Health care.

• Position: Conference held on October 23, 1998

The NBER's Program on Health Care met on October 23 in Cambridge, The day's program, organized by Daniel Kessler and Frank A. Wolak of NBER and Stanford University, was:

Elliot Fisher and Elaine Silverman, Dartmouth College, and Jonathan S. Skinner, NBER and Dartmouth College, "The Influence of For-Profit and Not-for-Profit Hospital Ownership on Medicare Spending"

Sean Ennis, U.S. Department of Justice; Michael Schoenbaum, RAND; and Theodore Keeler, University of California, Berkeley, "Optimal Prices and Costs for Hospitals With Excess Capacity"

Jean Abraham, Carnegie Mellon University, and Martin Gaynor and William B. Vogt, NBER and Carnegie Mellon University, "Entry and Competition in Hospital Markets"

Frank A. Sloan, NBER and Duke University; Gabriel Picone, University of South Florida; and Donald Taylor and Shin-Yi Chou, Duke University, "Hospital Ownership and Cost and Quality of Care: Is There a Dime's Worth of Difference?" (NBER Working Paper No. 6706)

Paul J. Gertler, NBER and University of California, Berkeley, and Orville Solon, University of the Philippines, "Who Benefits From Social Health Insurance in Low-Income Countries?"

Fisher, Silverman, and Skinner compare per-capita Medicare spending in areas served by for-profit and not-for-profit hospitals. Using data from the American Hospital Association's Annual Survey of Hospitals, the authors categorize Hospital Service Areas (HSAs) as for-profit or not-for-profit in both 1989 and 1995. They then use data from the Continuous Medicare History Sample to calculate 1989 and 1995 reimbursement rates in each HSA. For-profit HSAs were most concentrated in the Southeastern and Pacific United States and were more likely to have a multihospital system affiliation and less likely to be affiliated with a medical school than the not-for-profit HSAs. Total per-capita Medicare spending in the for-profit HSAs that did not change status was higher than in the not-for-profits in both 1989 and 1995; it also grew at a faster rate, largely because of growth in spending on hospital and home health care services. HSAs converting to for-profit status also experienced higher growth rates than the not-for-profit HSAs that did not convert. Per-capita Medicare spending in HSAs served by for-profit hospitals was higher and grew faster than that in areas served by not-for-profit hospitals.

Ennis, Schoenbaum, and Keeler analyze issues of optimal hospital pricing in the presence of excess capacity, and then...