https://scholar.google.gr/&httpsredir=1&article=1073&context=law_econ_archive
Horwitz, J. R., & Nichols, A. (2009). Hospital ownership and medical services: Market mix, spillover effects, and nonprofit objectives. Journal of Health Economics, 28(5), 924–937.
Hughes, P., & Luksetich, W. (2010). Modeling nonprofit behavior. In B. A. Seaman & D. R. Young (Eds.), Handbook of research on nonprofit economics and management (2nd ed., pp. 120–141). Northampton, MA: Edward Elgar Publishing.
Hunter, D. E. K. (2006). Using a theory of change approach to build organizational strength, capacity and sustainability with not-for-profit organizations in the human services sector. Evaluation and Program Planning, 29(2), 193–200.
Ifantopoulos, Y. (2006). Health economics. Athens, Greece: Tipothito Publishing. (in Greek).
Intzesiloglou, N. (1992). Society and new technology. Thessaloniki, Greece: Sakkoulas Publishing. (in Greek).
Jabnoun, N., & Chaker, M. (2003). Comparing the quality of private and public hospitals. Managing Service Quality: An International Journal, 13(4), 290–299.
Jamali, D., Hallal, M., & Abdallah, H. (2010). Corporate governance and corporate social responsibility: Evidence from the healthcare sector. Corporate Governance. The International Journal of Business in Society, 10(5), 590–602.
Johnston, L. M., & Finegood, D. T. (2015). Cross-sector partnerships and public health: Challenges and opportunities for addressing obesity and noncommunicable diseases through engagement with the private sector. Annual Review of Public Health, 36(1), 255–271.
Jordan, L., & VanTuijl, P. (2006). Rights and responsibilities in the political landscape of NGO accountability: Introduction and overview. In L. Jordan & P. Van Tuijl (Eds.), NGO accountability: Politics, principles & innovation (pp. 3–20). London: Earthscan.
Kaye, H. S., Harrington, C., & LaPlante, M. P. (2010). Long-term care: Who gets it, who provides it, who pays, and how much? Health Affairs, 29(1), 11–21.
Keeling, D. (1972). Management in government. London: George Allen & Unwin.
Kekatos, E. B. (2010). Human hospital. Athens, Greece: Parisianou Publishing. (in Greek).
Kessler, D. & McClellan, M. (2001). The effects of hospital ownership on medical productivity (Working Paper 8537). Retrieved from http://www.nber.org/papers/w8537
Kessler, D., & McClellan, M. (2002). The effects of hospital ownership on medical productivity. RAND Journal of Economics, 33(3), 488–506.
Kondilis, E., Antonopoulou, L., & Benos, A. (2008). Cooperations between public–private sector in hospitals. Archives of Hellenic Medicine, 25(4), 496–508. (in Greek).
Kontaratos, A. (2003). The art of hospital management. Athens, Greece: Parisianou Publishing. (in Greek).
Kuttner, R. (1999). The American health care system: Wall street and health care. New England Journal of Medicine, 340(8), 664–668.
Languille, S. (2017). Public private partnerships in education and health in the global south: A literature review. Journal of International and Comparative Social Policy, 33(2), 142–165.
Layton, T., Ellis, R. P., McGuire, T. G., & Van Kleef, R. (2017). Measuring efficiency of health plan payment systems in managed competition health insurance markets. Journal of Health Economics, 56(December), 237–255.
Lee, J. (2004). NGO accountability: Rights and responsibilities, programme on NGO and civil society. Geneva, Switzerland: CASIN.
Leone, A. J., & van Horn, L. R. (2005). How do nonprofit hospitals manage earnings? Journal of Health Economics, 24(4), 815–837.
Lewis, D. (2002). Organization and management in the third sector: Towards a cross cultural research agenda. Non Profit Management & Leadership, 13(1), 67–83.
Lewis, D. (2003). Theorizing the organization and management of non-governmental development organizations: Towards a composite approach. Public Management Review, 5(3), 325–344.
