Intensive care at two teaching hospitals: an organizational case study

OBJECTIVE: To examine structural and organizational characteristics at two ICUs with marked differences in risk-adjusted survival. METHODS: We performed on-site organizational analysis in two ICUs at two major teaching hospitals. Our main outcome measures were interviews and direct observations by a team of clinical and organizational researchers; demographic, clinical, and survival data for 888 ICU admissions; and questionnaire responses from 70 nurses and 42 physicians on ICU structure and organization. ICU performance was measured using risk-adjusted survival and the ratios of actual to predicted ICU length of stay and resource use. RESULTS: Structural and organizational questionnaires, self-evaluation by staff members, and the research team's implicit judgments following detailed on-site analysis failed to distinguish units with higher and lower risk-adjusted survival. Both units exhibited practices to emulate and practices to avoid. CONCLUSIONS: The methods used in this study can identify organizational problems and potential means for improvement. The best practices and suggestions for improvement at these units provide examples of methods for improving ICU management.

Intensive care at two teaching hospitals: an organizational case study

OBJECTIVE

To examine structural and organizational characteristics at two ICUs with marked differences in risk-adjusted survival.

METHODS

We performed on-site organizational analysis in two ICUs at two major teaching hospitals. Our main outcome measures were interviews and direct observations by a team of clinical and organizational researchers; demographic, clinical, and survival data for 888 ICU admissions; and questionnaire responses from 70 nurses and 42 physicians on ICU structure and organization. ICU performance was measured using risk-adjusted survival and the ratios of actual to predicted ICU length of stay and resource use.

RESULTS

Structural and organizational questionnaires, self-evaluation by staff members, and the research team's implicit judgments following detailed on-site analysis failed to distinguish units with higher and lower risk-adjusted survival. Both units exhibited practices to emulate and practices to avoid.

CONCLUSIONS

The methods used in this study can identify organizational problems and potential means for improvement. The best practices and suggestions for improvement at these units provide examples of methods for improving ICU management.

The new world of managed care: creating organized delivery systems

In response to managed care pressures and imminent legislative reforms, provider organizations across the United States are coming together to form organized or integrated delivery systems. This paper describes various approaches to developing such systems and, drawing on ongoing research, examines what is known about the performance of such systems, the barriers they face, and the key factors likely to be associated with their success. The paper also addresses important policy questions related to the extent to which organized delivery systems should be actively encouraged by health reform legislation and how such systems should be held accountable.

Value and cost of teaching hospitals: a prospective, multicenter, inception cohort study

OBJECTIVE

To examine variations in case-mix, structure, resource use, and outcome performance among teaching and nonteaching intensive care units (ICU).

DESIGN

Prospective inception cohort study.

PATIENTS

A consecutive sample of 15,297 patients at 35 hospitals, which compared 8,269 patients admitted to 20 teaching ICUs at 18 hospitals vs. 7,028 patients admitted to 17 non-teaching ICUs at 17 hospitals.

INTERVENTIONS

None.

MEASUREMENTS

We selected demographic, physiologic, and treatment information for an average of 415 patients at each ICU, and collected data on hospital and ICU structure. Outcomes were compared using ratios of observed to risk-adjusted predicted hospital death rates, ICU length of stay, and resource use.

MAIN RESULTS

When compared to nonteaching ICUs, teaching ICUs had twice the number of physicians who regularly provided services and cared for significantly younger and more severely ill (p < .001) patients. Risk-adjusted ICU length of stay was similar, but resource use was significantly (p < .001) greater in teaching ICUs, with $3,000 (10.5%) of estimated total costs for an average ICU admission related to increased use of diagnostic testing and invasive procedures in teaching ICUs. Risk-adjusted hospital death rates were not significantly different (p = .1) between all teaching and nonteaching ICUs, but were significantly (p < .05) better in four teaching ICUs, but in only one nonteaching ICU. The 14 hospitals that were members of the Council of Teaching Hospitals had significantly better risk-adjusted outcome in their 16 ICUs than all others (odds ratio = 1.21, confidence interval 1.06 to 1.38, p = .004).

