Nonprofit Hospitals:

For-Profit Ventures Pose Access and Capacity Problems

HRD-93-124: Published: Jul 22, 1993. Publicly Released: Aug 3, 1993.

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Pursuant to a congressional request, GAO provided information about joint ventures between nonprofit hospitals and physicians, focusing on the: (1) rate at which nonprofit hospitals participate in joint ventures; (2) extent to which these ventures serve the poor; (3) extent that joint ventures can contribute to excess capacity for community medical services; and (4) effect of recent federal and state regulatory actions on such joint ventures.

GAO found that: (1) the number of nonprofit hospitals participating in joint ventures doubled between 1984 and 1989; (2) nonprofit hospitals participated in joint ventures at the same rate as for-profit hospitals in 1991; (3) the joint ventures surveyed provided substantially less care to poor patients than their parent hospitals; (4) joint ventures can contribute to excess capacity for community health services; and (5) increased scrutiny by federal regulators is the main reason for the recent decline in joint ventures.

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