The relationship between bed size and profitability in South Carolina hospitals

The purpose of the study is to identify factors affecting hospital profitability and to find the optimal hospital bed size that assures maximum profit. This is a cross-sectional study using survey data obtained from acute care hospitals in South Carolina in 1997. The relationship of hospital profitability and hospital bed size revealed that when bed size increases, hospital profitability increases, decreases, and then increases again. For the patient profit proportion, the turning points in bed size are 238.22 and 560.08. For the total profit proportion, the turning points in bed size are 223.31 and 503.86. The results on the relationship between bed size and hospital profitability indicate that medium-size hospitals have less profitability.     

An analysis of hospital union election activity: 1985-1987--by hospital ownership, size, and system, and employee organization and bargaining-unit size

During the three-year period 1985-1987, there were 238 elections in nongovernmental, short-term hospitals to determine whether or not unions would represent the employees. Unions had a success rate of 47.1 percent, similar to that of earlier years. This study reports these election results by hospital and election characteristics. For hospitals, the analysis includes elections by census region, ownership, bed size, and multi-institutional characteristics. For elections, the analysis includes the nature and type of election, employee organization, and employee bargaining-unit-size characteristics. This study concludes that the number of union elections decline as hospital bed size increases, and the union success rate is curvilinear and higher in both small and very large hospitals; union success declines as bargaining-unit size increases. Investor-owned and nonprofit, religious hospitals that are members of multi-institutional systems have lower union success rates than nonsystem hospitals do in their ownership category. However, unions are much more successful in multi-union and decertification elections compared with single-unit elections and initial recognition elections.     

Admissions for CABG procedure in the elderly: was there a change in access to teaching hospitals after 1997?

The purpose of the study is to identify patient attributes associated with teaching hospital admissions in the elderly for coronary artery bypass graft (CABG), and to determine whether admission patterns in teaching hospitals by vulnerable subgroups of the elderly changed during 1997 to 2001, a period with significant changes in CABG admission patterns and financial situation faced by teaching hospitals. The study sample comprises elderly residents in two states, New York and Pennsylvania, and uses Healthcare Cost and Utilization Project State Inpatient data of the Agency for Health Care Research and Quality. Patient characteristics in major teaching hospitals are compared with those in rest of hospitals in a logistic regression framework using a pre-/postdesign, and controlling for county characteristics and resources, distance to hospitals, and hospital size and volume of procedures. Significant patient characteristics associated with a higher likelihood of admission to teaching hospitals included racial/ethnic minority status, transfer cases, Medicaid and private health maintenance organization insurance. A lower volume of CABG cases and an increased propensity to admit more complex cases characterized the admission patterns in teaching hospitals during 1997 to 2001. Although higher use of teaching hospitals by racial/ethnic minorities persisted, access for Medicaid patients disproportionately declined.     

Strategies for cutting hospital beds: the impact on patient service.

OBJECTIVE: To develop insights on the impact of size, average length of stay, variability, and organization of clinical services on the relationship between occupancy rates and delays for beds. DATA SOURCES: The primary data source was Beth Israel Deaconess Medical Center in Boston. Secondary data were obtained from the United Hospital Fund of New York reflecting data from about 150 hospitals. STUDY DESIGN: Data from Beth Israel Deaconess on discharges and length of stay were analyzed and fit into appropriate queueing models to generate tables and graphs illustrating the relationship between the variables mentioned above and the relationship between occupancy levels and delays. In addition, specific issues of current concern to hospital administrators were analyzed, including the impact of consolidation of clinical services and utilizing hospital beds uniformly across seven days a week rather than five. PRINCIPAL FINDINGS: Using target occupancy levels as the primary determinant of bed capacity is inadequate and may lead to excessive delays for beds. Also, attempts to reduce hospital beds by consolidation of different clinical services into single nursing units may be counterproductive. CONCLUSIONS: More sophisticated methodologies are needed to support decisions that involve bed capacity and organization in order to understand the impact on patient service.     

Medicare inpatient physician charges: an econometric analysis

To control Medicare physician payments, Congress in 1989 established volume performance standards (VPS) that tie future physician fee increases to the growth in expenditures per beneficiary. The VPS risk pool is nationwide, and many observers believe it is too large to affect behavior. VPS could be modified by defining a separate risk pool for inpatient physician services and placing each hospital medical staff at risk for those services. Using a national random sample of 500,000 Medicare admissions, we explore the determinants of medical staff charges and comment on the policy implications. Multivariate analysis shows that charges increase with case mix and bed size but, surprisingly, decrease with the level of teaching activity. The teaching result is explained by the substitution of residents for physicians in these hospitals.     

