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The Effect of Ownership Structure on Financial and Non-Financial Performance of Hospitals
Pervaiz Alam,
Kent State University
Essam Elshafie, University of Texas at Brownsville
David Jarjoura , Ohio State University
ABSTRACT. The purpose of this study is to investigate the effect of ownership structure on the financial performance of hospitals in the State of Washington. We compare three groups of hospitals, classified by ownership structure: government, not-for-profit, and for-profit. Our sample is based on the data from the State of Washington hospitals over the period 1980 to 2003. Using factor analysis we summarize a large number of financial and non-financial performance measures across five dimensions: non-financial performance, profitability, capital structure, fixed assets efficiency, and liquidity. Then we apply linear mixed models analysis to investigate the effect of the ownership type on the factor scores of hospital performance. The results show that the ownership structure is associated with the level of performance, and that there are significant differences in the financial performance among the three groups of hospitals.
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