The modern hospital is at once the site of healing, the locus of medical learning and a cornerstone of the welfare state. Its technological and infrastructural costs have transformed health services into one of today's fastest growing sectors, absorbing substantial proportions of national income...

Our study examines the impact of the capital prospective payment system (CPPS), implemented by Medicare in 1991, on capital expenditures and cost-effective behavior of non-proprietary hospitals. As noted in the paper, we use audited financial statement data for a large national sample of...