Survivorship in the US hospital services industry

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.