How do nonprofits respond to negative wealth shocks? The impact of the 2008 stock market collapse on hospitals

• 成果类型: Article
• 署名作者: Dranove, David; Garthwaite, Craig; Ody, Christopher
• 署名单位: Northwestern University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12184
• 发表日期: 2017
• 页码: 485-525
• 关键词: competition

摘要

The theory of cost shifting posits that nonprofit firms share the pain of negative financial shocks with their stakeholders, for example, by raising prices. We examine how nonprofit hospitals responded to the sharp reductions in their assets caused by the 2008 stock market collapse. The average hospital did not raise prices, but hospitals with substantial market power did cost shift in this way. We find no evidence that hospitals reduced treatment costs. Hospitals eliminated but left unchanged their offerings of profitable services. Taken together, our results provide mixed evidence on whether nonprofits behave differently from for-profits.