The Discriminating Characteristics of For-Profit versus Not-For-Profit Freestanding Psychiatric Inpatient Facilities

This study examines the characteristics that discriminate between ownership types among private, freestanding psychiatric inpatient facilities in the United States. Use of data from the Inventory of Mental Health Organizations (NIMH, 1983, 1986), revealed that not-for-profits provide more services and serve more of the underinsured, while for-profits serve the better insured, concentrate primarily on inpatient services, and serve more children, adolescents, and substance abusers. A surplus bed capacity among for-profit psychiatric hospitals is presumed to contribute to lower occupancy rates and less turnover in the for-profit sector. Not-for-profit psychiatric facilities are also found to be more involved in professional training and to be more accessible through emergency services. However, the misclassification test in the discriminant procedure reveals that a significant group of not-for-profit facilities looks more like its for-profit counterpart group than like other not-for-profits. Study findings are interpreted both in terms of debates over the tax-exempt status of not-for-profit hospitals and the potential negative services effects of proprietization