New Evidence on the Performance Advantages of Multihospital Systems

New Evidence on the Performance Advantages of Multihospital Systems This study analyzes the performance effects of proprietary, multihospital systems. It is shown that the organizational structure of these systems may affect the operating costs of member hospitals. Estimating a cost function for Florida hospitals and controlling for other factors, the average costs of HUMANA hospitals are empirically about 17 percent lower, while the costs of other leading chains are about 12 percent lower than not-for-profit institutions. These results contrast with earlier studies that found no such differences. Furthermore, the cost differential that exists between system and non-system hospitals can be largely attributed to technical efficiencies arising from chain ownership. Review of Industrial Organization Springer Journals

New Evidence on the Performance Advantages of Multihospital Systems

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Kluwer Academic Publishers
Copyright © 1997 by Kluwer Academic Publishers
Economics; Industrial Organization; Microeconomics
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