The financial performance of diversified hospital subsidiaries

Despite its proliferation, we know relatively little about the impact of hospital restructuring to offer new services. This exploratory study examines the relationship between types of services offered and financial performance among separately incorporated subsidiaries of acute care hospitals. We draw data from the subsidiaries of all hospital firms operating in one state (Virginia) that requires reporting by all such firms. Results from multiple regression analyses of 1987 data indicate that units that existed longer, produced health care or related products, or were nonprofit subsidiaries of nonprofit firms tended to be more profitable than the other subsidiaries.