The impacts of membership in multi-hospital systems on cost,productivity growth and technical change

We examine whether affiliation in a multi-hospital system contributes to higher rates of total factor productivity (TFP) growth, technological progress and cost efficiency. With a 1996 to 1999 panel of 248 US hospitals (some are private nonprofit (church-related and other nonprofit) and the remaining are public (government, nonfederal)), empirical results indicate that urban system member hospitals experienced higher rates of both TFP growth and technical progress than the rates of TFP growth and technical progress experienced by urban nonsystem hospitals. Rural system member hospitals experienced smaller rates of both TFP decline and technical regress than the rates of TFP decline and technical regress experienced by rural nonsystem hospitals.