Wards Finance Seminar Series. “Can Nonprofits Save Lives Under Financial Stress? Evidence from the Hospital Industry”
Published: 12 March 2025
19 March 2025. Dr Janet Gao. Georgetown University
Dr Janet Gao. Georgetown Univesity
“Can Nonprofits Save Lives Under Financial Stress? Evidence from the Hospital Industry”
Wednesday, 19 March 2025. 15:00-16:30
Room 355, James Watt Building
Abstract
Previously dominated by nonprofit hospitals, the U.S hospital industry has seen a dramatic growth of for-profit hospitals to external financing shocks can generate adverse consequences for local communities. Using confidential patient discharge data, we show that negative shocks to hospitals' debt capacity lead to a greater increase in patient mortality in for-profit hospitals thant in nonprofit ones. This differential effect is not driven by differences in patient characteristics or patient-hospital sorting. It is concentrated among vulnerable patient populations, namely those without private insurance and greater health risks. We elucidate a mechanism; Likely due to non-distribution laws and tax exemption, nonprofit hospitals hold deeper cash reserves and thus can maintain spending spending on medical staff and equipment during the Crises. Overall, our evidence suggests that nonprofit hospitals are more resilient to capital market shocks and can better serve social interests during financially challenging times.
Bio
Janet Gao is the Lapeyre Family Associate Professor in Finance at McDonough School of Business, Georgetown University. Prior to joining Georgetown University, Janet Gao worked at Indiana University as an Assistant Professor in Finance and was granted tenure. Before joining Indiana University, Janet studied at Cornell University and obtained a degree of PhD in Finance as well as Master of Science in Economics.
Janet's research interests are in the areas of Financial Intermediation, Labor and Finance, and Sustainable Finance. Her work has been published in many top journals, including Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Journal of Accounting and Economics, The Accounting Review, Management Science, and Review of Finance. Janet Gao serves as an Associate Editor for the Journal of Financial Economics, the Review of Financial Studies and the Journal of Financial Intermediation.
For further information, please contact business-seminar-series@glasgow.ac.uk.
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First published: 12 March 2025