Why multihospital systems will continue to grow.

Abstract

The limitations of federal and state spending on health care indicate difficult times are ahead for hospitals. Rising costs are challenging their continued existence. Construction and renovation, for example, are normally not feasible in light of the present economic situation. To meet this financial challenge, Multi-Institutional Arrangements ( MIAs ) are proliferating. This phenomenon, which is particularly prevalent in the Southern United States, seems to be increasing geometrically, principally because many of the officials who operate hospitals see such an affiliation as an answer to their serious fiscal problems. Faced with myriad financial problems resulting from overcommitment , hospital boards are looking for a way out of the quagmire . While the boards do not want to give up control of the hospital to an outside group, they are beginning to realize that it may be the price that must be paid for fiscal solvency (i.e., keeping the hospital open to serve the public). Hospital boards usually are favorably impressed by the promised benefits accruing from association with a MIA.