The financial characteristics of hospitals under for-profit and nonprofit contract management

Abstract

In this assessment of the financial characteristics of a large sample of contract-managed hospitals compared with traditionally managed hospitals, emphasis was given to differences between hospitals managed by for-profit and nonprofit organizations and between hospitals before and after they were contract managed. Our findings suggest higher profitability for hospitals managed by nonprofit organizations in light of their poor profitability prior to contract management and better activity ratios for for-profit managed hospitals. These and other findings are discussed in terms of their implications for both hospital administrators and researchers.