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Rates of return from hospital conversions
Frank A Sloan1, Christopher J Conover, Jan Ostermann
1Center for Health Policy, Department of Economics, Sanford Institute of Public Policy, Duke University, Durham, North Carolina 27708, USA.
Abstract:
This article presents information on the rates of return obtained by purchasers of U.S. hospitals since the mid 1980s. The key hypothesis tested in this study was whether for-profit acquirers are able to purchase hospitals at below-market prices. We test the hypothesis by comparing internal rates of return to an estimate of the weighted cost of capital for all for-profit hospitals in the year the transaction occurred.
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