Japanese hospitals--culture and competition: a study of ten hospitals

Japanese health care is characterized by a pluralistic system with a high degree of private producers. Central government regulates the prices and the financing system. All citizens are covered by a mandatory employment-based health insurance operating on a nonprofit basis. The consumer has a free choice of physician and hospital. A comparison between Japan, Sweden and some other countries shows significant dissimilarities in the length of stay, number of treatments per hospital bed and year and the staffing of hospitals. About 80 per cent of the hospitals and 94 per cent of the clinics are privately owned. The typical private hospital owned by a physician has less than 100 beds In this paper, data collected (1992/93) in an empirical study of Japanese hospitals and their leadership is presented. Also discussed are the hospitals' style of management, tools and strategies for competition and competences—personal and formal skills required of the leadership in the hospital There follows a study of ten hospitals, among which hospital directors and chief physicians were interviewed. Interviews are also made with key persons in the Ministry of Health and Welfare and other organizations in the health care field. The result is also analysed from a cultural perspective—‘what kind of impact does the Japanese culture have on the health care organization?’ and/or ‘what kind of sub-culture is developed in the Japanese hospitals’. Some comparisons are made with Sweden, USA, Canada and Germany. The different roles of the professions in the hospital are included in the study as well as the incentives for different kinds of strategies — specialization, growing in size, investments in new equipment, different kind of ownership and hospitals. Another issue discussed is the attempt to uncover whether there is an implicit distribution of specialities—silent agreements between hospitals, etc.     

Economic regulation and hospital behavior: the effects on medical staff organization and hospital-physician relationships.

New forms of payment, growing competition, the continued evolution of multiunit hospital systems, and associated forces are redefining the fundamental relationship between hospitals and physicians. As part of a larger theory of organizational response to the environment, the effects of these external forces on hospital-medical staff organization were examined using both cross-sectional data and data collected at two points in time. Findings suggest that regulation and competition, at least up to 1982, have had relatively little direct effect on hospital medical staff organization. Rather, changes in medical staff organization are more strongly associated with hospital case mix and with structural characteristics involving membership in a multiunit system, size, ownership, and location. The pervasive effect of case mix and the consistent effect of multiunit system involvement support the need for policymakers to give these factors particular attention in considering how hospitals and their medical staffs might respond to future regulatory and/or competitive approaches.     

Do Robotic Surgical Systems Improve Profit Margins? A Cross-Sectional Analysis of California Hospitals

Background

The aim of this study was to examine the association between ownership of robotic surgical systems and hospital profit margins.

Hospital Size, Complexity, and Formalization

Data on 704 United States short-term general hospitals are sorted into a set of dependent variables indicative of organizational formalism and a number of independent variables separately measuring hospital size (number of beds) and various types of complexity commonly associated with size. A series of regressions are performed on the data to determine whether size alone has significant influence on formal organization. The findings are discussed in terms of the probable relation between hospital complexity and professionalization and the possible relation between professionalization and formal bureaucratic mechanisms in organization control.     

An investigation of institutional characteristics associated with response rates in mail surveys of community hospitals

This paper describes the nature and strength of the relationship between six institutional characteristics of U.S. community hospitals and the rates of response of these hospitals to a nationwide survey conducted by the American Hospital Association (AHA). Furthermore, it demonstrates how one can calculate accurately the relative probability of response of hospitals with various combinations of these characteristics. The six characteristics studied were bed size, teaching status, AHA membership status, location within or without a Standard Metropolitan Statistical Area, investor or other form of ownership, and control by State or local government or by another type of organization.The six characteristics were treated as dichotomous variables throughout most of the analysis. Odds ratios were calculated for each variable as a preliminary measure of the strength of its association with response.The effects of confounding on those odds ratios were controlled for by multiple logistic regression, which estimates the probability of response of hospitals with given characteristics. A logistic odds ratio was calculated for each variable to estimate the independent effect that specified values had on the odds of responding. All variables except status as a teaching or nonteaching hospital were shown to have a significant relationship to response.Hospitals were divided into classes according to probability of response, and the probability of response was compared with actual rates of response in the survey. Both increase at equal rates. Similar results were obtained by applying this method to two other, dissimilar, surveys.This method is generalizable to other surveys and should prove useful to researchers wishing to increase response rates in their surveys of hospitals.     

Regulatory intensity, hospital size and the formalization of medical staff organization in hospitals.

