Study data are drawn from several databases. First, we obtained hospital financial data from the Virginia Health Information (VHI) hospital database. This data set includes standard data from financial income statements for all Virginia hospitals. It is a mandatory reporting system in Virginia and is collected and maintained by the VHI, which is a nonprofit organization under contract with the State of Virginia. Second, the American Hospital Association (AHA) annual survey contains hospital structural data, such as ownership, bed size, hospital services, and utilization. Third, the Area Resource File, compiled by the Bureau of Health Professions, has extensive in- formation on hospital market structure, community demographics, and socioeconomic attributes. Finally, the Center for Medicare and Medicaid Services provides data on hospital Medicare case mix, and Inter Study provides data on HMO enrollment, which is used to compute HMO market share.