Governing board structure, business strategy, and performance of acute care hospitals: a contingency perspective.

Contingency theory suggests that for a hospital governing board to be effective in taking on a more active role in strategic management, the board needs to be structured to complement the overall strategy of the organization. A survey study was conducted to examine the strategies of acute care hospitals as related to the structural characteristics of their governing boards. After controlling for organizational size and system membership, results indicated a significant relationship between the governing board structure of 109 acute care hospitals and their overall business strategy. Strategy also accounted for more of the variance in board structure than either organization size or system membership. Finally, the greater the match between board structure and hospital strategy, the stronger the hospitals' financial performance.     

Factors influencing health information system adoption in American hospitals

OBJECTIVES: To study the number of health information systems (HISs), applicable to administrative, clinical, and executive decision support functionalities, adopted by acute care hospitals and to examine how hospital market, organizational, and financial factors influence HIS adoption. METHODS: A cross-sectional analysis was performed with 1441 hospitals selected from metropolitan statistical areas in the United States. Multiple data sources were merged. Six hypotheses were empirically tested by multiple regression analysis. RESULTS: HIS adoption was influenced by the hospital market, organizational, and financial factors. Larger, system-affiliated, and for-profit hospitals with more preferred provider organization contracts are more likely to adopt managerial information systems than their counterparts. Operating revenue is positively associated with HIS adoption. CONCLUSION: The study concludes that hospital organizational and financial factors influence on hospitals' strategic adoption of clinical, administrative, and managerial information systems.     

Adoption of health information technology for medication safety in U.S. Hospitals, 2006

Health information technology (IT) is regarded as an essential tool to improve patient safety, and a range of initiatives to address patient safety are under way. Using data from a comprehensive, national survey from HIMSS Analytics, we analyzed the extent of health IT adoption for medication safety in U.S. hospitals in 2006. Our findings indicate wide variation in health IT adoption by type of technology and geographic location. Hospital size, ownership, teaching status, system membership, payer mix, and accreditation status are associated with health IT adoption, although these relationships differ by type of technology. Hospitals in states with patient safety initiatives have greater adoption rates.     

The adoption of hospital information systems

This paper empirically examines the diffusion of hospital information systems (ISs), specifically, pharmacy, laboratory, and radiology systems. Given the policy significance of health IS and the widespread perception that it's diffusion is slow, a better understanding of the mechanisms driving IS adoption is needed. A novel data set incorporating both IS adoption and hospital characteristics was constructed. These data follow the behavior of 1965 hospitals for the years 1990-2000. Hypotheses pertaining to hospital characteristics, hospital competition, and strategic behavior are tested utilizing proportional hazard models. I find that IS adoption is related to multi-hospital system membership, payer mix, and hospital scale. The role of scale, however, significantly diminishes throughout the time period, likely reflecting improved personal computer performance and improved IT scalability. Conversely, I find little that strategic behavior or hospital competition affects IS adoption. Likewise, hospital ownership does not affect the adoption of these systems. Overall, these results suggest that hospital IS diffusion has not been normatively slow.     

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.     

Health-promoting organization and organizational effectiveness of health promotion in hospitals: a national cross-sectional survey in Taiwan

To assess the organizational health-promotion (HP) status and its effect on the organizational effectiveness of HP in a national cross-sectional survey of all hospitals above the local community hospital level in Taiwan's hospitals, questionnaires were sent to 474 hospitals, of which 162 (34.18%) hospitals returned them and were rendered valid. The results of the organizational HP status reveal that the standardized overall score achieved is 76.26, suggesting that there is considerable room for improvement. The results of correlation analysis partially support the proposition of this study, suggesting that the higher the organizational HP status, the better the self-evaluated overall organizational and administrative effectiveness of its HP. When hierarchical multiple regression was performed, support for ownership (private hospitals), hospital accreditation grades (academic medical centers) and overall score of the Organizational Health of Hospital Assessment Scale were significant predicators of self-evaluated overall organizational effectiveness (F = 11.097, p < 0.01, R(2) = 0.369). Moreover, drafted annually, HP policies and plans and the number of staff HP training activities were found to partially mediate the relation between the organizational HP status, hospital characteristics and self-evaluated overall organizational effectiveness. The results contribute to clarify the conception of health-promoting hospital organizations and to identify a number of dimensions of health-promoting organizations related to the organizational effectiveness of HP in hospitals, which could allow hospitals to establish a healthier organization and more effective HP programs. This study also supplies the research field with important data and insights that can be used in future research.     