Using a theory of organizational response to regulation, this study examined the effects of regulatory intensity and hospital size on the formalization of medical staff organization in Canadian hospitals. The general hypothesis was that, in provinces with greater regulatory intensity, hospitals would exhibit greater formalization of medical staff, and greater involvement of physicians in hospital governance and management; larger hospitals would have greater formalization of medical staff than smaller hospitals. Data from 574 hospitals indicated that both hospital size and provincial regulatory intensity were important factors predictive of the overall formalization of medical staff organization. Depending upon the provincial location, hospitals have developed different patterns of formalizing their medical staff structures.     

An analysis of hospital costs by cost center, 1971 through 1978.

Hospital cost analyses generally have not used costs broken down by hospital department or function due to the unavailability of appropriate data. The Medicare Cost Reports display direct cost by cost center, and the Health Care Financing Administration (HCFA) funded a project to abstract, edit, and categorize these data from a sample of 457 hospitals into meaningful groups. The author used the resulting data base to analyze trends in hospital costs, with cross tabulations by a hospital's teaching status, type of control, and bed size class, from 1971 through 1978. The author also used this data base to preliminarily assess whether introduction of the Medicare Section 223 reimbursement limits altered cost center growth trends. The study found that the largest cost increases occurred among Ancillary Services. It also found slightly higher than average increases in Inpatient Services (concentrated in Special Care Units), and General Services increased at a below average rate. Outpatient Service costs escalated rapidly in absolute terms but rose much more slowly in per unit terms. The fastest growing cost quantity in the study was Other Ancillary Services, a miscellaneous group encompassing many of the new advanced technology services, which increased at a rate of 24 percent per year between 1973 and 1978. The study found costs per unit of output to be positively associated and bed size across all cost center categories, including General Services, where some evidence of economics of scale might have been expected. The study found no evidence that the Section 223 limits affected cost growth longitudinally, but an understanding of the impact of these limits will require considerably more study.     

To outsource or not to outsource: Examining the effects of outsourcing IT functions on financial performance in hospitals

BACKGROUND: Outsourcing of information technology (IT) functions is a popular strategy with both potential benefits and risks for hospitals. Anecdotal evidence, based on case studies, suggests that outsourcing may be associated with significant cost savings. However, no generalizable evidence exists to support such assertions. PURPOSE: This study examines whether outsourcing IT functions is related to improved financial performance in hospitals. METHODOLOGY: Primary survey data on IT outsourcing behavior were combined with secondary data on hospital financial performance. Regression analyses examined the relationship between outsourcing and various measures of financial performance while controlling for bed size, average patient acuity, geographic location, and overall IT adoption. FINDINGS: Complete data from a total of 83 Florida hospitals were available for analyses. Findings suggest that the decision to outsource IT functions is not related to any of the hospital financial performance measures that were examined. Specifically, outsourcing of IT functions did not correlate with net inpatient revenue, net patient revenue, hospital expenses, total expenses, cash flow ratio, operating margin, or total margin. PRACTICE IMPLICATIONS: In most cases, IT outsourcing is not necessarily a cost-lowering strategy, but instead, a cost-neutral manner in which to accomplish an organizational strategy.     

Length of hospital stay of Medicare patients in the post-prospective-payment-system era

This study examines factors determining hospital length of stay (LOS) for Medicare patients in the post-prospective-payment-system (PPS) era according to type of ownership, geographical region, bed size, and financial performance. The study design includes a number of economic and financial variables. In the empirical findings, the following factors are significant in determining hospital LOS of Medicare patients: hospital size, type of ownership, profitability, teaching status, and competition. Other studies have examined factors influencing length of hospitalization; however, none of these studies investigates the effect on LOS of a change in the type of hospital ownership. Furthermore, this study uses more recent and comprehensive data than in the current literature.     

Hospital characteristics: can an audit be predicted?

Each year Medicare-participant hospitals submit a cost report to the Health Care Financing Administration (HCFA) to settle their reimbursement claims. These reports are subject to audit, and a decision by HCFA to audit can be costly to the auditee. This article uses data from 6,270 cost reports filed in 1986 to explore the factors related to the probability of an audit. Logistic regression equations are estimated to examine how hospital characteristics influence the chance of audit. The results suggest that audit probability can be predicted with reasonable accuracy by a hospital's bed size, ownership type, teaching status, function, proportion of Medicare inpatient days, and geographic location.     

Hospital efficiency and patient satisfaction.

