Turbocharging Profits? Contract Gaming and Revenue Allocation in Healthcare

• 成果类型: Article
• 署名作者: Gupta, Atul; La Forgia, Ambar; Sacarny, Adam
• 署名单位: University of Pennsylvania; National Bureau of Economic Research; University of California System; University of California Berkeley; Columbia University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20240589
• 发表日期: 2026
• 关键词: hospital ownership; performance; incentives; price; readmissions; COMPETITION; signal; cost

摘要

Firms often exploit weaknesses in government contracts to boost revenues, yet little is known about how they allocate these funds. We study how hospitals allocated $3 billion obtained from gaming a Medicare loophole. The average gaming hospital increased Medicare and total revenue by around 10 percent, implying large spillovers on other payers. Nonprofit hospitals deployed most funds toward operating costs. For-profits-driven by a large chain-deducted funds off their balance sheets, distributing them to executives and shareholders. Accordingly, we detect reductions in mortality only at nonprofits. Our results imply that the consequences of engineered windfalls vary substantially by hospital ownership. (JEL D86, H51, I11, I12, I18, L31)