Assessing the financial characteristics of multi-institutional organizations.
The prospective pricing of health services is precipitating greater attention to financial characteristics and greater development of multi-institutional organizations (MIOs). This study compares the financial characteristics of 1,590 MIO hospitals with 2,819 freestanding hospitals by ownership type: church-operated, other not-for-profit, and investor-owned. Using 1981 data from the American Hospital Association, the hospitals' capital structure and profitability are measured using three financial ratios: total assets-to-equity, return on equity, and operating margin. The results indicate both greater leverage and greater profitability among MIO hospitals, particularly in the investor-owned sector. The implications of these findings are discussed relative to financial performance by hospital ownership type in the future.
D002202:Capital Financing; D004465:Economic Competition; D004526:Efficiency; D005376:Financial Management; D006777:Hospitals, Proprietary / Q000191:economics; D006801:Humans; D009096:Multi-Institutional Systems / Q000191:economics* / Q000639:trends; D010067:Ownership; D011445:Prospective Payment System; D013660:Taxes; D014481:United States