Independent versus system-affiliated hospitals: a comparative analysis of financial performance, cost, and productivity

Abstract

This article analyzes differences in the financial performance, cost, and productivity between system-affiliated and independent hospitals. Data for the study were obtained from the 1981 American Hospital Association (AHA) Annual Survey of Hospitals for the State of Iowa and included 94 nonstate or nonfederal short-term hospitals without long-term care units. An interpretation of the results indicated that system-affiliated hospitals are more profitable, have better access to capital markets, are more effective price setters, and experience higher costs per case which are related to longer lengths of stay and less productive use of plant and equipment in generating revenues.