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Survivorship in the US hospital services industry


  • Rexford E. Santerre

    (Bentley College, Waltham, MA, USA)

  • Debra Pepper

    (Time Incorporated, Time and Life Building, Rockerfeller Center, New York, NY, USA)


Over the last two decades, changing state and federal regulations and increased price competition have dramatically changed the environment in which hospitals compete. This paper uses observations drawn at 5-year intervals from 1973 to 1993 for each of the 50 states to examine the specific effect of these factors on the size distribution of hospitals. It finds that Certificate of Need (CON) laws and rate review regulations have tended to favor large hospitals. The paper also finds that hospitals have responded to increased payer price sensitivity by seeking a medium bed-size capacity. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • Rexford E. Santerre & Debra Pepper, 2000. "Survivorship in the US hospital services industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 181-189.
  • Handle: RePEc:wly:mgtdec:v:21:y:2000:i:5:p:181-189 DOI: 10.1002/mde.969

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    References listed on IDEAS

    1. Simpson, John, 1995. "A note on entry by small hospitals," Journal of Health Economics, Elsevier, vol. 14(1), pages 107-113, May.
    2. Lee Rivers Mobley & H. E. Frech, 1994. "Firm Growth and Failure in Increasingly Competitive Markets Theory and Application to Hospital Markets," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(1), pages 77-93.
    3. Lanning, Joyce A & Morrisey, Michael A & Ohsfeldt, Robert L, 1991. "Endogenous Hospital Regulation and Its Effects on Hospital and Non-hospital Expenditures," Journal of Regulatory Economics, Springer, vol. 3(2), pages 137-154, June.
    4. Vita, Michael G., 1990. "Exploring hospital production relationships with flexible functional forms," Journal of Health Economics, Elsevier, vol. 9(1), pages 1-21, June.
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    Cited by:

    1. Gary Ferrier & Hervé Leleu & James Moises & Vivian Valdmanis, 2013. "The Focus Efficiency of U.S. Hospitals," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(3), pages 241-263, September.
    2. Laurie J. Bates & Rexford E. Santerre, 2005. "Do Agglomeration Economies Exist in the Hospital Services Industry," Eastern Economic Journal, Eastern Economic Association, vol. 31(4), pages 617-628, Fall.
    3. Gary D. Ferrier & Hervé Leleu & James Moises & Vivian Valdmanis, 2009. "The Size and Service Offering Efficiencies of U.S. Hospitals," Working Papers 2009-ECO-09, IESEG School of Management.

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