A comparison of for-profit and not-for-profit hospitals on the cost of mental health admissions

Harv Rev Psychiatry. Jul-Aug 1994;2(2):97-103. doi: 10.3109/10673229409017122.


The debate around health reform has raised questions about costs of care and the nature of competition in the delivery of care. This study examines whether the profit incentive leads to more-cost-efficient delivery of psychiatric and substance-abuse care. The data are from paid claims for 561 psychiatric and substance-abuse admissions in 1985-1987 from two very large national corporations with generous indemnity health plans that included nondiscriminatory mental health benefits. We found that episode-paid claims for admissions to for-profit facilities, after adjustments for case-mix and facility type, were higher. The stays of children in for-profit hospitals, relative to those of adults, were longer and more expensive.

Publication types

  • Comparative Study
  • Research Support, U.S. Gov't, P.H.S.

MeSH terms

  • Adult
  • Female
  • Hospital Costs / statistics & numerical data*
  • Hospitals, Proprietary / economics*
  • Hospitals, Voluntary / economics*
  • Humans
  • Length of Stay
  • Male
  • Mental Health Services / economics*
  • Middle Aged
  • Patient Admission / economics*
  • Retrospective Studies
  • Substance-Related Disorders / rehabilitation*
  • United States