Which Hospitals Give Discounts? The Role of Institutional and Environmental Factors

Offering discounts on list prices in exchange for a large volume of business is a common practice in the healthcare industry. However, little is known about the characteristics of hospitals that engage in this practice or about the circumstances that promote this strategy. On the basis of data from the American Hospital Association and the Centers for Medicare and Medicaid Services, the authors reveal that hospital size, Medicare patient volume, net income, medical school affiliation, location in a metropolitan statistical area, and hospital system membership are factors positively linked with the amount of discounts provided by hospitals to third-party payers.