Diversification behavior of multihospital systems: patterns of change, 1983-1985.

Studies of diversification in the health care sector have typically focused on hospital-level activity. Little attention has been given to the broader organizational context in which many hospitals operate (multihospital systems, parent holding companies). This article empirically examines diversification behavior of 100 multihospital systems between 1983 and 1985 in order to assess how systems respond to resource constraints, uncertainty, and competitive pressures on inpatient care. Patterns of diversification are identified, and their implications for systems strategic behavior are discussed.