CONCLUSIONS

Teaching ICUs care for more complex patients in a substantially more complicated organizational setting. The best risk-adjusted survival rates occur at teaching ICUs, but production cost is higher in teaching units, secondary to increased testing and therapy. Teaching ICUs are also successfully transferring knowledge to trainees who, after their training, are achieving equivalent results at slightly lower cost in nonteaching ICUs.

Improving intensive care: observations based on organizational case studies in nine intensive care units: a prospective, multicenter study

OBJECTIVE

To examine organizational practices associated with higher and lower intensive care unit (ICU) outcome performance.

DESIGN

Prospective multicenter study. Onsite organizational analysis; prospective inception cohort.

SETTING

Nine ICUs (one medical, two surgical, six medical-surgical) at five teaching and four nonteaching hospitals.

PARTICIPANTS

A sample of 3,672 ICU admissions; 316 nurses and 202 physicians.

MATERIALS AND METHODS

Interviews and direct observations by a team of clinical and organizational researchers. Demographic, physiologic, and outcome data for an average of 408 admissions per ICU; and questionnaires on ICU structure and organization. The ratio of actual/predicted hospital death rate was used to measure ICU effectiveness; the ratio of actual/predicted length of ICU stay was used to assess efficiency.

MEASUREMENTS AND MAIN RESULTS

ICUs with superior risk-adjusted survival could not be distinguished by structural and organizational questionnaires or by global judgment following on-site analysis. Superior organizational practices among these ICUs were related to a patient-centered culture, strong medical and nursing leadership, effective communication and coordination, and open, collaborative approaches to solving problems and managing conflict.

CONCLUSIONS

The best and worst organizational practices found in this study can be used by ICU leaders as a checklist for improving ICU management.

Building integrated systems--the holographic organization

Organized delivery systems will be the vehicle for addressing cost, technology, quality, chronic illness, and information management issues in the context of caring for defined populations.

Trends in hospital/physician relationships

Findings from two surveys of all physicians in Pima County, Arizona, in 1985 and 1990 to determine the trajectory of hospital/physician relationships suggest that conflicts have increased in almost all areas. Physicians report the greatest number of and increase in conflicts in traditional problem areas such as the quality of nursing and response to equipment requests. They report a smaller increase in conflicts relating to the new competitive marketplace, including hospital efforts to influence medical practice. Both types of problems are most prevalent among younger physicians. The new marketplace thus appears to exacerbate traditional hospital/physician conflicts more than it generates new areas of contention.

Continuously improving patient care: practical lessons and an assessment tool from the National ICU Study

Pressure for hospitals to maintain quality while lowering cost or provide greater quality at a given level of cost is particularly critical in intensive care services for which it is increasingly difficult to match revenues with costs, given reimbursement limits. At the same time, twofold to threefold differences in intensive care unit risk-adjusted mortality have been reported. This article provides a model for thinking about continuous improvement of intensive care services, draws on the National ICU Study to identify fundamental organizational and managerial processes associated with better performance, and offers a validated assessment instrument to be used as a tool for continuous improvement.

Organizational assessment in intensive care units (ICUs): construct development, reliability, and validity of the ICU nurse-physician questionnaire

Health Services Research has a growing need for reliable and valid measures of managerial practices and organizational processes. A national study of 42 intensive care units involving over 1,700 respondents provides evidence for the reliability and validity of a comprehensive set of measures related to leadership, organizational culture, communication, coordination, problem solving-conflict management and team cohesiveness. The data also support the appropriateness of aggregating individual respondent data to the unit level. Implications for further research are discussed.

Revisiting the garden: medicine and management in the 1990s

The importance of effective hospital-physician relationships is acknowledged by all. Yet few empirically based guidelines exist for strengthening such relationships. Based on an in-depth examination of ten sites' experience, this article suggests a number of approaches and ideas for forming more effective hospital-physician relationships in the 1990s. Among the issues addressed include the nature of hospital-physician collaboration and competition, embracing risk, forging new forms of partnership, creating value for purchasers, and grooming younger physicians for leadership roles.

Perceptual and archival measures of Miles and Snow's strategic types: a comprehensive assessment of reliability and validity

Despite the widespread research use of Miles and Snow's typology of strategic orientations, there have been no systematic attempts to assess the reliability and validity of its various measures. The present work provides such an assessment using data collected at two points from over 400 organizations in the hospital industry. We examined dimensions of the typology using both perceptual self-typing and archival data from multiple sources. The results generally support predictions across a variety of measures. Implications for further testing and research are discussed.

