Responding to financial pressures. The effect of managed care on hospitals' provision of charity care Mas, Nuria

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Mas, Nuria
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International Journal of Health Care Finance and Economics
Hospitals; Health insurance industry; Medically uninsured persons
Byline: Nuria Mas (1) Keywords: Financial pressures; Health insurance; Uninsured; Managed care; Charity care; Safety net; I11; I13; G22 Abstract: Healthcare financing and insurance is changing everywhere. We want to understand the impact that financial pressures can have for the uninsured in advanced economies. To do so we focus on analyzing the effect of the introduction in the US of managed care and the big rise in financial pressures that it implied. Traditionally, in the US safety net hospitals have financed their provision of unfunded care through a complex system of cross-subsidies. Our hypothesis is that financial pressures undermine the ability of a hospital to cross-subsidize and challenges their survival. We focus on the impact of price pressures and cost-controlling mechanisms imposed by managed care. We find that financial pressures imposed by managed care disproportionately affect the closure of safety net hospitals. Moreover, amongst those hospitals that remain open, in areas where managed care penetration increases the most, they react by closing the health services most commonly used by the uninsured. Author Affiliation: (1) IESE Business School and PPSRC Research Center, Av. Pearson 21, 08034, Barcelona, Spain Article History: Registration Date: 15/01/2013 Received Date: 10/09/2012 Accepted Date: 14/01/2013 Online Date: 07/02/2013
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