Abstract
This study examines the circumstances in which a large third-party payer or regulator might want to set hospital prices to yield a positive rate of return on equity capital. The level of return is shown to depend on the willingness of donors to make funds available in the community relative to the (derived) demand for capital to produce output. It is shown that the appropriate price might well be set to yield a zero or below-market return, and that the return to not-for-profit firms should generally be less than that to for-profit firms, if for-profit firms are to be active in the market.
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Selected References
These references are in PubMed. This may not be the complete list of references from this article.
- Conrad D. A. Returns on equity to not-for-profit hospitals: theory and implementation. Health Serv Res. 1984 Apr;19(1):41–63. [PMC free article] [PubMed] [Google Scholar]