Horizontal and Vertical Integration-Diversification in Rural Hospitals: A National Study of Strategic Activity, 1983–1988

Abstract: This study examines both the magnitude of and factors influencing the adoption of 13 horizontal and vertical integration and diversification strategies in a national sample of 797 U.S. rural hospitals during the period 1983–1988. Using organization theory, hypotheses were posed relating environmental and market factors, geographic location, and hospital characteristics to the adoption of horizontal and vertical integration and diversification. Results indicate that only one of 13 strategies was adopted by more than 50 percent of all rural hospitals during the study period, and that most of the directional hypotheses were not confirmed using Cox's proportional hazards models. In particular, environmental and market factors were unrelated to the strategies studied. Issues of methodology and theory are discussed; however, during an historically turbulent period, both relatively low levels of rural hospital strategic activities and lack of predictive power of the theory suggest caution in relying heavily on a policy for rural hospital survival that is dependent on individual market-oriented strategic behavior.     

Geriatric services offered by hospitals: predicting services by internal and external community characteristics.

This article explores the role of hospitals in providing geriatric services and identifies associated community and hospital characteristics. The sample is 4571 community hospitals responding to the 1995 American Hospital Association (AHA) Annual Survey. Most hospitals offer some geriatric services; the mean is 3.3. The dependent variable is an index of 13 geriatric services created from the AHA data. Independent variables are taken from the AHA survey, Area Resource File, and census data. Regression analysis explains fifteen percent of the variance. Hospital characteristics predicting provision of geriatric services are non-profit tax status, hospital bed size and system membership. Community characteristics predicting provision of geriatric services included higher population density, high percentage of county aged, and county nursing facility beds. Hospital characteristics yielded slightly higher predictive ability than did community characteristics. The findings suggest policies to increase hospital leadership in providing access to senior services require a multi-dimensional approach.     

Changes in the structure, composition, and activity of hospital governing boards, 1989-1997: evidence from two national surveys.

Hospital governance arrangements affect institutional policymaking and strategic decisions and can vary by such organizational attributes as ownership type/control, size, and system membership. A comparison of two national surveys shows how hospital governing boards changed in response to organizational and environmental pressures between 1989 and 1997. The magnitude and direction of changes in (1) board structure, composition, and selection; (2) CEO-board relations; and (3) board activity, evaluation, and compensation are examined for the population of hospitals and for different categories of hospitals. The findings suggest that hospital boards are engaging in selective rather than wholesale change to meet the simultaneous demands of a competitive market and traditional institutional orientations to community, the disenfranchised, and philanthropic service. Results also suggest parallel increases in collaboration between boards and CEOs and in board scrutiny of CEOs.     

Changes in the Structure, Composition, and Activity of Hospital Governing Boards, 1989–1997: Evidence from Two National Surveys

Hospital governance arrangements affect institutional policymaking and strategic decisions and can vary by such organizational attributes as ownership type/control, size, and system membership. A comparison of two national surveys shows how hospital governing boards changed in response to organizational and environmental pressures between 1989 and 1997. The magnitude and direction of changes in (1) board structure, composition, and selection; (2) CEO-board relations; and (3) board activity, evaluation, and compensation are examined for the population of hospitals and for different categories of hospitals. The findings suggest that hospital boards are engaging in selective rather than wholesale change to meet the simultaneous demands of a competitive market and traditional institutional orientations to community, the disenfranchised, and philanthropic service. Results also suggest parallel increases in collaboration between boards and CEOs and in board scrutiny of CEOs.     

