Market competition may not reduce costs or lead to greater efficiency in hospitals

The U.S. has the most expensive per capita health care system in the world. As such, one of the main goals of the Affordable Care Act (ACA) is to reduce costs for citizens. Morgen S. Johansen and Ling Zhu examine how private, non-profit, and government-run hospitals have responded to local market competition and the ACA. They find that administrators from public, non-profit, and private hospitals prioritize different aspects of care and costs in the face of market competition and that public hospitals are much more responsive to the ACA reforms.