The purpose of this study is to analyze the performance difference between public and private hospitals. It isbelieved that private hospitals may have a better performance compared to public hospitals. The study support thehypothesis. By analyzing 425 acute-care hospitals in Korea, this research shows a less performance of public hospitalscompared to private hospitals. Higher labor and administrative cost by public hospitals may account for thedifference, and it means they are not effective at cost control. Managers in public hospitals, therefore, should payattention on cost-reducing issues to regain managerial efficiency of organizations.