Liarikos, K. (2008). Accountability in project management from environmental NPO: Theoretical approach and tools. In K. Syrakkoulis & A. Afouxenidis (Eds.), The dynamic and the limit of citizens’ society (pp. 29–56). Athens, Greece: Propobos Publications. (in Greek).
Machlup, F. (1967). Theories of the firm. Marginalist behavioral, managerial. The American Economic Review, 57(1), 1–33.
Marwell, N. P., & McInerney, P. B. (2005). The nonprofit/for-profit continuum: Theorizing the dynamics of mixed-form markets. Nonprofit and Voluntary Sector Quarterly, 34(1), 7–28.
McClellan, M. M., & Staiger, D. O. (2000). Comparing hospital quality at for-profit and not-for-profit hospitals. In D. M. Cutler (Ed.), The changing hospital industry: Comparing not-for-profit and for-profit institutions (pp. 93–112). Chicago: University of Chicago Press.
Moore, M. H. (2000). Managing for value: Organizational strategy in for profit, nonprofit and governmental organizations. Nonprofit and Voluntary Sector Quarterly, 29(1), 183–204.
Moscelli, G., Gravelle, H., Siciliani, L., & Gutackor, N. (2018). The effect of hospital ownership on quality of care: Evidence from England. Journal of Economic Behavior and Organization, 153, 322–344.
Nett, L. (1993). Mixed oligopoly with homogenous goods. Annals of Public and Cooperative Economics, 64(3), 367–393.
Newhouse, J. P. (1970). Toward a theory of nonprofit institutions: An economic model of a hospital. The American Economic Review, 60(1), 64–74.
Newhouse, J. P. (2002). Why is there a quality chasm? The barriers to good performance are more fundamental than simply the lack of organized systems. Health Affairs, 21(4), 13–25.
Nikolic, I. A., & Maikisch, H. (2006). Public-private partnerships and collaboration in the health sector. Washington, DC: The International Bank for Reconstruction and Development/The World Bank. Discussion Paper.
Oster, S. M. (1995). Strategic management for nonprofit organizations: Theory and cases. New York: Oxford University Press.
Pappa, C. H. (2016). Health care management and job satisfaction. Master Thesis, Medical School, University of Patra, Greece. (in Greek)
Patouillard, G., Goodman, C. A., Hanson, K. G., & Mills, A. J. (2007). Can working with the private for profit sector improve utilization of quality health services by the poor? A systematic review of literature. International Journal for Equity in Health, 6(17), 1–11. Retrieved from https://equityhealthj.biomedcentral.com/articles/10.1186/1475-9276-6-17 (Online 11 pages)
Pauly, M. V. (1987). Nonprofit firms in medical markets. The American Economic Review, 77(2), 257–262.
Pomeroy, B. (2008). The limits to public – Private partnership. The RUSI Journal, 143(4), 27–29.
Preston, A. E. (1988). The nonprofit firm: A potential solution to inherent market failures. Economic Inquiry, XXVI(July), 193–506.
Rodrigues, R., Trigg, L., Schmidt, A. E., & Leichsenring, K. (2014). The public gets what the public wants: Experiences of public reporting in long-term care in Europe. Health Policy, 116(1), 84–94.
Rose-Acerman, S. (1996). Altruism, nonprofits and economic theory. Journal of Economic Literature, XXXIV(June), 701–728.
Rosenthal, G., & Newbrander, W. (1996). Public policy and private sector provision of health services. International Journal Health Planning Management, 11(3), 203–216.
Rothenberg, J. (1951). Welfare implications of alternative methods of financing medical care. Journal of the American Association of University Teachers of Insurance, 18(1), 96–106.
Sarros, J. C., Coopen, B. K., & Santoro, J. C. (2011). Leadership vision, organizational culture, and support for innovation in not-for-profit and for-profit organizations. Leadership & Organization Development Journal, 32(3), 291–309.
Sekhri, N., Feachem, R., & Ni, A. (2011). Public-private integrated partnerships demonstrate the potential to improve health care access, quality, and efficiency. Health Affairs, 30(8), 1498–1507.
Shleifer, A., & Vishny, R. W. (1994). Politicians and firms. The Quarterly Journal of Economics, 109(4), 995–1025.
