Abstract
Since higher charges to private patients are a major source of financing for hospital care to the uninsured, increased price shopping by private payers may mean that hospitals are less able to provide such care. I study the effect of increased price shopping on California hospital markets over the 1984–1988 period. I find that there was a large fall in net private revenues and net income in the least concentrated hospital markets in the state after the advent of price shopping. Perhaps as a result, care to the uninsured fell dramatically in these markets as well, relative to more concentrated markets.
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