Hospital Conversions from for-Profit to Nonprofit Status: The other Side of the Story

Abstract

The authors examined, on a case-by-case basis, the community impact of 15 for-profit hospitals that converted to nonprofit status. These for-profit conversions have been occurring in numbers comparable with those of nonprofit conversions (i.e., nonprofit hospitals that convert to for-profit status), but have attracted far less attention. For each for-profit conversion, the authors compared the change in uncompensated care with the loss to the local community in property tax revenue. In 11 of the 15 cases, the conversion was followed by some level of increase in uncompensated care. However, only three of these conversions produced enough additional uncompensated care to offset the loss in property tax revenue to the community. This analysis, while only a starting point for addressing the community impact of for-profit conversions, suggests that for-profit conversions do not uniformly promote the welfare of the communities where they occur.

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