Skountzos, T. (2005). Economic development (Vol. A). Athens, Greece: Stamoulis Publishing. (in Greek).
Sloan, F. (2000). Not-for-profit Ownership and Hospital Behavior. In A. J. Culyer & J. P. Newhouse (Eds.), Handbook of Health Economics (Vol. 1, pp. 1141–1174). Amsterdam: Elsevier.
Spyridaki, H. (2008). Non-governmental organisations or developing enterprises: Modern challenges for the role of North developing nongovernmental organizations. In K. Syrakkoulis & A. Afouxenidis (Eds.), The dynamic and the limit of citizens’ society (pp. 57–80). Athens, Greece: Propobos Publications. (in Greek).
Steinberg, R. (1990a). Taxes and giving: New findings. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 1(2), 61–79.
Steinberg, R. (1990b). Labor economics and the nonprofit sector: A literature review. Nonprofit and Voluntary Sector Quarterly, 19(2), 151–169.
Steinberg, R. (2003). Economic theories of nonprofit organizations. In H. K. Anheier & A. Ben-Ner (Eds.), The Study of Nonprofit enterprise. Nonprofit and civil society studies (pp. 277–309). Boston, MA: Springer Publications.
Steinberg, R., & Bradford, G. (1993). The role of nonprofit enterprise in 1993: Hansmann revisited. Nonprofit and Voluntary Sector Quarterly, 22(4), 297–316.
Stevens, R., Moray, N., Bruneel, J., & Clarysse, B. (2015). Attention allocation to multiple goals: The case of for profit social enterprises. Strategic Management Journal, 36(7), 1006–1016.
Sussex, J. M. (2009). How fair? Competition between independent and NHS providers to supply non-emergency hospital care to NHS patients in England (September 1, 2009). (Office of Health Economics Briefing, No 50). Retrieved from SSRN: https://ssrn.com/abstract=2640148 or https://doi.org/10.2139/ssrn.2640148 (Online 32 pages)
Sutton, J. P., & Stensland, J. (2004). Promoting accountability: Hospital charity care in California, Washington and Texas. Journal of Health Care for the Poor and Underserved, 15(2), 237–250.
Theil, H. (1952). Qualities prices and budget inquiries. The Review of Economic Studies, 19(3), 129–147.
Tiemann, O., Schreyogg, J., & Busse, R. (2012). Hospital ownership and efficiency: A review of studies with particular focus on Germany. Health Policy, 104(2), 163–171.
Torchia, M., Calabrò, A., & Morner, M. (2015). Public–private partnerships in the health care sector: A systematic review of the literature. Public Management Review, 17(2), 236–261.
U.S. Government Accountability Office. (2008). Non-profit hospitals: Variation in standards and guidance limits comparison of how hospitals meet community benefit requirements. (Report to the Ranking Member, Committee on Finance, U.S. Senate, GAO-08-880). Washington, D.C.: General Accounting Office.
Vaillancourt Rosenau, P. (2003). Performance evaluations of for profit and nonprofit U.S. hospitals since 1980. Nonprofit Management and Leadership, 13(4), 401–423.
Van Thiel, S., & Leeuw, F. L. (2002). The performance paradox in the public sector. Public Performance & Management Review, 25(3), 267–281.
Weil, T. P. (2003). Governance in a period of strategic change in US healthcare. International Journal of Health Planning and Management, 18(3), 247–265.
World Health Organization. (1946). Constitution of the World Health Organization. Washington, D.C.: U.S. Department of State.
Zhao, X. (2016). Competition, information, and quality: Evidence from nursing homes. Journal of Health Economics, 49(September), 136–152.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Chletsos, M., Saiti, A. (2019). For-Profit Versus Not-For-Profit Hospitals and Public Hospitals. In: Strategic Management and Economics in Health Care. Springer, Cham. https://doi.org/10.1007/978-3-030-35370-4_7
Download citation
DOI: https://doi.org/10.1007/978-3-030-35370-4_7
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-35369-8
Online ISBN: 978-3-030-35370-4
eBook Packages: EducationEducation (R0)