The effects of ownership and system affiliation on the economic performance of hospitals

Inquiry. Fall 1985;22(3):219-36.


We investigated differences among five types of hospitals, defined by ownership (investor-owned or not-for-profit), system affiliation (system-affiliated or freestanding), and government sponsorship on 24 measures of economic performance. Using multivariate analysis of 1980 Medicare cost report and other data from a national sample of 561 hospitals, we found that investor-owned chain hospitals charged significantly more, and were more profitable, than all other types of hospitals except freestanding for-profits; there were no differences in productive efficiency that could be attributed to ownership or affiliation; the investor-owned hospitals had higher debt-to-asset ratios, less-capital-intensive plants, and greater capital costs as a percentage of operating costs than the not-for-profits; and there were no consistent case-mix differences among the hospitals.

Publication types

  • Comparative Study
  • Research Support, Non-U.S. Gov't

MeSH terms

  • Capital Expenditures
  • Costs and Cost Analysis
  • Diagnosis-Related Groups
  • Efficiency
  • Fees and Charges
  • Financial Audit
  • Financial Management*
  • Financial Management, Hospital*
  • Hospitals, Proprietary / economics
  • Hospitals, Voluntary / economics
  • Multi-Institutional Systems / economics
  • Organizational Affiliation*
  • Ownership*
  • Sampling Studies
  • United States