Do religious nonprofit and for-profit organizations respond differently to financial incentives? The hospice industry

Richard C. Lindrooth*, Burton Allen Weisbrod

*Corresponding author for this work

Research output: Contribution to journalArticle

45 Scopus citations

Abstract

We study how for-profit and religious nonprofit hospices respond to an exogenous Medicare reimbursement incentive that encourages maximization of patient length of stay. Hospices have the incentive to selectively admit patients with longer expected lengths of stay, and admit patients sooner after a hospital discharge. We find that for-profit hospices are significantly less likely to admit patients with shorter, less profitable, expected lengths of stay. We do not find any difference in the timing of admission by ownership. Incentives for efficiency could be strengthened by a Medicare pricing system that replaced the current flat per diem payment with one that reflected the high costs at the beginning and end of hospice stay and the lower costs in between.

Original languageEnglish (US)
Pages (from-to)342-357
Number of pages16
JournalJournal of Health Economics
Volume26
Issue number2
DOIs
StatePublished - Mar 1 2007

Keywords

  • Hospice care
  • Long-term care
  • Medicare
  • Nonprofit hospices
  • Ownership differences

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health

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