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Research Details
Cost Reductions or Reputation Enhancements as Motives for Mergers: The Logic of Multihospital Systems, Strategic Management Journal
Abstract
This paper examines two motives for the formation of local multihospital systems: cost reduction and reputation enhancement. Systems may reduce costs by eliminating redundancies and reducing administrative costs. Integration may also lower costs for consumers seeking consistently high qualiiy. We hypothesize that if systems achieve either cost or reputation benefits, then member hospitals will look different from random collections of hospitals. We find that local systems do not appear to have lower costs but do appear to enjoy reputation benefits over nonsystem hospitals. Our findings challenge the assumptions behind popular health reform initiatives.
Type
Article
Author(s)
David Dranove, Mark Shanley
Date Published
1995
Citations
Dranove, David, and Mark Shanley. 1995. Cost Reductions or Reputation Enhancements as Motives for Mergers: The Logic of Multihospital Systems. Strategic Management Journal.(1): 55-74.