Determinants of market share for a hospital's services

Abstract

This study identifies and analyzes factors under a hospital's control that can affect its market share. The study, utilizing the Multiplicative Competitive Interaction model, specifically focuses on determining the market share for each hospital within a geographic area, as opposed to the total demand for hospital services within an area. The results indicate that the effect of the number of physician affiliations on hospital patient share is statistically significant. The article investigates the variables that affect the level of physician affiliation. Besides physician affiliation, hospital location, a PROFILE factor based on a composite of a number of variables, and the proportion of affiliated physicians who are not affiliated elsewhere have a significant impact on each hospital's market share. The variables examined resulted in an R2 = 0.901 for individual hospital patient market share.