The theory of the hospital: a review of the models.

This paper presents a survey of the literature on the theory of the hospital. The paper shows that certain methodological difficulties associated with the theory of the firm generally have been transmitted to the analysis of the hospital. It is also argued that structural considerations are of vital importance to the development of the theory of the hospital. Unfortunately such considerations have, with a few exceptions, been ignored in the small number of formal models of the hospital that have been developed. Attention is drawn to the fact that concern should be not only with the market structure within which the hospital operates, but also with the internal structure of the hospital. The survey is developed through the employment of the structure-conduct-performance paradigm, utilized by industrial economics, as a general framework.