‘Who profits from nonprofits?’ asked Herzlinger and Krasker in a recent Harvard Business Review article. Their study examined whether not-for-profit hospitals achieve the intended social goals for which they are subsidised by society. In this paper, we report a reconsideration of Herzlinger and Krasker's question. Using a larger data set and a different statistical method, our findings are at variance with those of Herzlinger and Krasker and in general agreement with their critics.
Get full access to this article
View all access options for this article.
References
1.
BaysC. (1977). Case mix differences between nonprofit and for-profit hospitals. Inquiry, 14 (1), 17–21 March.
2.
BaysC. (1979). Cost comparisons of for-profit and non-profit hospitals. Social Science and Medicine, 13c, 219–225.
3.
BeckerE.SloanF. (1984). Hospital ownership and performance. Economic Inquiry, 22, July.
4.
BiggsE. L.KralewskiJ. E.BrownG. D. (1980). Contract-managed and traditionally managed nonprofit hospitals. Medical Care, 18, 585–596.
5.
CoelenC. (1986). Hospital ownership and comparative hospital costs. For-Profit Enterprise in Health Care. National Academy Press, Washington, DC.
6.
CoyneJ. (1978). A comparative study of the performance and characteristics of multihospital systems. PhD dissertation, University of California, Berkeley.
7.
CoyneJ. (1982). Hospital performance in multi-hospital system: comparative study of systems and independent hospitals. Health Services Research, 17, 302–329.
8.
FerberB. (1971). Analysis of chain-operated for-profit hospitals. Health Services Research, 6, 49–60.
9.
FitzgeraldJ.JacobsonB. (1987). Study fails to prove for-profits superiority. Health Progress68 (3), 32–37.
10.
GrayB. H. (ed) (1986). For-profit enterprise in health care. Washington, DC: National Academy Press.
11.
GrayB. H. (1987). Shaky basis for report's sweeping recommendations. Health Progress68 (3), 38–41.
12.
HerzlingerR. E.KraskerW. S. (1987). Who profits from non-profits?Harvard Business Review, 56 (1), 93–106.
13.
HillD.StewartD. (1972). Proprietary hospitals versus non-profit hospitals. Blue Cross Hospitals, March.
14.
Lewin and Associates, Inc. (1976). A study of investor-owned hospitals. Health Services Foundation, Chicago, Illinois.
15.
LewinT. (1987). A sharp debate on hospitals. The New York Times, 2 April.
16.
Lewin and Associates, Inc. (1981). Studies in the comparative performance of investor-owned and not-for-profit hospitals. Vol. 1, Industry Analysis. Washington, DC, pp 8–9.
17.
LewinL. (1981). Investor-owned and non-profits differ on economic performance. Hospitals, 52–58: July.
18.
PattisonR.KatzH. (1982). Investor-owned hospital management companies: Growth strategies and their implications. Draft contract final report for the Bureau of Health Facilities, Health Resources Administration, US Department of Health and Human Services, p69.
19.
PattisonR.KatzH. (1983). Investor-owned and not-for-profit hospital: A comparison based on California data. New England Journal of Medicine, 309, 347–353.
20.
PattisonR. (1986). Response to financial incentives among investor-owned and not-for-profit hospitals: An Analysis Basell or California Data, 1978–1982. For-Profit Enterprise in Health Care. Washington DC: National Academy Press.
21.
PavukA. (1986). For-profit or not-for-profit? that's no longer the right question, experts say. AHA News, 6. 2 November.
22.
RaffertyJ.SchweitzerS. (1974). Comparison of for-profit and non-profit hospitals: A re-evaluation. Inquiry, 11, 304–309, December.
23.
ReinhardtU. E. (1987). Flawed methods cripple study on non-for-profits. Hospital, 20 April, 136.
24.
RennS. (1985). The effects at ownership and system affiliation on the economic performance of hospitals. Inquiry, 22: 219–236, Fall.
25.
RuchlinD.PointerD.CannedyL. (1973). Comparison of for-profit investor-owned chains and non-profit hospitals. Inquiry, 10 December.
26.
RushingW. (1974). Differences in profit and nonprofit organisations: A study of effectiveness and efficiency on general short-stay hospitals. Administrative Science Quarterly, 19, 474–484.
27.
SloanF.VraciuR.Investor-owned and not-for-profit hospitals: Addressing some issues. Health Affairs, 2, 25–37.
28.
SloanF.BlumsteinJ.PetrinJ. (1985). Uncompensated hospital care: rights and responsibilities. Johns Hopkins University Press.
29.
VraciuR. (1981). HCA hospitals cost less in three states. Modern Healthcare, 11, 70–72.
30.
WattJ. (1986). The comparative economic performance of investor-owned chain and not-for-profit hospitals. New England Journal of Medicine. 314 (2), 89–96.
