Economists have long been interested in the causal effects of different forms of ownership of healthcare providers. This interest stems from the well-known challenges inherent in the healthcare sector where consumers cannot assess quality of care, often do not pay on the margin, and insurers (or governments) rely on providers’ clinical judgment to deliver appropriate care. As a result, the healthcare sector in the US has a substantial fraction of non-profit and government-owned firms coexisting with for-profit owned providers. In some segments (e.g., hospitals), for-profit owned firms are in a small minority. In this talk, Dr. Atul Gupta will summarize work spanning multiple projects and discuss three important ongoing trends in ownership of US healthcare providers and how they affect costs, quality, and access to care. First, examine the effects of private equity ownership of nursing homes on patient outcomes and government spending. These results help inform the heated debate over the growing role of private equity firms in delivering healthcare. Second, examine the effects of chain ownership of hospitals. Chains can streamline operations and standardize care but may also use their market power to charge higher prices without improving quality of care. Although chains now own more than 80% of bed capacity among US hospitals, there is little evidence on how they may affect the industry. Third, examine the effects of converting government-owned hospitals to private management. These hospitals were setup as part of the safety net to serve vulnerable low-income patients, but over the last three decades about 40% of them have been handed over to private control. Surprisingly, this rapid decline in government control of hospital capacity has received little attention. The results speak to the vital role of government delivery of care even at a time when the government has expanded subsidized insurance plans so that there is nearly universal health insurance coverage. 

Dr. Atul Gupta is Assistant Professor of Health Care Management at the Wharton School, University of Pennsylvania, Senior Fellow at the Leonard Davis Institute for Health Economics, and Faculty Research Fellow at the National Bureau of Economic Research. He is an applied microeconomist with interests in Health Care, Public Finance and Industrial Organization. His current research examines various determinants of productivity in US health care including provider payment contract reforms, the effects of ownership and organization structure, consolidation, the use of advertising, and the expansion of managed care in public insurance.