A profile of U.S. hospital mergers

According to Modern Healthcare's Annual Report on Mergers and Acquisitions the number of hospital mergers has declined significantly since the Balanced Budget Act of 1997. This study evaluated market characteristics, organizational factors and the operational performance of these hospitals prior to merger. We found that merged hospitals were more likely to be located in markets with higher per capital income and higher HMO penetration. Merged hospitals were larger in size and had greater clinical complexity as measured by increased services. Finally, we found that merged hospitals had higher occupancy rates, lower return on assets (ROA), and older facilities. From a managerial perspective, merged hospitals display many of the characteristics of an organization in financial distress. From a policy standpoint, the decline in hospital mergers subsequent to the Balanced Budget Act of 1997 may affect the long-term survivability of many U.S. hospitals.     

The determinants of hospital profitability

Although numerous studies related to hospital costs and financial condition have been conducted, no studies have specifically attempted to identify the underlying determinants of hospital profitability. If these factors are identified, hospital executives can focus their efforts on those aspects of operations that most affect profitability, and public policymakers can gain insights into the potential effects of alternative policy decisions on hospital financial viability. Our study uses multiple regression analysis with 22 hypothesized profitability determinants as independent variables and five profitability measures as dependent variables. The data set consists of 1989 data from 169 investor-owned and private not-for-profit general acute care hospitals in the state of Florida. The results provide evidence that selected managerial and patient-mix variables are predictors of profitability. Structural factors that are beyond the control of managers (organizational and community characteristics) appear to be less important in influencing profitability. These findings may be viewed positively by hospital executives since it appears profitability is not dictated by organizational or market factors but more strongly influenced by factors that, to some extent, can be influenced by hospital policies and practices.     

An analysis of the adoption of managerial innovation: cost accounting systems in hospitals.

The adoption of new medical technologies has received significant attention in the hospital industry, in part, because of its observed relation to hospital cost increases. However, few comprehensive studies exist regarding the adoption of non-medical technologies in the hospital setting. This paper develops and tests a model of the adoption of a managerial innovation, new to the hospital industry, that of cost accounting systems based upon standard costs. The conceptual model hypothesizes that four organizational context factors (size, complexity, ownership and slack resources) and two environmental factors (payor mix and interorganizational dependency) influence hospital adoption of cost accounting systems. Based on responses to a mail survey of hospitals in the Chicago area and AHA annual survey information for 1986, a sample of 92 hospitals was analyzed. Greater hospital size, complexity, slack resources, and interorganizational dependency all were associated with adoption. Payor mix had no significant influence and the hospital ownership variables had a mixed influence. The logistic regression model was significant overall and explained over 15% of the variance in the adoption decision.     

Environmental and Organizational Factors Associated with Hospital Use of GPO Services

Abstract

Given the potential benefits of Group Purchasing Organizations in cost-containment efforts for hospitals on supplies and purchased services, an important question that remains unanswered is what conditions support or hinder the utilization of GPOs by hospitals. Therefore, this study explores the relationship between GPO use by hospitals and their market and organizational characteristics. Data on hospital GPO utilization and other organizational characteristics were combined with secondary hospital market characteristics. Panel logistic regression with random effects and state and year fixed effects analysis was used to examine the relationship between hospitals’ utilization of GPO services and hospitals’ organizational and market characteristics. Overall, the majority of hospitals utilized the services of GPOs. Specifically, the number of hospitals utilizing the services of GPOs increased slightly from 3290 (72.2%) in 2004 to 3337 (74.4%) in 2013. In regression analyses, hospitals utilizing the services of GPOs operated in an external environment with mixed levels of munificence, more dynamism, and less competition. Specifically, hospitals operating in a less munificent environment are more likely to utilize the services of GPOs. The study findings provide organizational decision-makers and policymakers’ insights into how certain market and organizational factors influence hospital strategy choice, in this case, the use of GPOs.     

