There are several limitations of our study worth noting. This study only investigated the period after the policy change of the BBA in the late 1990s. Ideally, we would like to compare pre and post BBA periods to understand whether hospitals responded differently after this major policy change. However, we lacked several key variables to do this. Second, we used only Virginia data to study the research questions, and the results may not be generalizable to other states. Third, this study used hospital Medicare and Medicaid patient shares as proxy measures for Medicare and Medicaid payment generosity to capture environmental turbulence. Future research should examine how payment changes affect hospital behavior by using more specific measures like actual Medicaid and Medicare hospital reimbursement.