Diversification Into Non-Inpatient Service Lines Among Community Hospitals in Wisconsin

Community hospitals may be able to increase revenue by diversifying into non-inpatient service lines. A model predicting this kind of diversification has not been developed. Data from community hospitals in Wisconsin was analyzed to explain diversification into non-inpatient service lines. Principal components analysis was applied to the services offered to identify factors. The derived factor scores were analyzed using multiple linear regression. Two distinct noninpatient identities were identified: a vertically integrated acute hospital and a hospital diversified into community-based services. Regression analysis revealed that horizontal integration was related to vertical integration into non-inpatient service lines. Community hospitals belonging to alliances and systems had lower vertical integration scores.