Proprietary hospital chains are now the predominant, and the fastest growing, segment of the for-profit sector of the hospital industry. This paper examines the relationships between the growth patterns of proprietary hospital chains and state-level variations in a number of demographic and economic factors related to health care. Results indicate that increases in the market share of proprietary chains are greatest in states that have the greatest increases in population, per capita income, and insurance coverage and that already have large proprietary market shares of beds. The growth behavior of proprietary chains thus appears to be highly consistent with standard market behavior.