This study investigates potential changes in hospital performance after health system entry, while differentiating between hospital technical and cost efficiency and hospital profitability. In the first stage we obtained (bootstrapped) data envelopment analysis (DEA) efficiency scores. Then, genetic matching is used as a novel matching procedure in this context along with a difference-in-difference approach within a panel regression framework. With the genetic matching procedure, independent and health system hospitals are matched along a number of environmental and organizational characteristics. The results show that health system entry increases hospital technical and cost efficiency by between 0.6 and 3.4 % in four alternative post-entry periods, indicating that health system entry has not a transitory but rather a permanent effect on hospital efficiency. Regarding hospital profitability, the results reveal an increase in hospital profitability only 1 year after health system entry, and the estimations suggest that this effect is a transitional phenomenon. Overall, health system entry may serve as an appropriate management instrument for decision makers to increase hospital performance.

Hospitals can influence the emphasis placed on different governance objectives and enhance organizational success by creating boards that are small enough to be effective yet diverse enough to profit from a wide variety of expertise and experience.

Active strategy-setting by a governing board may generally improve hospital performance. Diverse members of governing boards should be involved in strategy-setting for hospitals. However, high board-management collaboration quality may be compromised if managerial autonomy is too highly restricted. Consequently, hospitals should support board-management collaboration about empowered contrasting board roles.

Horizontal cooperation is generally more effective than vertical cooperation at improving financial performance. Hospital managers should consider the negative interaction effect when making decisions about whether to recommend a cooperative relationship in a horizontal or vertical direction. In addition, managers should be aware of the limited financial benefit of cooperation behavior.