Association for Public Policy Analysis & Management

Nonprofit organizations play a dominant role in delivering healthcare in the United State. Especially in substance abuse treatment delivery, the share of nonprofits is larger and the role of nonprofits is more prominent than other healthcare areas and the role. According to a national survey, about 60% of facilities were nonprofit entities and 70% of nonprofits received government funds. Given a share and public investment, assessing how much nonprofits generate public benefits is a critical policy issue. Serving socially and medically disadvantaged groups is one of the most important missions of nonprofit healthcare organizations. In this respect, offering the adequate level of support services and ancillary services is an important barometer to assess social benefits generated by nonprofits because in addition to substance abuse treatment need, disadvantaged patients have social and psychological needs to be recovered from drug abuse and ancillary services addressing these secondary needs of patients are critical to improve access to and outcomes of treatment. Previous research demonstrated that adding ancillary medical and social services to substance abuse treatment programs substantially improved treatment access and outcomes. For example, comprehensive care or wraparound services addressing the clients’ multiple needs improved functioning and treatment retention and lower relapse rate (Conners, Bradley, Whiteside-Mansell & Crone, 2001; Davidson et al., 2010; Friedmann, et al., 2003; McLellan, Arndt, Metzger, Woody & O'Brlen, 1993).  Using a national survey matched with various data sources about state policy and market conditions, the purpose of this study examines the nonprofit effect on support service provision. Further, the study investigates how government funding, state policy and market conditions influence nonprofits' support service provision. For example, how much does the effect of nonprofit ownership increase under comprehensive state parity law? How characteristics of demand and supply for substance abuse treatment impact nonprofits' support services provision? To answer these questions, the study performed a negative binomial regression model and tested an overall effect of nonprofit ownership and interaction effects between ownership and other contextual factors. The findings of this study will contribute to the growing debate on whether or not nonprofit healthcare organizations generate enough public benefits to compensate for their tax privilege with more broad and fundamental criteria to evaluate sector's contribution to society. The study will also contribute to understanding contextual factors that substantially impact nonprofits' performance in serving the poor and disadvantaged patients.