Theoretical models that were developed in the 1970's predict large differences in behavior between for-profit and nonprofit hospitals, while recent empirical studies have consistently failed to detect these differences. This paper attempts to solve this apparent contradiction by suggesting that organizations with different objectives may behave similarly under certain market conditions. By tracking key variables of hospital behavior in the United States between 1960 and 1999, this paper argues that the similar behavior of hospitals under different ownership structure found in recent empirical studies may be the result of a continuing convergence process. Theoretical analysis suggests that the introduction of federally funded insurance for certain patient groups may account for the growing convergence in the behavior of these two ownership types. Analysis of hospital-level data for California indicates that the convergence was effected largely through acquisitions of nonprofit hospitals by for-profit institutions and vice versa.

This paper provides evidence of the growing similarity in capacity of for-profit and nonprofit hospitals. In 1960, nonprofit hospitals maintained on average more than three times as many beds per hospital as their for-profit counterparts; following a monotonic decline in relative size, by 2000, the average nonprofit hospital was only 32% larger than the typical for-profit hospital. Hospital level data for the United States indicate that the convergence was driven primarily by industry-wide effects such as entry, exit and ownership switches, rather than expansions or downsizing of existing hospitals. These findings suggest that hospitals may in fact strategically choose their ownership type (nonprofit vs. for-profit status) and hence, their regulatory environment. Accordingly, I develop a model in which firms have identical objectives but differ in their ability to benefit from a given ownership form. In contrast to the existing literature, this approach relies neither on different ownership type-specific objectives nor on market failure to generate an equilibrium in which both ownership types are chosen by a strictly positive fraction of hospitals. Changes in the economic environment alter firms' incentives to maintain a given ownership type. This in turn induces firms to modify their capacity and encourages some firms to switch their ownership type. Crowding-out of government hospitals, population growth and increasing involvement of the government in the healthcare market may account for the convergence in size. Policymakers and legislators often exert pressure on nonprofit hospitals by tying tax-exemptions to hospital-level measures of community benefits such as free care for the indigent. I argue that by omitting industry-wide effects of a hospital's tax-exempt status on price and industry output, such pressure may both lead to convergence in size and be welfare decreasing. Analysis at the state and Metropolitan Statistical Area (MSA) level as well as at the hospital level corroborate the principal theoretical predictions.

Not-for-profit organizations play a critical role in the American economy. In health care, education, culture, and religion, we trust not-for-profit firms to serve the interests of their donors, customers, employees, and society at large. We know that such firms don't try to maximize profits, but what do they maximize? This book attempts to answer that question, assembling leading experts on the economics of the not-for-profit sector to examine the problems of the health care industry, art museums, universities, and even the medieval church. Contributors look at a number of different aspects of not-for-profit operations, from the problems of fundraising, endowments, and governance to specific issues like hospital advertising. The picture that emerges is complex and surprising. In some cases, not-for-profit firms appear to work extremely well: competition for workers, customers, and donors leads not-for-profit organizations to function as efficiently as any for-profit firm. In other contexts, large endowments and weak governance allow elite workers to maximize their own interests, rather than those of their donors, customers, or society at large. Taken together, these papers greatly advance our knowledge of the dynamics and operations of not-for-profit organizations, revealing the under-explored systems of pressures and challenges that shape their governance.

Vampires are back - and this time they want to be us, not drain us. This collection considers the recent phenomena of Twilight and True Blood, as well as authors such as Kim Newman and Matt Haig, films such as The Breed and Interview with the Vampire, and television programmes such as Being Human and Buffy the Vampire Slayer.