Capital Investment by Independent and System-Affiliated Hospitals.
Capital expenditures are a critical part of hospitals' efforts to maintain quality of patient care and financial stability. Over the past 20 years, finding capital to fund these expenditures has become increasingly challenging for hospitals, particularly independent hospitals. Independent hospitals struggling to find ways to fund necessary capital investment are often advised that their best strategy is to join a multi-hospital system. There is scant empirical evidence to support the idea that system membership improves independent hospitals' ability to make capital expenditures. Using data from the American Hospital Association and Medicare Cost Reports, we use difference-in-difference methods to examine changes in capital expenditures for independent hospitals that joined multi-hospital systems between 1997 and 2008. We find that in the first 5 years after acquisition, capital expenditures increase by an average of almost $16,000 per bed annually, as compared with non-acquired hospitals. In later years, the difference in capital expenditure is smaller and not statistically significant. Our results do not suggest that increases in capital expenditures vary by asset age or the size of the acquiring system.
['Carroll|Nathan W|NW|', 'Smith|Dean G|DG|', 'Wheeler|John R C|JR|']
D002202:Capital Financing D016208:Databases, Factual D005377:Financial Management, Hospital D016304:Hospitals, Private D017059:Models, Econometric D009096:Multi-Institutional Systems D014481:United States
capital investment capital access health finance hospital system