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http://dx.doi.org/10.4332/KJHPA.2012.22.1.109

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

Yoon, Young-Gyu (Korea Health Industry Development Institute)
Suh, Won-S. (Dep. of Global Healthcare Management, Gachon University)
Publication Information
Health Policy and Management / v.22, no.1, 2012 , pp. 109-128 More about this Journal
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
Multi-hospital System; Hospital Performance;
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