The effect of hospital control strategies on physician satisfaction and physician-hospital conflict

This article examines several strategies that hospitals use to control their medical staffs. Such strategies include placing physicians on salary, developing exclusive hospital affiliations with physicians, and involving physicians in decision-making bodies. Using regression techniques, we investigate which hospitals are more likely to utilize these strategies and whether such strategies are effective in promoting physician-hospital integration. Contrary to our expectations, corporate hospital structures (e.g., for-profit hospitals, membership in multihospital systems) generally do not employ these strategies more often and oftentimes employ them less. There is also little evidence that control strategies are effective levers for increasing physician satisfaction or decreasing physician-hospital conflict. We suggest that control strategies are useful for purposes other than promoting physician-hospital integration. Finally, hospital ownership appears to exert the biggest effect on physician satisfaction and conflict.

New directions in hospital governance

This article suggests new directions for hospital governance to meet the demands of a rapidly changing health care environment. Board members must increasingly play roles as risk takers, strategic directors, experts, mentors, and evaluators. Lessons from other industries regarding risk taking, use of expertise, and streamlining decision making must be adapted to meet hospital needs. Recent data suggest that these needs may still differ by hospital ownership despite a convergence in investor-owned and not-for-profit corporate structures. The effectiveness of hospital boards in the future will depend on their ability to: (1) manage a diverse group of stakeholders; (2) involve physicians in the management and governance process; (3) meet the governance needs of multi-institutional systems and hospital restructuring; (4) meet the challenges of diversification and vertical integration; and (5) understand strategy formulation and implementation as interdependent and interrelated processes.

Educating healthcare leaders for the 21st century: evolution not revolution

In April of 1988, the Accrediting Commission on Education for Health Services Administration began reviewing its criteria, policies, and procedures for accreditation. The goal was to update the criteria and revise the policies and procedures to reflect advances in knowledge and practice and to ensure that accreditation judgments are objective and consistent. Since input from those most affected by the new criteria--faculty and practitioners--is essential, the commission sought assistance from the field. Through this collaboration, it is ACEHSA's intention to continue to encourage the dynamic collaboration of the field of education and the field of practice in health services administration that's characteristic of ACEHSA's 20-year history.

The keys to successful diversification: lessons from leading hospital systems

Hospitals have engaged in a variety of diversification activities over the past five years--many of which have not met expectations. Based on a nationwide study of 570 hospitals belonging to eight leading hospital systems (both investor-owned and not-for-profit), four key factors are identified that differentiate the winners from the losers. These include strategies for working effectively with physicians; learning to combine centralized and decentralized strategic planning approaches; understanding partially related diversification; and effectively applying the experience curve. Putting these lessons to work will increase the probability of a more effectively diversified health care system in the future.

The effect of investor-owned chain acquisitions on hospital expenses and staffing

Much concern has been raised about the effect of "corporatization" of health through the expansion of investor-owned hospital chains. One method of expansion is through hospital acquisition. At issue is the question of the effect of acquisitions on expenses and on such patient care inputs as staffing levels. In this article, we examine the effect of acquisition by one investor-owned chain on hospital costs and staffing. Subsequent to acquisition, hospital costs increase and staffing decreases, relative to competitor hospitals. However, since investor-owned hospitals not recently acquired do not have higher cost levels than their competitors, the increase in costs appears to be due to factors associated with the acquisition itself rather than factors associated with being an investor-owned hospital. Under the retrospective payment system in effect at the time, revenues also were higher for acquired hospitals. Under prospective payment, increasing revenues has been more difficult, decreasing acquisition incentives.

The impact of corporate structures on physician inclusion and participation

This study examines the impact of corporate arrangements on the hospital-physician relationship. Specifically, it investigates the effects of for-profit ownership and membership in a multihospital system on physician inclusion (salaried employment, hospital-based practice) and participation (involvement in governance and management). Contrary to common perceptions and several hypotheses drawn from the literature, corporate arrangements are associated with low physician inclusion and high participation. There is no indication that corporatization of healthcare restricts the physician's freedom of movement or decision-making role. It is instead argued that health care corporations do just the opposite in order to please physicians, promote physician welfare, and to gain legitimacy.

