Some Implications of Property Rights in Hospital Management

THIS paper derives and tests some implications about differences in behavior resulting from differences in property right arrangements, and in particular, between proprietary for-profit and nonproprietary not-for-profit hospitals (hereafter referred to as proprietary and nonproprietary hospitals respectively) . The arrangements in nonproprietary nonprofit enterprises are different from those in proprietary profit-seeking organizations because (1) certain rights or claims to benefits in nonproprietary organizations are not transferable by sale as they are in proprietary organizations, and (2) managers or workers in nonprofit organizations do not have exclusive claim on residual products (the current flows of money and nonmoney benefits) that is characteristic of for-profit enterprises.