Mission vs. Margin: The Effects of Catholic Health System Ownership on Hospital Operations

The number of Catholic hospitals grew by 28% between 2001 and 2020, and today almost one-fifth of U.S. nonprofit hospitals are Catholic. Catholic systems face conflicting institutional pressures to provide mission-oriented services while remaining financially competitive. Using 2009-2022 data from the American Hospital Association (n = 33,552 hospital-years), we applied difference-in-differences methods to compare changes in hospital operations after acquisition by Catholic and non-Catholic systems relative to the control group of never-acquired hospitals. Catholic-acquired hospitals were more likely to offer some mission-oriented services, including chaplaincy and charity care (average treatment effect on the treated, ATT, 10.41 percentage-point [pp] and 3.97 pp, respectively), while non-Catholic-acquired hospitals were less likely to operate an obstetrics unit (ATT -3.45 pp) after acquisition relative to the control group. Hospitals experienced similar cost-cutting measures after acquisition relative to the control group, including reduced operating expenses and employment, regardless of system ownership type. Our findings provide rigorous empirical evidence to inform ongoing policy debates regarding the expansion of Catholic health care.