Date of Conferral
Public Policy and Administration
Steven A. Matarelli
Despite a large body of literature addressing the issue, questions remain about whether nonprofit hospitals provide more community benefit than do for-profit hospitals. This lack of information impacts governments, hospitals, and the healthcare industry, as stakeholders attempt to generate requirements to which hospitals should adhere to maintain nonprofit status, and thus tax exemption. This study addressed this lack of information by examining U.S. hospitals through the lens of stewardship theory to determine whether nonprofits are better stewards of the public good than for-profits, and thus likely to provide higher quality and access. The study applied logistic regression to Centers for Medicare and Medicaid Services (CMS) data indicating levels of perceived quality, or patient satisfaction, and American Hospital Association data identifying service mix profitability, an indicator of access. The sample included all 2,701 U.S. hospitals receiving CMS funding. Findings indicated that high quality hospitals were more likely to be nonprofit than for-profit (b = 0.07; Exp(B) = 1.07; p = .000). Neutral access hospitals, those with mid-range service mix profitability, were more likely to be nonprofit than for-profit (b = 1.73; Exp(B) = 5.63; p = .000) as were high access hospitals, those with low service mix profitability (b = .276; Exp(B) = 1.32; p = .04). The R_L^2 for the models was .06 and .03, respectively. Given this limited predictive power, it seems unlikely the added value (access and quality) nonprofits are likely to provide justifies tax exemption. If further research supports this argument for other potentially relevant variables such as technical quality of care, governments could remove nonprofit hospitals' tax exemptions and apply the resulting tax revenue to other policy areas to realize positive social change.