The effects of regulation, competition, and ownership on mortality rates among hospital inpatients

We examined the influence of the regulation of hospital rates, state certificate-of-need programs, competition, and hospital ownership on mortality rates among inpatients receiving care under Medicare for 16 selected clinical conditions that were studied as a group. Data were obtained from the records of 214,839 patients who received care in 981 hospitals in 45 states from July 1, 1983, through June 30, 1984. We found significant associations between higher mortality rates among inpatients and the stringency of state programs to review hospital rates (P less than or equal to 0.05), the stringency of certificate-of-need legislation (P less than or equal to 0.01), and the intensity of competition in the marketplace, as measured by enrollment in health maintenance organizations (P less than or equal to 0.05). Hospitals in the states with the most stringent review procedures for hospital rates had ratios of actual to predicted death rates that were 6 to 10 percent higher than those of hospitals in states with less stringent rate-review programs (P less than or equal to 0.001). Hospitals in the states with the most stringent procedures for reviewing applications for certificates of need had ratios of actual to predicted death rates that were 5 to 6 percent higher than those of hospitals in states with less stringent certificate-of-need procedures (P less than or equal to 0.05). There was no statistically significant association between mortality rates among inpatients and either the type of hospital ownership or the number of hospitals competing in the market area. Additional analyses, which examined alternative explanations for these findings, failed to change the results. These findings raise serious concerns about the welfare of patients who are admitted to hospitals in highly regulated areas and those admitted to hospitals in relatively competitive markets. They suggest that it is important to incorporate quality-assurance procedures and systems to monitor patients' outcomes into public and private programs designed to contain costs or promote competition, or both.

HCA's acquisition process: the physician's role and perspective

Physicians play an active role in the acquisition process. A study of acquisition impact showed that postacquisition, medical staffs grew and became more specialized and board certified. Greatest physician satisfaction was with the overall facility, medical equipment, and administrative responsiveness.

Diversification of health care services: the effects of ownership, environment, and strategy

The present findings suggest that the trend toward greater diversification of hospital services is likely to be most strongly influenced by state Medicaid policies and certain hospital characteristics. Increasing Medicaid eligibility and payment levels is likely to have a positive effect on services diversification. Growth in the number of inpatient services provided and a more severe case mix are also likely to be involved with greater service diversification. Affiliation with a not-for-profit hospital system is likely to be associated with more diversified hospital services but not affiliation with an investor-owned system. There is also some indication that the overall portfolio of services which a hospital offers in regard to market share and market growth characteristics influences diversification. Specifically, a low market share portfolio is likely to be associated with less diversification. Competition is likely to be associated with more diversification; particularly for hospitals belonging to systems. The effect of competition on hospital strategy and services diversification is a particularly important area for further investigation. Increasing Medicaid payment and eligibility levels are also likely to have a positive effect on the provision of services which are usually unprofitable. Raising such levels is likely to be particularly beneficial to inner-city hospitals who are already providing a greater number of such services. However, the present data suggest that investor-owned hospitals are least likely to provide such services. Increasing Medicaid eligibility levels is also likely to be associated with fewer services for which charity care has to be provided. State regulation in the form of rate review and certificate of need is likely to be associated with more services for which hospitals provide some charity care. But such policies alone do not deal with the larger issue of how to finance care for the medically indigent. Present data suggest the charity care issue may be particularly salient in markets characterized by a relatively high degree of competition. Finally, investor-owned hospitals provide as many services involving charity care as not-for-profit system hospitals, although investor-owned system hospitals provide fewer such services than not-for-profit freestanding hospitals. Throughout, the findings indicate the importance of distinguishing between ownership and system affiliation. Previous research has failed to make a distinction between ownership form and system affiliation, thus attributing to ownership form differences which, as present findings suggest, appear to be more associated with system affiliation.(ABSTRACT TRUNCATED AT 400 WORDS)

Hospital-physician vertical integration

Vertical integration of healthcare services has been viewed by hospitals as an effective strategy for maintaining institutional viability in the face of increased competitive pressures. This paper examines the effects of vertical integration on hospital utilization and market share, based on the experience of a selected set of hospitals that developed primary care group practices as part of a national demonstration program conducted over the period 1976 to 1982. Inpatient days and admissions for the average hospital increased 9.0 percent and 8.2 percent, respectively, over the initial four-year period of group operation, while average market share of inpatient days and admissions rose by 4.9 percent and 3.6 percent, respectively. The establishment of the group practices also helped most hospitals achieve a more favorable outpatient payor mix.

