Market forces and organizational evolution at freestanding children's hospitals in the United States

To describe market forces that affect freestanding children's hospitals, to describe the development of formal business relationships among these hospitals and pediatricians and other health care delivery organizations, and to explore the impact of such changes on the roles and missions of these hospitals.

All freestanding children's hospitals in the United States in 1991 were identified (n = 44). A survey was mailed to the chief executive officer of each hospital. Data were collected for the period of 1991 through 1996. Twenty-nine of the 44 hospitals surveyed responded.

Twenty-seven (93.1%) of the 29 hospitals reported an increase in competition and a more advanced stage of market evolution. Twenty-five hospitals (86.2%) developed at least one type of business relationship with pediatricians or another health care organization. Twenty-one (72.4%) developed a network of pediatricians. Seventeen (58.6%) developed a relationship with an adult-focused health care organization. There were no significant differences in teaching, research, or charity care activities between those respondents that developed a pediatric network and those that did not or between those respondents that integrated with adult-focused health care organization and those that did not.

Nearly all freestanding children's hospitals developed new business relationships with physicians and other health care organizations. These new relationships were not associated with any significant changes in teaching, research, or charity care.