Grants and cost shifting in outpatient clinics

Cost shifting for a non-profit, revenue maximizing healthcare provider which faces a constraint that profit must be non-negative is examined, focusing on fixed payment programmes like Medicare. In addition, how grant money affects cost shifting and extend the empirical analysis of cost shifting to outpatient clinics, using data from publicly funded clinics in California is explored. The results are consistent with cost shifting, and indicate that the cause may be that the Medicare payment system cuts revenues more than costs, forcing clinics to subsidize the care of Medicare patients by increasing prices to other patients.