Clustered and distinct: a taxonomy of local multihospital systems

Abstract Despite their prevalence and power in markets throughout the United States, local multihospital systems (LMSs)—also referred to as hospital-based “clusters”—remain an understudied organizational form, with studies instead primarily focusing either upon individual hospitals or viewing hospital systems collectively without distinguishing the local “sub-systems” that comprise larger regional or national hospital chains. To better understand these organizational forms, we develop a taxonomy specifically devoted to LMSs, applying taxonomic analysis methods to a sample of LMSs in six U.S. states while accounting for LMSs’ geographic arrangements and non-hospital-based service locations. Our analysis identifies five distinct LMS categories, with forms clearly distinguished according to their varying degrees of differentiation and integration. The study’s results accentuate the importance of accounting for hospital systems’ activities and arrangements in local markets—including their non-hospital-based sites—and highlight differences in systems’ achievement of integration and coordination across services and locations, providing considerations in light of U.S. health system reform as well as international patterns of regional system formation.