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KMID : 0387320120220010109
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Korean Journal of Health Policy and Administration
2012 Volume.22 No. 1 p.109 ~ p.128
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The Financial Performance of Hospitals Belonging to Multi-hospital System : A Comparative Study
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Yoon Young-Gyu
Suh Won-Sik
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Abstract
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The purpose of this study is to analyze the performance difference between multi-hospitals and free-standing hospitals. Scholars in industrial economics argue that, due to economies of scale and integration, multi-hospital system may have a better performance compared to freestanding hospitals. The study overturned the hypothesis based on a theory. By analyzing 425 acute-care hospitals in Korea, this research shows that multi-hospital systems and market factors, which have been perceived to be strengths to hospitals, are negatively related to hospitals’ financial performance. Specifically, the results showed a better performance of freestanding hospitals compared to multi-hospital systems. Higher labor and administrative cost by multi-hospital system may be the reason for the difference, and it means they are not more effective at cost control. Managers in multi-hospital system, therefore, should pay attention on cost-reducing issues to regain managerial efficiency of organizations.
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KEYWORD
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Multi-hospital System, Hospital Performance
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