ABSTRACT
The largest of the proprietary chains, Hospital Corporation of America, owns or manages over 400 institutions. The company has also signed an agreement to purchase a teaching hospital affiliated with the University of Oklahoma. Humana is the second largest hospital company with 90 institutions. National Medical Enterprises owns or operates 90 acute care hospitals and over 350 nursing homes and psychiatric institutions. Proprietary chains have historically grown through horizontal integration, that is, by purchasing large numbers of small general hospitals. Proprietary chains may find that their mode of operation is more capable or selectively enhancing the profitability of selected tertiary care while avoiding or redirecting the costs of less profitable modalities. The proprietary chains started by building up their systems from the accretion of small hospital units in the south and southwest. The for-profit hospital chain has been around since 1968. In that relatively brief time it has grown enormously.
