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Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Nonprofit Organizations in the Health Sector

  • Richard G. Frank
  • David S. Salkever
Journal of Economic Perspectives
vol. 8, no. 4, Fall 1994
(pp. 129–144)
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Abstract

Government appears to both promote and mistrust nonprofit organizations in the health sector. Tax exemptions, subsidies, and preferential treatment in contracts support these organizations. Legislation that links the supply of charity care to tax exemptions demonstrates mistrust. In this paper, the authors argue that information asymmetries lie at the heart of the current discomfort with tax policy toward nonprofit health-care providers. The authors examine current policy in terms of the rationale for the exemption of nonprofit health-care organizations from taxes as well as the ability of government to monitor performance of these organizations.

Citation

Frank, Richard G., and David S. Salkever. 1994. "Nonprofit Organizations in the Health Sector." Journal of Economic Perspectives, 8 (4): 129–144. DOI: 10.1257/jep.8.4.129

JEL Classification

  • I11 Analysis of Health Care Markets
  • L31 Nonprofit Institutions; NGOs
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