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Ethical issues facing private, not-for-profit hospitals in the u.s.: the case of the methodist hospital system

Alan Blankley (Haworth College of Business, Western Michigan University)
Dana Forgione (Merrick School of Business, University of Baltimore)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Article publication date: 1 March 1996

68

Abstract

Pressures to contain costs have given private hospitals the economic incentive to reduce provision of charity care services, shifting the burden onto governmental hospitals. Budget pressures on governmental units have produced resistance to any further shift in the charity care burden. We observe in a lawsuit (State of Texas vs. The Methodist Hospital) what appears to be a classic moral hazard situation. The government expects a certain (unspecified) level of charity care to be performed in exchange for tax exemption; hospital management allegedly consumes perquisites and overstates reported charity care figures. Both sides use accounting numbers to defend their positions.

Citation

Blankley, A. and Forgione, D. (1996), "Ethical issues facing private, not-for-profit hospitals in the u.s.: the case of the methodist hospital system", Journal of Public Budgeting, Accounting & Financial Management, Vol. 8 No. 3, pp. 334-353. https://doi.org/10.1108/JPBAFM-08-03-1996-B002

Publisher

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Emerald Publishing Limited

Copyright © 1996 by PrAcademics Press

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