The financial performance of hospitals belonging to health networks and systems

G. J. Bazzoli, B. Chan, S. M. Shortell, Thomas D'Aunno

Research output: Contribution to journalArticle

Abstract

The U.S. health industry is experiencing substantial restructuring through ownership consolidation and development of new forms of interorganizational relationships. Using an established taxonomy of health networks and systems, this paper develops and tests four hypotheses related to hospital financial performance. Consistent with our predictions, we find that hospitals in health systems that had unified ownership generally had better financial performance than hospitals in contractually based health networks. Among health network hospitals, those belonging to highly centralized networks had better financial performance than those belonging to more decentralized networks. However, health system hospitals in moderately centralized systems performed better than those in highly centralized systems. Finally, hospitals in networks or systems with little differentiation or centralization experienced the poorest financial performance. These results are consistent with resource dependence, transaction cost economics, and institutional theories of organizational behavior, and provide a conceptual and empirical baseline for future research.

Original languageEnglish (US)
Pages (from-to)234-252
Number of pages19
JournalInquiry
Volume37
Issue number3
StatePublished - 2000

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Health
health
performance
Ownership
health industry
hospital system
organizational behavior
centralization
transaction costs
taxonomy
consolidation
restructuring
Industry
Economics
Costs and Cost Analysis
resources
economics

ASJC Scopus subject areas

  • Nursing(all)
  • Health(social science)
  • Health Professions(all)
  • Health Policy

Cite this

Bazzoli, G. J., Chan, B., Shortell, S. M., & D'Aunno, T. (2000). The financial performance of hospitals belonging to health networks and systems. Inquiry, 37(3), 234-252.

The financial performance of hospitals belonging to health networks and systems. / Bazzoli, G. J.; Chan, B.; Shortell, S. M.; D'Aunno, Thomas.

In: Inquiry, Vol. 37, No. 3, 2000, p. 234-252.

Research output: Contribution to journalArticle

Bazzoli, GJ, Chan, B, Shortell, SM & D'Aunno, T 2000, 'The financial performance of hospitals belonging to health networks and systems', Inquiry, vol. 37, no. 3, pp. 234-252.
Bazzoli, G. J. ; Chan, B. ; Shortell, S. M. ; D'Aunno, Thomas. / The financial performance of hospitals belonging to health networks and systems. In: Inquiry. 2000 ; Vol. 37, No. 3. pp. 234-252.
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