An Empirical Investigation of Joint Ventures Between For-Profit and Tax-Exempt Nonprofit Hospitals

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dc.contributor.authorSmith, Pamela C.en
dc.contributor.committeechairSeago, W. Eugeneen
dc.contributor.committeememberYardley, James A.en
dc.contributor.committeememberCallihan, Debra S.en
dc.contributor.committeememberBrown, Robert M.en
dc.contributor.committeememberMajor, Raymond L.en
dc.contributor.departmentAccounting and Information Systemsen
dc.date.accessioned2014-03-14T20:09:20Zen
dc.date.adate2001-04-16en
dc.date.available2014-03-14T20:09:20Zen
dc.date.issued2001-04-09en
dc.date.rdate2002-04-16en
dc.date.sdate2001-04-11en
dc.description.abstractThis dissertation examines debt ratios, profitability, and commercial activity of the following hospitals: (i) for-profit hospitals [FP hospitals], (ii) nonprofit hospitals engaging in joint ventures [JV NP hospitals], and (iii) nonprofit hospitals that do not engage in joint ventures [Non-JV NP hospitals]. Financial variables are measured using Form 990 tax return data of nonprofit hospitals and audited financial statements of for-profit hospitals. The purpose of the study is to compare: (1) JV NP hospitals versus FP hospitals and (2) JV NP hospitals versus Non-JV NP hospitals. Potential similarities between FP and JV NP hospitals may indicate nonprofit partners are becoming indistinguishable from for-profit entities, which may further call into question the applicability of tax-exempt status for these nonprofit hospitals. Results indicate significant differences exist in debt ratios between FP and JV NP hospitals. A lack of significant differences in profitability lends support to the argument that JV NP hospitals may exhibit similarities in financial characteristics to for-profit hospitals. Regarding comparisons within the nonprofit sector, significant differences were found in profitability and unrelated business income percentages. Differences in debt ratios were not found between the two groups - which fail to support Internal Revenue Service (IRS) arguments that there is something 'special' about JV NP hospitals. JV NP hospitals reported lower profitability on all measures than Non-JV NP hospitals. Findings of lower profitability are consistent with arguments that JV NP hospitals are attempting to improve their financial condition by partnering with for-profit hospitals. Significant differences were not found in contributions received as a percentage of total revenue between the nonprofit hospital groups. This dissertation contributes to existing literature that compares nonprofit and for-profit hospitals through reliance on tax return data of nonprofit hospitals. Tax returns serve as a primary source for the public and IRS to scrutinize a nonprofit organization's financial operations. The IRS uses tax return data to evaluate a hospital's activities, measure its charitable activities and scrutinize the organizations' tax-exempt status. Investigating these differences using actual tax return data provides support to the argument that nonprofit hospitals engaging in joint ventures exhibit similarities to for-profit hospitals.en
dc.description.degreePh. D.en
dc.identifier.otheretd-04112001-214524en
dc.identifier.sourceurlhttp://scholar.lib.vt.edu/theses/available/etd-04112001-214524/en
dc.identifier.urihttp://hdl.handle.net/10919/26766en
dc.publisherVirginia Techen
dc.relation.haspartpcsmith-4-09.PDFen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjectFor-Profiten
dc.subjectJoint Ventureen
dc.subjectHospitalsen
dc.subjectNonprofiten
dc.titleAn Empirical Investigation of Joint Ventures Between For-Profit and Tax-Exempt Nonprofit Hospitalsen
dc.typeDissertationen
thesis.degree.disciplineAccounting and Information Systemsen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.namePh. D.en

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