The role of organizational factors in the adoption of healthcare information technology in Florida hospitals

This study examines whether specific organizational characteristics, such as hospital size, geographic location (urban versus rural), system membership (stand-alone versus system-affiliated), and tax status (for-profit versus non-profit), influence adoption of healthcare information technologies (HIT) in hospitals. We hypothesize the above organizational characteristics to be related to hospitals’ adoption of clinical, administrative, and strategic HIT, as well as all HIT in general. Using survey data collected from 98 Florida hospitals, we demonstrate that hospital size, system membership, and tax status, but not geographic location, are systematically related to HIT adoption, and that such factors explain about 28–41% of the adoption variance. A mixed pattern of effects emerge for clinical, administrative, and strategic HIT. For instance, hospital size appears to be less relevant for administrative HIT, where its effect is compensated by those of system membership and tax status. Implications for future HIT research and practice are discussed.     

Information Technologies in Florida's Rural Hospitals: Does System Affiliation Matter?

CONTEXT: The recent explosive growth of information technology in hospitals promises to improve hospital and patient outcomes. Financial barriers may cause rural hospitals to lag in adoption of information technology, however, formal studies that examine rural hospital adoption of information technology are lacking. PURPOSE: To determine the extent to which rural Florida hospitals utilize clinical and other information technology applications, to identify related information technology issues and barriers, and to explore differences between stand-alone and system-affiliated hospitals. METHODS: Chief information officers in rural Florida hospitals were surveyed from June 2003-October 2003. A comprehensive set of questions assessed hospital demographics, information technology priorities and barriers, clinical and other information technology systems, and staffing needs. FINDINGS: In rural Florida, current information technology priorities included upgrading security on information technology systems to meet Health Insurance Portability and Accountability Act requirements (53.6%), implementing technology to reduce medical errors and to promote patient safety (50.0%), and implementing wireless systems (46.4%). With respect to current information technology adoption, system-affiliated rural hospitals were statistically more likely than their stand-alone counterparts to have laboratory information systems (93% vs 39%), pharmacy (87% vs 46%), pharmacy dispensing (53% vs 8%), chart deficiency (60% vs 15%), and order communication results (60% vs 23%). Financial barriers to successful information technology implementation were noted by 69% of stand-alone and 20% of system-affiliated rural hospitals. CONCLUSIONS: Although top information technology priorities are similar for all rural hospitals examined, differences exist between system-affiliated and stand-alone hospitals in adoption of specific information technology applications and with barriers to information technology adoption.     

Factors influencing electronic clinical information exchange in small medical group practices

Purpose: The purpose of this study was to identify the organizational factors that influence electronic health information exchange (HIE) by medical group practices in rural areas. Methods: A purposive sample of 8 small medical group practices in 3 experimental HIE regions were interviewed to determine the extent of clinical information exchange with other health care providers and to identify the factors influencing those patterns. Findings: HIE was found to be largely limited to exchanging immunization data through the state health department and exchanging clinical information within owned provider systems. None of the clinics directly exchange clinical information with non‐owned clinics or hospitals. Conclusions: While regional HIE networks may be a laudable goal, progress is slow and significant technical, political, and financial obstacles remain. Limiting factors include data protection concerns, competition among providers, costs, and lack of compatible electronic health record (EHR) systems.     

Measuring the cost impact of hospital information systems: 1987–1994

This study measures the impact of information technology (IT) use on hospital operating costs during the late 1980s and early 1990s. Using a proprietary eight-year panel dataset (1987–1994) that catalogues application-level automation for the complete census of the 3000 U.S. hospitals with more than 100 beds, this study finds that both financial/administrative and clinical IT systems at the most thoroughly automated hospitals are associated with declining costs three and five years after adoption. At the application level, declining costs are associated with the adoption of some of the newest technologies, including systems designed for cost management, the administration of managed care contracts, and for both financial and clinical decision support. The association of cost declines with lagged IT as well as the cost patterns at the less automated hospitals both provide some evidence of learning effects.     

The strategic behavior of U.S. rural hospitals: a longitudinal and path model examination

This article explores the relationships among rural hospital strategic behavior (market power and cost control strategies), environmental and organizational characteristics, and the influence these have on the financial performance of rural hospitals in the United States. The study finds that only market power strategies and organizational characteristics (ownership and size) exhibit significant impacts on rural hospital financial performance.     

