ROLE OF NONPROFIT PROVIDERS: POLICY IMPACTS

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The alcohol treatment sector has experienced major changes in the ownership composition of providers. While private nonprofit providers predominate, the market share of for-profit providers has grown and the share of public providers has begun to decline. Since non-profit and public providers supply the great bulk of non-remunerative community services (e.g., charity care), the changes in ownership structure and the increased financial pressure on all providers from enhanced competition and the increasing uninsured population raise questions about the system's ability to continue providing these services and to maintain access for disadvantaged groups. The proposed study will examine the response of nonprofit providers in the alcoholism treatment sector to these trends in ownership and financing. It will estimate the impacts of these trends on nonprofit providers' supply of community services and on their decisions about pricing and the intensity of services. The study will also examine the impacts of government policies in supplying and financing treatment on the ownership composition of the alcoholism treatment sector. The study has three components. First, individual facility and treatment unit data from the 1987 National Drug and Alcoholism Treatment Unit Survey (NDATUS) will be linked with data on state funding policies and data on provider system characteristics to examine determinants of provision of services to disadvantaged groups (e.g., treatment program for public inebriates, numbers of minority group clients treated as inpatients and outpatients, acceptance of Medicaid patients, and percent of alcoholism clients who were IV drug users) and intensity and costliness of services. Second,l NDATUS data aggregated to the state and metropolitan area level will be used to study the determinants of the nonprofit share of the overall market for alcoholism treatment services. Third, inpatient discharge abstract data from 12 states will be used to examine the supply of inpatient alcoholism treatment services by private nonprofit hospitals to Medicaid and uninsured patients. Each of these analyses will estimate the impacts of the following types of policy variables: Medicaid coverage and payment provisions, state benefit mandates, block grant funds, availability of publicly-owned treatment facilities, and available funds from state alcohol and drug agencies. Models of the determinants of some of these variables will also be estimated as the first stage of two-stage estimation process.