Patterns of hospital growth. The case of profit hospitals.

Abstract

Profit hospitals have declined substantially in number during the twentieth century and in recent years have constituted approximately 10% of all hospitals. Previous research from 1954 through 1971 indicates that profit hospitals are essentially transitory in nature, entering areas of rapid population growth, then closing or converting to nonprofit status when population growth has stabilized and personal income has reached a level sufficient to provide private and public support for nonprofit hospitals. This article extends the period of study from 1971 through 1977 and reveals that population growth has had a negative impact on the market share of profit hospitals over this later period, while income has had no detectable effect. Increases in the market share of profits are associated with prior increases in utilization rates and in insurance coverage by Medicare and commercial firms.