title: Hospital diversification.
abstract: Hospital diversification and its impact on the operating ratio are studied for 168 hospitals during the period from 1999 to 2004. Diversification and the operating ratio are modeled in a two-stage least squares (TSLS) framework as being jointly dependent. Institutional diversification is found to yield a better financial position, and the better operating ratio allows the institution the wherewithal to diversify. The impact of external government planning and hospital competition are also measured. An institution lifecycle hypothesis is advanced to explain hospital behavior: boom and bust, diversification and divestiture, occasionally leading to closure or merger. Management's attitude concerning risk and reward is considered.
authors.affiliation: Department of Health Services Management and Leadership at George Washington University, Washington, DC, USA.
authors.forename: Steven R
authors.initials: SR
authors.lastname: Eastaugh
mesh_terms: D000720:Ancillary Services, Hospital / Q000706:statistics & numerical data*; D004465:Economic Competition / Q000191:economics / Q000458:organization & administration; D004469:Economics, Hospital; D006739:Hospital Administration; D008389:Marketing of Health Services; D008962:Models, Theoretical; D014481:United States