Duggan, Mark2023-05-222023-05-222000-11-012016-06-09https://repository.upenn.edu/handle/20.500.14332/2556The hospital market is served by firms that are private for-profit, private not-for-profit, and government-owned and operated. I use a plausibly exogenous change in hospital financing that was intended to improve medical care for the poor to test three theories of organizational behavior. I find that the critical difference between the three types of hospitals is caused by the soft budget constraint of government-owned institutions. The decision-makers in private not-for-profit hospitals are just as responsive to financial incentives and are no more altruistic than their counterparts in profit-maximizing facilities. My final set of results suggests that the significant increase in public medical spending examined in this paper has not improved health outcomes for the indigent.This is a pre-copyedited, author-produced PDF of an article accepted for publication in The Quarterly Journal of Economics following peer review. The version of record - Duggan, M. (2000). Hospital ownership and public medical spending (No. w7789). National bureau of economic research is available online at http://repository.upenn.edu/Health and Medical AdministrationHealth EconomicsArticle