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A hospital's outputs as a function of supply and demand characteristics.

The occupancy rate, the case census of necessary and discretionary patients, and the diagnosis-specific average length of stay in nonprofit hospitals are analyzed as functions of the socioeconomic and demographic characteristics of the population within the hospital's catchment area, the supply and specialty structure of the physician manpower in the area, and the hospital's capacity to provide laborand capital-intensive medical care. The data are taken from a survey of hospitals participating in the Professional Activities Study. A statistical estimating procedure is used that provides maximum-likelihood estimates of coefficients for a measurement model of demandfor inpatient care and a set of structural equations linking that demand to the hospital output measures. The results indicate that different hospital outputs respond to different aspects of the characteristics of the population-at-risk.