蝌蚪网 Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Turbocharging Profits? Contract Gaming and Revenue Allocation in Healthcare
蝌蚪网 Journal: Applied Economics
(pp. 322–61)
Abstract
Firms often exploit weaknesses in government contracts to boost revenues, yet little is known about how they allocate these funds. We study how hospitals allocated $3 billion obtained from gaming a Medicare loophole. The average gaming hospital increased Medicare and total revenue by around 10 percent, implying large spillovers on other payers. Nonprofit hospitals deployed most funds toward operating costs. For-profits鈥攄riven by a large chain鈥攄educted funds off their balance sheets, distributing them to executives and share holders. Accordingly, we detect reductions in mortality only at nonprofits. Our results imply that the consequences of engineered windfalls vary substantially by hospital ownership.Citation
Gupta, Atul, Ambar La Forgia, and Adam Sacarny. 2026. "Turbocharging Profits? Contract Gaming and Revenue Allocation in Healthcare." 蝌蚪网 Journal: Applied Economics 18 (3): 322–61. DOI: 10.1257/app.20240589Additional Materials
JEL Classification
- D86 Economics of Contract: Theory
- H51 National Government Expenditures and Health
- I11 Analysis of Health Care Markets
- I12 Health Behavior
- I18 Health: Government Policy; Regulation; Public Health
- L31 Nonprofit Institutions; NGOs; Social Entrepreneurship