# Mission vs. Margin: The Effects of Catholic Health System Ownership on Hospital Operations

## TL;DR

This study examines how Catholic ownership affects hospital operations, finding that Catholic hospitals offer more mission-based services but face similar cost-cutting pressures as other hospitals.

## Contribution

The study provides empirical evidence on the operational effects of Catholic health system ownership using a difference-in-differences approach.

## Key findings

- Catholic-acquired hospitals increased chaplaincy and charity care services compared to non-Catholic and control hospitals.
- Non-Catholic-acquired hospitals were more likely to discontinue obstetrics units after acquisition.
- Both Catholic and non-Catholic-acquired hospitals reduced operating expenses and employment similarly to the control group.

## Abstract

The number of Catholic hospitals grew by 28% between 2001 and 2020, and today almost one-fifth of U.S. nonprofit hospitals are Catholic. Catholic systems face conflicting institutional pressures to provide mission-oriented services while remaining financially competitive. Using 2009–2022 data from the American Hospital Association (n = 33,552 hospital-years), we applied difference-in-differences methods to compare changes in hospital operations after acquisition by Catholic and non-Catholic systems relative to the control group of never-acquired hospitals. Catholic-acquired hospitals were more likely to offer some mission-oriented services, including chaplaincy and charity care (average treatment effect on the treated, ATT, 10.41 percentage-point [pp] and 3.97 pp, respectively), while non-Catholic-acquired hospitals were less likely to operate an obstetrics unit (ATT −3.45 pp) after acquisition relative to the control group. Hospitals experienced similar cost-cutting measures after acquisition relative to the control group, including reduced operating expenses and employment, regardless of system ownership type. Our findings provide rigorous empirical evidence to inform ongoing policy debates regarding the expansion of Catholic health care.