LDI Research Seminar featuring Richard Hirth, PhD: Competitive Spillovers Across Non-profit and For-profit Nursing Homes

LDI Research Seminar Series
Richard Hirth, PhD
Associate Professor of Health Management and Policy
Department of Health Management and Policy

University of Michigan School of Public Health

Competitive Spillovers Across Non-profit and For-profit Nursing Homes

January 11, 2002, 12:00 p.m.
Colonial Penn Center Auditorium
(3641 Locust Walk)

Biosketch Abstract

Biosketch
Dr. Hirth received his Ph.D. in Economics from the University of Pennsylvania in 1993. His dissertation examined the roles of non-profit ownership and consumer information in the nursing home industry. His research interests include health insurance, the relationship between managed care and the adoption and utilization of medical technologies, competition between for-profit and not-for-profit health care providers, long-term care, and the economics of end stage renal disease care. Dr. Hirth has received several research awards, including the Kenneth J. Arrow Award in Health Economics, awarded annually by the American Public Health Association and the Internation Health Economics Association to the best paper in health economics (1993), the Excellence in Research Award in Health Policy from the Blue Cross/Blue Shield of Michigan Foundation (1998), and the Thompson Prize for Young Investigators from the Association of University Programs in Health Administration (1999). Dr. Hirth has taught microeconomics and health economics at the undergraduate, Masters and Ph.D. levels and has taught decision analysis and cost-effectiveness analysis to members of several professional organizations.

Abstract
The importance of non-profit institutions in the health care sector has generated a large theoretical and empirical literature examining quality differences between nonprofit and for-profit nursing homes. Recent theoretical work has emphasized that much of this empirical literature is flawed in that previous studies use categorical variables to capture the direct effects of ownership rather than accounting for the share of nonprofit nursing homes in the market. This analysis considers whether competitive spillovers from nonprofits lead to higher quality in for-profit nursing homes. Using instrumental variables to account for the potential endogeneity of nonprofit market share, this study finds that an increase in nonprofit market share improves overall and for-profit nursing home quality. These findings are consistent with the hypothesis that nonprofits serve as a quality signal for uninformed nursing home consumers.