The objective of this study was to investigate the relationship between efficiency and patient satisfaction for a sample of general, acute care hospitals in Ontario, Canada. A measure of patient satisfaction at the hospital level was constructed using data from a province-wide survey of patients in mid-1999. A measure of efficiency was constructed using data from a cost model used by the Ontario Ministry of Health, the primary funder of hospitals in Ontario. In accordance with previous studies, the model also included measures of hospital size, teaching status and rural location. Based on the results of this study, at a 95% confidence level, there does appear to be evidence to suggest that an inverse relationship between hospital efficiency and patient satisfaction exists. However, the magnitude of the effect appears to be small. Hospital size and teaching status also appear to affect satisfaction, with lower satisfaction scores reported among non-teaching and larger hospitals. This study did not find any evidence to suggest that hospital location (rural versus urban) or religious affiliation contributed to reports of patient satisfaction in any way not explained by the other measures included in the study. The findings imply that low patient satisfaction cannot be explained by excessive management concentration on efficiency. Managers should analyse some of the underlying causes of patient dissatisfaction before reconfiguring resources. It may be beneficial in larger hospitals to study the aspects of care that patients have reported they prefer in small hospitals.     

Relationship between hospital structural level and length of stay outliers. Implications for hospital payment systems

BACKGROUND: Hospital structural level has been suggested as a factor that could explain part of the resource use variation left unexplained by diagnosis related groups (DRGs). However, the relationship between hospital structural level and the presence of cases of extreme resource use (outliers) is not known. Some prospective payment systems pay these cases separately. OBJECTIVES: To analyze the relationship between different hospital structural levels, defined according to hospital size, teaching activity and location, and the presence of length of stay (LOS) outliers. RESEARCH DESIGN: A logit model was used to analyze the patient discharge records of the acute care public hospitals' Minimum Data Set in Catalonia (Spain) in 1998. The final population contained 631,096 discharges grouped in 329 adjacent DRGs. MEASURES: LOS outliers were defined as cases with a LOS exceeding the geometric mean plus two standard deviations of all the stays in the same DRG. The 64 public hospitals of the Catalan health system were classified into large urban teaching hospitals, medium-sized teaching and community hospitals, and small community hospitals according to their structural complexity. The model also controlled for patient and health care process characteristics. RESULTS: Outliers accounted for 4.5% of total discharges distributed as follows: large urban teaching hospitals (5.6%), medium-sized teaching and community hospitals (4.6%), small community hospitals (3.6%). The probability of a patient being an outlier was higher in hospitals with greater structural complexity: large urban teaching hospitals (OR = 1.59), medium teaching and community hospitals (OR = 1.30) and small community hospitals (OR = 1). Adjustment through the control variables reduced differences among hospitals: large urban teaching hospitals (OR = 1.32), medium-sized teaching and community hospitals (OR = 1.22), and small community hospitals (OR = 1), but the differences remained significant (P < 0.01). CONCLUSIONS: Hospital structural level influences the presence of outliers even when controlling for patient and process characteristics. Thus, some outliers are due to hospital structural level and are not justified by patient characteristics.     

Problems and prospects of improving hospital care planning in the USSR

The necessity of planning the hospital network (bed capacity and its structure) in combination with social security institutions is validated. Thus, planning of the hospital network should be carried out in combination with social security institutions, the degree of development of other forms of medical services (hospitals at home, day hospitals, curative and diagnostic complexes, etc.) being taken into account. By preliminary estimates the demand for hospital beds is 127 per 10,000, 13 for chronic patients and the elderly in medicosocial facilities, 38.9 in social security institutions. Realization of the principles of differentiated hospital treatment of patients according to the degree of its intensity enables one to use hospital resources more effectively and to raise the quality of inpatient care. It is recommended to differentiate specific investments in hospital construction (25,000-70,000 rubles per a bed) according to the demand in hospital beds at different stages of treatment intensity and hierarchial level of medical care organization. Equal possibilities in the provision of inpatient care for the whole population can be achieved within the framework of unified regional models of the network of health care facilities, based on the standard target approach to the utilization of hospital resources.     

Bed size and system influence on financial structure: a time-series and cross-sectional analysis of California hospitals.

Using California hospitals, this study examines both on a cross-sectional and time-series basis the influence bed size and system affiliation have on financial structure. Specifically, the study classifies these hospitals into eight bed size and system categories ranging from less than 100 bed, free-standing hospitals to over 400 bed, system-affiliated hospitals. Somewhat unexpectedly, the results did show that the total debt ratio for smaller, free-standing hospitals did not differ statistically from larger free-standing and system hospitals. However, smaller system-affiliated hospitals did have higher total and long-term debt ratios than larger, system-affiliated and free-standing hospitals.