Document Type



This research examines whether for-profit status or system membership is significantly related to the financial performance of hospitals. Panel data containing 573 observations of Florida hospitals for 1984 through 1987 are used in a fixed-effects regression model. The results indicate that it is system membership rather than forprofit status that is significantly related to better financial performance. For-profit status is unrelated to overall financial performance. System hospitals have higher revenues per admission, but not higher expenditures per admission than independent hospitals. The findings are consistent with the hypothesis that expanding hospital systems target locations and services that are potentially profitable.



Publication Date



The author is grateful to J. Rubin and L. Russell for comments and Lisa Parochniak for research assistance.

Original Citation

"The Effects of For-Profit Status and System membership on the Financial Performance of Hospitals" Applied Economics, Vol. 34, No. 4, 2002, 479-489.


Department of Economics

Legacy Department

Department of Economics


Support from the Rutgers University Research Council and NIMH Grant No. 43450-01 is gratefully acknowledged.




Taylor & Francis


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