Organizational and environmental determinants of hospital strategy

This study focuses on the relationship between the business strategy of acute care hospitals and several organizational and environmental characteristics. Business strategy is assessed using the Miles and Snow (1978) typology. The organizational characteristics examined are size, system membership, type of ownership, and case-mix severity. The environmental characteristics examined are those of the local environment, which includes general economic factors and measures of market structure. General economic factors include family income, unemployment rate, percent of population over 65, and ratio of physicians to general population. The measures of market structure include the Herfindahl index and each hospital's individual market share. The results of our analysis using multiple regression indicate that organizational characteristics are more likely than environmental factors to influence the business strategy of hospitals. Specifically, hospitals that are relatively small or operate independently are less likely than other hospitals to follow a proactive strategic orientation.     

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.     

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.     

A national study of the efficiency of hospitals in urban markets.

Using a sample of 3,000 urban hospitals, this article examines the contributions of selected hospital characteristics to variations in hospital technical efficiencies, while it accounts for multiple products and inputs, and controls for local environmental variations. Four hospital characteristics are examined: hospital size, membership in a multihospital system, ownership, and payer mix (managed care contracts, percent Medicare, and percent Medicaid). Ownership and percent Medicare are consistently found to be related significantly to hospital efficiency. Within the ownership variable, government hospitals tend to be more efficient and for-profit hospitals less efficient than other hospitals. Higher percentages of Medicare payment are negatively related to efficiency. While not consistently significant across all five of the MSA size categories in which the analyses are conducted, possession of managed care contracts, membership in a multihospital system, and size all are consistently related positively to hospital technical efficiency. These variables are also all significant when the hospitals are examined in a combined analysis. Percent Medicaid was not significant in any of the analyses. Implications for policy and the need for methodological work are discussed.     

The effect of information technology on hospital performance

While healthcare entities have integrated various forms of health information technology (HIT) into their systems due to claims of increased quality and decreased costs, as well as various incentives, there is little available information about which applications of HIT are actually the most beneficial and efficient. In this study, we aim to assist administrators in understanding the characteristics of top performing hospitals. We utilized data from the Health Information and Management Systems Society and the Center for Medicare and Medicaid to assess 1039 hospitals. Inputs considered were full time equivalents, hospital size, and technology inputs. Technology inputs included personal health records (PHR), electronic medical records (EMRs), computerized physician order entry systems (CPOEs), and electronic access to diagnostic results. Output variables were measures of quality, hospital readmission and mortality rate. The analysis was conducted in a two-stage methodology: Data Envelopment Analysis (DEA) and Automatic Interaction Detector Analysis (AID), decision tree regression (DTreg). Overall, we found that electronic access to diagnostic results systems was the most influential technological characteristics; however organizational characteristics were more important than technological inputs. Hospitals that had the highest levels of quality indicated no excess in the use of technology input, averaging one use of a technology component. This study indicates that prudent consideration of organizational characteristics and technology is needed before investing in innovative programs.     

The impact of health system membership on patient safety initiatives

BACKGROUND: Research in configurations and strategic groups has a rich history of revealing performance differences for hospitals and health care systems. PURPOSES: To assess the relationship between hospital-led health system configurations and the adoption of patient safety practices. In particular, the adoption of computerized physician order entry (CPOE) and intensive care unit physician staffing (IPS) is analyzed. METHODOLOGY: Analysis of variance was used to detect differences in patient safety measures based on health networks and systems' initial configuration clustering, and regression was used to assess group membership, controlling for hospital-level characteristics. The 2002 American Hospital Association survey and the first 3 years of the Leapfrog Group annual survey (2003-2005) are used for the analyses. RESULTS: There were significant differences in CPOE and IPS adoption and implementation levels based on health systems' configurations. Centralized physician/insurance health systems and moderately centralized health systems were the highest configurations in terms of CPOE adoption. Group membership was not positively related to the use of IPS relative to hospitals that are not classified using the taxonomy. In fact, there is a significant and negative adoption rate for both patient safety measures in facilities classified in the independent hospital systems category. CONCLUSION: There are systematic differences in the adoption of CPOE and IPS patient safety measures based on health system configurations. The configuration with an insurance company as part of its structure was more likely than other groups to be adopting CPOE. PRACTITIONER IMPLICATIONS: Given the durability of group membership, the Leapfrog Group and other patient safety initiatives could explicitly target configurations most likely to adopt and implement patient safety programs.     

Hospital financial performance: does IT governance make a difference?