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.

High-performing healthcare organizations: guidelines for the pursuit of excellence

Based on existing research and observations, ten characteristics of high-performing healthcare organizations are identified. These include a willingness and ability to: stretch themselves; maximize learning; take risks; exhibit transforming leadership; exercise a bias for action; create a chemistry among top managers; manage ambiguity and uncertainty; exhibit a "loose coherence;" exhibit a well-defined culture; and reflect a basic spirituality. Numerous examples are provided reflecting the above characteristics, and the ability of excellent healthcare organizations to meet future challenges is discussed.

A theory of organizational response to hospital regulation: a reply to Smith and Mick

Smith and Mick identify four basic problems with the theory the present writers developed to explain organizational responses (in this case the behavior of hospitals) to regulation. They challenge the basic assumption regarding autonomy, disagree with the implied cause and effect relations between organizational response and regulation, criticize the omission of goals, and claim that the theory has only limited generality. In so doing they state that their primary concern is with "improving our understanding of the limitations and benefits of the theory." Each of the four topics they raise for consideration will receive comment.

Hospital-sponsored primary care: I. Organizational and financial effects

Findings are presented from a seven-year (1976-83) evaluation of the Community Hospital Program (CHP), a national demonstration program sponsored by the Robert Wood Johnson Foundation to assist 54 community hospitals in improving the organization of access to primary care. Upon grant expiration, 66 per cent of hospital-sponsored group practices continued under some form of hospital sponsorship; over 90 per cent developed or were planning to develop spin-off programs; and new physicians were recruited and retained in the community. About 9 per cent of hospital admissions were accounted for by group physicians and grantee hospitals experienced a greater annual increase in their market share of admissions than competing hospitals in the area. While only three of the groups generated sufficient revenue to cover expenses during the grant period, 21 additional groups broke even during the first post-grant year. Productivity and cost per visit compared favorably with most other forms of care. Hospitalization rates from the hospital-sponsored practices were somewhat lower than those for other forms of care. Medical director leadership and involvement and the organization design of the practice were among several key factors associated with higher performing practices. The ability of such joint hospital-physician ventures to meet the needs of the poor and elderly in a time of Medicare and Medicaid cutbacks is discussed along with suggestions for targeting future initiatives in primary care.

Suggestions for improving the study of health program implementation

More will be learned about health programs and the implementation of health policy in this country if we pay more attention to issues of program implementation. Of particular use would be more studies which explicitly link program implementation with program outcomes and which recognize the need to combine quantitative and qualitative analysis of program implementation; the use of triangulated methods in focusing on the relationship between program implementation and program outcomes; the incorporation and study of planned variation in the methods of implementing programs; recognition that the process is essentially one of organizational change and innovation, and the incorporation of existing theory and evidence relevant to these issues; and recognition that the ongoing nature of the implementation process requires longitudinal study designs for implementation as well as for outcome assessment. Cronbach [9] has remarked that evaluation research "lights a candle in the darkness, but it never brings dazzling clarity." It may be that more attention to program implementation and better research on the process, such as that suggested in this note, will provide a little more light and will bring if not dazzling , at least modest, improvements in clarity.

Hospital rate review. A theory and an empirical review

This paper presents a theory of the effects of rate review on hospital operations and organization. Its purpose is to explain the way in which hospitals have responded to regulation. In the development of this theory, the hospital product was viewed as a bundle of services, rate review was looked upon as a ceiling on the value of the bundle. The ceiling creates an incentive to remove elements from the bundle, i.e., to reduce 'quality'. When quality is variable, the effect on utilization becomes indeterminate. The model argues, among other things, that the hospital will change its service complement and its contractural arrangements with physicians and other hospitals. An extension of the organizational theory literature leads to implications concerning the ordering of hospital responses to regulation. The growing body of empirical literature on the effects of hospital rate review is used as an initial test of the major thrusts of the theory. A suggested agenda for further empirical work also is presented.