While HMO enrollment is concentrated in a few large firms (see Exhibit 5.11), the hospital market is still largely local and dispersed. Fewer than 20% of all hospital beds were in the 10 largest hospital systems in 2003. However, these figures mask an important market transition over the last decade as independent not-for-profit community hospitals have merged together to form large local hospital systems, often dominating certain urban health care markets.

Notes: The numerator, hospital beds in 10 largest systems, is licensed beds. The denominator, total community hospital beds, is staffed beds. This discrepancy will result in a modest overstatement of the proportion of beds in hospital systems. Excludes the U.S. Department of Veterans Affairs hospital system.

Source: Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2002, May 2002, Exhibit 5.5, p. 52, at http://www.kff.org/insurance/3161-index.cfm, updated with KFF calculations using hospital systems data from Modern Healthcare’s Health Systems Survey (2000 data from personal communication; 2001-2003 data at http://www.modernhealthcare.com/survey.cms), and community hospital beds from the American Hospital Association’s Annual Hospital Survey (2000-2003, Copyright by Health Forum LLC).