Hospital board effectiveness: relationships between governing board composition and hospital financial viability.

OBJECTIVE. Two theories--agency and managerialism--are compared with respect to their usefulness in explaining the role of insiders on the hospital board: whether their participation enhances or impairs board financial decision making. DATA SOURCES/STUDY SETTING. The study used 1985 hospital financial and governing board data for a representative sample of acute care California hospitals. STUDY DESIGN. Relationships were examined cross-sectionally between the presence or absence of insiders on the board and measures of hospital financial viability while controlling for the organizational factors of system affiliation, ownership, size, region, and corporate restructuring. PRINCIPAL FINDINGS. Multiple regression analysis found significant relationships between insider (CEO, medical staff) participation and hospital viability. CONCLUSIONS. These results support the managerial theory of governance by suggesting that the CEO and medical staff provide informational advantages to the hospital governing board. However, the cross-sectional design points to the need for future longitudinal studies in order to sequence these relationships between insider participation and improved hospital viability.     

The paradox of the not-for-profit hospital

This quantitative research study assesses the organizational characteristics, market factors, and performance of not-for-profit hospitals in the United States. These results have managerial implications related to hospital efficiency, organizational performance, and the role of not-for-profit hospitals within local communities. The study has policy implications on access to clinical services within local communities, the availability of charity care, and the long-term viability of the not-for-profit health care industry due to potential bankruptcy and closure. This study clearly demonstrates that not-for-profit hospital managers are faced with declining profitability and are challenged to reduce hospital-operating expenses while meeting their charitable mission. Additionally, the greater size and increased clinical complexity of not-for-profit hospitals are increasing organizational overhead. In many cases, the increased clinical complexity is a commitment to the organizational mission of providing a full range of services to the community. From a policy perspective, the study suggests that not-for-profit hospitals have aging facilities and reduced cash flow due to lower profit margins. As a result, many not-for-profit hospitals face potential bankruptcy and closure. This study clearly documents a threat to the provision of charity care in local communities and the long-term viability of the not-for-profit health care industry in the United States.     

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.     

Does quality improvement implementation affect hospital quality of care?

The authors examined how the association between quality improvement (QI) implementation in hospitals and hospital clinical quality is moderated by hospital organizational and environmental context. The authors used Ordinary Least Squares regression analysis of 1,784 community hospitals to model seven quality indicators as a function of four measures of QI implementation and a variety of control variables. They found that forces that are external and internal to the hospital condition the impact of particular QI activities on quality indicators: specifically data use, statistical tool use, and organizational emphasis on Continuous Quality Improvement (CQI). Results supported the proposition that QI implementation is unlikely to improve quality of care in hospital settings without a commensurate fit with the financial, strategic, and market imperatives faced by the hospital.     

News Letter

The authors examined how the association between quality improvement (QI) implementation in hospitals and hospital clinical quality is moderated by hospital organizational and environmental context. The authors used Ordinary Least Squares regression analysis of 1,784 community hospitals to model seven quality indicators as a function of four measures of QI implementation and a variety of control variables. They found that forces that are external and internal to the hospital condition the impact of particular QI activities on quality indicators: specifically data use, statistical tool use, and organizational emphasis on Continuous Quality Improvement (CQI). Results supported the proposition that QI implementation is unlikely to improve quality of care in hospital settings without a commensurate fit with the financial, strategic, and market imperatives faced by the hospital.     

