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Organizational Dynamics in the U.S. Healthcare System: Incentives, Structures, and Access

Saturday, November 15, 8:30 to 10:00am, Property: Hyatt Regency Seattle, Floor: 5th Floor, Room: 512 - Willapa

Session Submission Type: Panel

Abstract

This session examines how variations in the structure and geography of healthcare delivery influence health outcomes and the behavior of institutions. The first paper discusses how improved local access to mental health facilities leads to a reduction in mortality rates associated with mental health and behavioral disorders. The paper estimates indicate that a 10% increase in facilities lowers a county's mental health and behavioral disorders rate by 2%.

The second paper examines the effects of hospital closures on the financial performance of nearby hospitals, differentiating outcomes based on ownership type. Tracking over 5,000 hospitals nationwide from 2011 to 2019, the study finds that for-profit neighboring hospitals capitalize on reduced competition by increasing their charge-to-cost ratios by nearly 200% and net profit margins by 6.1%, reflecting a profit-maximizing strategy. Nonprofit hospitals also experience financial benefits, though to a lesser extent, while governmental hospitals show minimal or negative financial impacts.

The third paper analyzes trends in CEO compensation across nonprofit and for-profit healthcare systems. By utilizing compensation data from the nonprofit hospital Form 990s and proxy statements from publicly traded for-profit health systems, the study reveals that base salaries for the largest for-profit systems increased by 2.6%, while base salaries for a matched sample of nonprofit systems grew by 15.1%.

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