Munich Personal RePEc Archive

Exit from the Hospital Industry

Ciliberto, Federico and Lindrooth, Richard (2007): Exit from the Hospital Industry. Published in: Economic Inquiry , Vol. 45, No. 1 (1. January 2007): pp. 71-81.

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Abstract

We study the exit of hospitals from the market for inpatient services. More generous hospital reimbursement significantly reduces the probability of exit throughout the 1990s. Conditional on reimbursement levels, hospital efficiency was not a significant determinant in the early 1990s but in the mid- to late 1990s, less efficient hospitals were significantly more likely to exit. Throughout the period, high-tech services increased the probability of survival, and for-profit hospitals were more likely to exit. The role of Medicare as a determinant of exit became less important in the latter half of the 1990s.

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