Are for-profit hospital conversions harmful to patients and to Medicare?

We examine how changes in hospital ownership to and from for-profit status affect quality and Medicare payments per hospital stay,. Me hypothesize that hospitals converting to for-profit ownership boost postacquisition profitability by, reducing dimensions of quality, not readily, observed by, patients and by, raising prices. We find that 1-2 years after conversion to for-profit status, mortality of patients, which is difficult for outsiders to monitor, increases while hospital profitability rises markedly and staffing decreases. Thereafter, the decline in quality, is much lower. A similar decline in quality is not observed after hospitals switch from for profit to government or private nonprofit status.