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J Health Care Finance. 2004 Summer;30(4):46-58.

The association of debt financing with not-for-profit hospitals' provision of uncompensated care.

Author information

1
Department of Health Policy and Management, School of Medicine, University of Kansas, Kansas City, KS, USA.

Abstract

Not-for-profit hospitals undertook unprecedented amounts of debt in the mid to late 1990s. Corporate finance theory and the literature on hospital financing suggest that debt may constrain hospitals' capacity to deliver uncompensated care. Using data from audited financial statements for a sample of hospitals, this article explores whether debt financing is associated with hospitals' provision of uncompensated care, an output central to many hospitals' service missions. Contrary to expectations, our analysis finds that higher debt is associated with higher levels of uncompensated care. However, the results may reflect the unusual economic and stock-market conditions prevailing in the mid 1990s, and they are consistent with the views of hospital financial managers and other practitioners whom we interviewed.

PMID:
15682952
[Indexed for MEDLINE]

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