武汉市医院信息化建设现况调查

目的了解武汉市医院信息化建设状况,为科学合理制订武汉市医院信息化建设规划提供依据。方法按医院类型分层随机抽取52家医院,通过问卷调查和访谈收集医院信息化建设基本数据。结果武汉卫生信息化发展很快,各医院都加大资金建设和改善卫生信息系统,大约91%的医院建立了医院信息化系统,信息化建设资金投入占年均销售额比例平均为0.54%,71.43%的医院设置了专门的信息化部门。但是,医院信息化子系统的应用情况参差不齐,部分医院负责人尚未认识到医院信息化的重要性。结论国家应加强信息化工作的管理和指导,专业机构应制定相应的信息化标准规范和建设规划,医院领导应重视医院信息化建设,加大信息化建设的资金投入,加强人才队伍建设。     

The effect of payer mix on the adoption of information technologies by hospitals

BACKGROUND: Numerous studies have examined the relationship between organization characteristics and hospital adoption of information technology (IT). However, no known study has examined whether patient characteristics of those treated at a given hospital influences the decision to adopt IT. PURPOSE: The present study combines primary and secondary data to examine the effect of payer mix (the combination of payers that make up a given hospital's patient discharges) on IT adoption in hospitals. METHODS: Survey data from Florida hospitals were combined with the state's hospital discharge database. Multiple regression analyses were used to analyze the data. RESULTS: When examining Medicare, Medicaid, traditional commercial insurance, and managed-care plans, only an increase of managed-care patients, as a percentage of hospital discharges, was associated with a significant increased likelihood to adopt clinical and administrative IT applications by hospitals. PRACTICE IMPLICATIONS: Our results suggest that increasing cost pressures associated with managed-care environments are driving hospitals' adoption of clinical and administrative IT systems as such adoption is expected to improve hospital efficiency and lower costs. Given that such cost pressures are also emergent in Medicare, Medicaid, and traditional third-party payment environments, an opportunity exists for these parties to motivate hospital IT adoption as a means for cost reduction.     

IC卡医疗设备管理系统及其应用

HIS系统的升级换代存在着巨大的市场商机。对于大型医院来说，以医院管理为中心的HIS的建设已经告一段藩。目前大型医院已进入以病人为中心的临床信息建设阶段，一些基础较好的医院已经逐渐开始了PACS、LIS、医生工作站甚至电子化处理了，IC卡的管理系统响应时代的要求而产生。     

A comparison of systemwide and hospital-specific performance measurement tools

Balanced scorecards are being implemented at the system and organizational levels to help managers link their organizational strategies with performance data to better manage their healthcare systems. Prior to this study, hospitals in Ontario, Canada, received two editions of the system-level scorecard (SLS)--a framework, based on the original balanced scorecard, that includes four quadrants: system integration and management innovation (learning and growth), clinical utilization and outcomes (internal processes), patient satisfaction (customer), and financial performance and condition (financial). This study examines the uptake of the SLS framework and indicators into institution-specific scorecards for 22 acute care institutions and 2 non-acute-care institutions. This study found that larger (teaching and community) hospitals were significantly more likely to use the SLS framework to report performance data than did small hospitals (p < 0.0049 and 0.0507) and that teaching hospitals used the framework significantly more than community hospitals did (p < 0.0529). The majority of hospitals in this study used at least one indicator from the SLS in their own scorecards. However, all hospitals in the study incorporated indicators that required data collection and analysis beyond the SLS framework. The study findings suggest that SLS may assist hospitals in developing institution-specific scorecards for hospital management and that the balanced scorecard model can be modified to meet the needs of a variety of hospitals. Based on the insight from this study and other activities that explore top priorities for hospital management, the issues related to efficiency and human resources should be further examined using SLSs.     

Rural hospital administrators and strategic management activities

This study examines the association of characteristics of rural hospital administrators and the adoption of seven strategic activities in a national sample of 797 U.S. rural hospitals during the period 1983-1988. Based on the premise that managerial activities can affect organizational change, we test five hypotheses relating head administrator characteristics to strategic adaptation, controlling for environment-market and hospital-related variables. Bivariate analysis of the strategic adoption showed a positive association with administrative turnover and a negative association with head administrator age. Multivariate logistic regression showed that only high levels of turnover were associated with strategic activities, net of control variables. The implications of these findings and the lack of predictive power of other rural hospital administrator characteristics--especially affiliation with the American College of Healthcare Executives--are discussed within the context of a "strategic management policy" for rural hospitals.