The Australian political arena echoes with calls for the privatisation of health care institutions, the contracting-out of health care services and the introduction of various marketing strategies into hospital management. These calls are justified by asserting that the market, rather than the public sector, can provide better services, greater productivity and increased efficiency. The National Health Strategy (1991, p 17) provides a good example. Noting that Australia is copying American investment trends for hospital ‘chains’ rather than for independent small establishments, the strategy dismisses any concern over changes in ownership, pointing instead to a ‘process of rationalisation’ that is to be ‘welcomed’. Using evidence from the United States, United Kingdom and Australian hospital sectors, this paper examines claims for the greater efficiency of market processes.