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