Ownership structure and the quality of medical care: evidence from the dialysis industry

Quality-of-care issues in the US dialysis industry have led to proposals to proscribe physician ownership of these facilities. The logic behind this approach relates to a profits/quality tradeoff created by the existing reimbursement structure. Given that tradeoff, separating ownership from quality-of-care decision making ostensibly could improve performance. Our empirical results, however, do not support that expectation. We find that, within the for-profit sector, physician-owned clinics deliver significantly higher quality-of-care than their corporate-owned counterparts. No significant difference was found between physician-owned for-profit and not-for-profit clinics. © 2000 Elsevier Science B.V. All rights reserved. JEL classification: I18; L84