When a Neighbor Closes: Ownership and Hospital Profits

When a Neighbor Closes: Ownership and Hospital Profits | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article When a Neighbor Closes: Ownership and Hospital Profits Salpy Kanimian, Shishir Shakya This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-9408963/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 7 You are reading this latest preprint version Abstract How nearby hospitals adjust financially after a neighboring closure may depend on ownership incentives, yet existing research has not examined this variation by ownership type. Using publicly available cost report data from the National Academy for State Health Policy Hospital Cost Tool for short-term hospitals from 2011 through 2019, this study compares hospitals with exactly two neighbors within sixty miles that experienced a neighboring closure to those retaining two neighbors, ensuring comparable baseline market structure. For-profit hospitals show the largest post-closure increases in charge-to-cost ratios and net profit margins. Nonprofit hospitals show smaller gains, while governmental hospitals show changes indistinguishable from zero, motivating ownership-differentiated policy responses. JEL: I11, I18, L21 Hospital Closures Ownership Types Proximity Hospital Performance Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Under Review Version 1 posted Editorial decision: Revision requested 30 Apr, 2026 Reviews received at journal 28 Apr, 2026 Reviewers agreed at journal 16 Apr, 2026 Reviewers invited by journal 16 Apr, 2026 Editor assigned by journal 15 Apr, 2026 Submission checks completed at journal 15 Apr, 2026 First submitted to journal 13 Apr, 2026 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-9408963","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":626547881,"identity":"15a21b80-05ca-427d-b886-9ad6d974771d","order_by":0,"name":"Salpy Kanimian","email":"","orcid":"","institution":"Rice University","correspondingAuthor":false,"prefix":"","firstName":"Salpy","middleName":"","lastName":"Kanimian","suffix":""},{"id":626547890,"identity":"12389178-d975-4c90-b96f-07235c53e7fb","order_by":1,"name":"Shishir Shakya","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA7ElEQVRIiWNgGAWjYDACCQZmECWHLGZAlBZjMOcARDVxWhIbiNYiP7v5sTFPTV16/+zew58/1PyRY2Bv3iaBT4vBnWPGyTzHDufOuHMuTeLAMQNjBp5jZfi1SCQYH+ZhO5DbcCPHjOEAm0Fig0SOGV4t8jPSPx/m+VeXLn8jx/jDgX8G9Q3yb/BrYQCqTOZtY04wuJFjIHGwzSCBQYIHvxagymLDuX2HDTeC/HK2z9iwjSet2IKAwzZLvPlWJy93u/fwh4pvcvL87Ic33sDrMCBg4gGREjwQHhsh5SDA+ANZyygYBaNgFIwCdAAAclVKy6BH8y0AAAAASUVORK5CYII=","orcid":"","institution":"Appalachian State University","correspondingAuthor":true,"prefix":"","firstName":"Shishir","middleName":"","lastName":"Shakya","suffix":""}],"badges":[],"createdAt":"2026-04-14 00:39:14","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-9408963/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-9408963/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":107706305,"identity":"474331ec-8f63-414a-ab7d-b81101d96e38","added_by":"auto","created_at":"2026-04-24 09:17:52","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":434009,"visible":true,"origin":"","legend":"","description":"","filename":"EEJPaper.pdf","url":"https://assets-eu.researchsquare.com/files/rs-9408963/v1_covered_9a200194-f376-4313-86bc-32ffc6f4f51e.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"When a Neighbor Closes: Ownership and Hospital Profits","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"eastern-economic-journal","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"","sideBox":"Learn more about [Eastern Economic Journal](https://www.palgrave.com/gp/journal/41302)","snPcode":"41302","submissionUrl":"https://submission.springernature.com/new-submission/41302/3","title":"Eastern Economic Journal","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Other/Unknown","inReviewEnabled":true,"inReviewRevisionsEnabled":false},"keywords":"Hospital Closures, Ownership Types, Proximity, Hospital Performance","lastPublishedDoi":"10.21203/rs.3.rs-9408963/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-9408963/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eHow nearby hospitals adjust financially after a neighboring closure may depend on ownership incentives, yet existing research has not examined this variation by ownership type. 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