Assessing performance of multi-hospital organizations: a measurement approach

PURPOSE: This paper aims to introduces a measure to assess the perceived effectiveness of multi-hospital organizations (MOs). DESIGN/METHODOLOGY/APPROACH: A sample of top managers of non-profit hospitals serves as the study setting. Data were collected via mail surveys. Usable responses were obtained from 189 hospitals. The measure was developed by considering the instrumentality and effect components of a set of relevant motives for joining an MO. During the course of the study, three alternative formulations were examined. FINDINGS: Results show that the measures based on effect alone and a multiplicative combination of effect and instrumentality demonstrate sound psychometric properties. The recommendation here is to adopt the latter measure. RESEARCH LIMITATIONS/IMPLICATIONS: The study was limited to a particular sample. Replications among other samples are needed to validate the current findings. Also, because the exact content of the objective function of a hospital for joining an MO is not necessarily constant over time, there is a need to conduct similar studies on a periodic basis. PRACTICAL IMPLICATIONS: The measure recommended here uses multiplicative/weighted instrumentality and effect scores as opposed to only the instrumentality or effect scores. This makes it possible to go beyond the mere "why" or "how" questions. Simultaneous consideration of instrumentality and effect dimensions affords a richer and more relevant understanding. ORIGINALITY/VALUE: Valid and reliable measures of performance are critical for both managerial and research purposes. The measure proposed in the current study could be used in structural equation models to investigate the effect of individual actions on performance and the impact of performance on other outcome measures (e.g. intentions to stay in an MO).