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The Financial Performance of Hospitals Belonging to Multi-hospital System : A Comparative Study

네트워크 시스템 병원의 경영성과 : 비교 연구

  • Yoon, Young-Gyu (Korea Health Industry Development Institute) ;
  • Suh, Won-S. (Dep. of Global Healthcare Management, Gachon University)
  • 윤영규 (한국보건산업진흥원) ;
  • 서원식 (가천대학교 글로벌헬스케어경영학과)
  • Received : 2011.10.10
  • Accepted : 2012.03.22
  • Published : 2012.03.31

Abstract

The purpose of this study is to analyze the performance difference between multi-hospitals and free-standing hospitals. Scholars in industrial economics argue that, due to economies of scale and integration, multi-hospital system may have a better performance compared to freestanding hospitals. The study overturned the hypothesis based on a theory. By analyzing 425 acute-care hospitals in Korea, this research shows that multi-hospital systems and market factors, which have been perceived to be strengths to hospitals, are negatively related to hospitals' financial performance. Specifically, the results showed a better performance of freestanding hospitals compared to multi-hospital systems. Higher labor and administrative cost by multi-hospital system may be the reason for the difference, and it means they are not more effective at cost control. Managers in multi-hospital system, therefore, should pay attention on cost-reducing issues to regain managerial efficiency of organizations.

Keywords

References

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