Hospital performance in multihospital systems: a comparative study of system and independent hospitals

Hospital costs and productivity in multihospital systems versus those of independent hospitals are a major source of debate among health care providers and researchers. Previous studies have shown system hospitals perform better than independent hospitals. The evidence, however, has been limited to only a few nonprofit systems. To help fill this research gap, approximately 100 system hospitals from 14 systems and 4 ownership types are compared with approximately 50 independent hospitals using cost and productivity data from one year. The results show that system hospitals realize both significantly higher cost and higher productivity levels, except for county-owned facilities which have lower costs and insignificantly different productivity levels. Factors that help explain these results are discussed and directions for further research are suggested.