Ownership and Performance: The Case of Outpatient Mental Health Clinics

Policy analysts and researchers have been concerned with the growth and impact of for-profit institutions providing health care services. Research results to date have been mixed on the effect of ownership on quality and cost to payers. Equivocal findings may be due, in part, to measurement limitations inherent in facility-level data. This study reports results from a homogeneously insured population receiving outpatient mental health care at proprietary and nonprofit clinics. Data are claims on behalf of 30,000 covered individuals served at 223 clinics. Controls for case mix and other variables permit isolation of the impact of form of ownership. Using regression analysis, the authors find that payments to proprietary clinics exceeded payments to private nonprofit clinics by 27%, public clinics by 19%, and religious clinics by 17%. All differences were significant. This finding suggests that proprietary clinics are on average more commercially oriented than nonprofit facilities. (December 1987)