Trends in contract management: the hidden evolution in hospital organization

Contract management is an arrangement whereby the day-to-day operation of the hospital is contracted to an outside organization. In the past two decades there has been dramatic growth in the number of hospitals opting for contract management, yet surprisingly little attention has been paid to this phenomenon. Using national data, we report trends and demonstrate that adoption of contracts results in decreases in service offerings more often than increases. Since contract-managed hospitals tend to be located in rural areas, this raises concerns regarding access to care. On the other hand, contract management may allow distressed hospitals to survive.