This study examined whether information technology (IT) governance, a term describing the decision authority and reporting structures of the chief information officer (CIO), is related to the financial performance of hospitals. The study was conducted using a combination of primary survey data regarding health care IT adoption and reporting structures of Florida acute care hospitals, with secondary data on hospital financial performance. Multiple regression models were used to evaluate the relationship of the 3 most commonly identified reporting structures. Outcome variables included measures of operating revenue and operating expense. All models controlled for overall IT adoption, ownership, membership in a hospital system, case mix, and hospital bed size. The results suggest that IT governance matters when it comes to hospital financial performance. Reporting to the chief financial officer brings positive outcomes; reporting to the chief executive officer has a mixed financial result; and reporting to the chief operating officer was not associated with discernible financial impact.     

Hospital quality of care: does information technology matter? The relationship between information technology adoption and quality of care

BACKGROUND: Hospitals have been slow to adopt information technology (IT) largely because of a lack of generalizable evidence of the value associated with such adoption. PURPOSE: To explore the relationship between IT adoption and quality of care in acute-care hospitals. METHODS: Primary data on hospital IT adoption were combined with secondary hospital discharge data. Regression analyses were used to examine the relationship between various measures of IT adoption and several quality indicators after controlling for confounders. Adoption of IT was measured using a previously validated method that considers clinical, administrative, and strategic IT capabilities of acute-care hospitals. Quality measures included the Inpatient Quality Indicators developed by the Agency for Healthcare Research and Quality. RESULTS: Data from 98 hospitals were available for analyses. Hospitals adopted an average of 11.3 (45.2%) clinical IT applications, 15.7 (74.8%) administrative IT applications, and 5 (50%) strategic IT applications. In multivariate regression analyses, hospitals that adopted a greater number of IT applications were significantly more likely to have desirable quality outcomes on seven Inpatient Quality Indicator measures, including risk-adjusted mortality from percutaneous transluminal coronary angioplasty, gastrointestinal hemorrhage, and acute myocardial infarction. An increase in clinical IT applications was also inversely correlated with utilization of incidental appendectomy, and an increase in the adoption of strategic IT applications was inversely correlated with risk-adjusted mortality from craniotomy and laparoscopic cholecystectomy. PRACTICE IMPLICATIONS: Hospital adoption of IT is associated with desirable quality outcomes across hospitals in Florida. These findings will assist hospital leaders interested in understanding better the effect of costly IT adoption on quality of care in their institutions.     

Timing of adoption of laparoscopic cholecystectomy in Denmark and in The Netherlands: a comparative study

Laparoscopic cholecystectomy (LC) has diffused rapidly in most industrialised countries. The aim of this study has been to analyse the impact of different hospital characteristics on the hospital adoption of LC in Denmark and The Netherlands. Data on the timing of the adoption of LC and hospital characteristics (hospital size, teaching status and location) were retrieved in both countries. Proportional hazard regression was used to analyse different multivariate models. A total of 59 Danish and 109 Dutch hospitals adopting LC were identified. The multivariate analyses showed that increased hospital size was associated with relatively early adoption of LC in Denmark. Neither this nor other hospital characteristics influenced the timing of adoption in The Netherlands. As in other countries studied, hospital size is identified as an important factor in hospital adoption, whereas teaching status and location play a more limited role. The study shows that a multivariate method, such as the proportional hazard regression, can be used to elucidate differences among countries of the impact of different factors on the adoption of medium-ticket technologies like LC. Such multinational comparisons provide valuable information for health policy and planning.     

Vertical integration and optimal reimbursement policy

Health care providers may vertically integrate not only to facilitate coordination of care, but also for strategic reasons that may not be in patients’ best interests. Optimal Medicare reimbursement policy depends upon the extent to which each of these explanations is correct. To investigate, we compare the consequences of the 1997 adoption of prospective payment for skilled nursing facilities (SNF PPS) in geographic areas with high versus low levels of hospital/SNF integration. We find that SNF PPS decreased spending more in high integration areas, with no measurable consequences for patient health outcomes. Our findings suggest that integrated providers should face higher-powered reimbursement incentives, i.e., less cost-sharing. More generally, we conclude that purchasers of health services (and other services subject to agency problems) should consider the organizational form of their suppliers when choosing a reimbursement mechanism.