Is It Resources, Habit or Both

Impact of External Environmental Dimensions on Financial Performance of Major Teaching Hospitals in the U.S

Teaching hospitals have a unique mission to not only deliver graduate medical education but to also provide both inpatient and ambulatory care and to conduct clinical medical research; therefore, they are under constant financial pressure, and it is important to explore what types of external environmental components affect their financial performance. This study examined if there is an association between the short-term and long-term financial performance of major teaching hospitals in the United States and the external environmental dimensions, as measured by the Resource Dependence Theory. Data for 226 major teaching hospitals spanning 46 states were analyzed. The dependent variable for short-term financial performance was days cash on hand, and dependent variable for long-term financial performance was return on assets, both an average of most recently available 4-year data (2014-2017). Utilizing linear regression model, results showed significance between outpatient revenue and days cash on hand as well as significant relationship between population of the metropolitan statistical area, unemployment rate of the metropolitan statistical area, and teaching hospital's return on assets. Additionally, system membership, type of ownership/control, and teaching intensity also showed significant association with return on assets. By comprehensively examining all major teaching hospitals in the U.S. and analyzing the association between their short-term and long-term financial performance and external environmental dimensions, based upon Resource Dependence Theory, we found that by offering diverse outpatient services and novel delivery options, administrators of teaching hospitals may be able to increase organizational liquidity.

How Does Electronic Health Information Exchange Affect Hospital Performance Efficiency? The Effects of Breadth and Depth of Information Sharing

EXECUTIVE SUMMARY

This research was motivated by the large investment in health information technology (IT) by hospitals and the inconsistent findings related to the effects of health IT adoption on hospital performance. Building on resource orchestration theory and the information systems literature, the authors developed a research model to investigate how the configuration strategies for sharing information under health IT systems affect hospital efficiency. The hypotheses were tested using data from the 2010 annual and IT surveys of the American Hospital Association, Centers for Medicare & Medicaid Services case mix index, and U.S. Census Bureau's small-area income and poverty estimates. The study revealed that in health IT systems, the breadth (extent) and depth (level of detail) of digital information sharing among stakeholders each has a curvilinear relationship with hospital efficiency. In addition, breadth and depth reinforce each other's positive effects and attenuate each other's negative effects, and their balance has a positive effect on hospital efficiency. The results of this research have the potential to enrich the literature on the value of adopting health IT systems as well as in providing practitioner guidelines for meaningful use.

Market characteristics associated with community health assessments by local health departments

OBJECTIVES

Community health assessments (CHAs) have been promoted as a strategy for population health. This study uses the resource dependence theory (RDT) to examine how external market characteristics are associated with CHAs conducted by local health departments (LHDs) and subsequent partnering with hospitals for CHAs in the United States.

STUDY DESIGN

The RDT was used to guide the conceptualization of the market in the context of local public health. RDT emphasizes that organizations are not in control of all the resources they need and, to some extent, must rely on the external environment to provide those necessary resources. Binary measures were used to examine whether LHDs conducted CHAs and whether they did so in partnership with a local hospital. Independent variables were identified to measure the RDT constructs of munificence (resource availability in the environment), complexity (level of heterogeneity), and dynamism (level of environmental turbulence).

METHODS

Bivariate (Chi-squared and t-tests) and multivariate (logistic regression) cross-sectional analyses were conducted using secondary data from the National Association of County and City Health Officials 2013 Profile Survey, the 2013 County Health Rankings data set, and the Health Resources and Services Administration's Area Health Resource File.

RESULTS

Two of three variables measuring munificence were positively associated with having conducted a CHA; one variable was also related to doing so in conjunction with a local hospital. One measure of market complexity was negatively associated with having conducted a CHA. No measure of dynamism was related to the dependent variables.

CONCLUSIONS

Study results provide partial support for the use of RDT in understanding the relationship between market factors and LHDs' activities around CHAs. Local hospitals as partners and other market factors should be considered by LHDs when conducting CHAs. Findings from this work will be of interest to public health practitioners, policy-makers, and researchers interested in public health and population health improvement.

Market and organizational factors associated with hospital vertical integration into sub-acute care

BACKGROUND

Changes in payment models incentivize hospitals to vertically integrate into sub-acute care (SAC) services. Through vertical integration into SAC, hospitals have the potential to reduce the transaction costs associated with moving patients throughout the care continuum and reduce the likelihood that patients will be readmitted.

PURPOSE

The purpose of this study is to examine the correlates of hospital vertical integration into SAC.

METHODOLOGY/APPROACH

Using panel data of U.S. acute care hospitals (2008-2012), we conducted logit regression models to examine environmental and organizational factors associated with hospital vertical integration. Results are reported as average marginal effects.

FINDINGS

Among 3,775 unique hospitals (16,269 hospital-year observations), 25.7% vertically integrated into skilled nursing facilities during at least 1 year of the study period. One measure of complexity, the availability of skilled nursing facilities in a county (ME = -1.780, p < .001), was negatively associated with hospital vertical integration into SAC. Measures of munificence, percentage of the county population eligible for Medicare (ME = 0.018, p < .001) and rural geographic location (ME = 0.069, p < .001), were positively associated with hospital vertical integration into SAC. Dynamism, when measured as the change county population between 2008 and 2011 (ME = 1.19e-06, p < .001), was positively associated with hospital vertical integration into SAC. Organizational resources, when measured as swing beds (ME = 0.069, p < .001), were positively associated with hospital vertical integration into SAC. Organizational resources, when measured as investor owned (ME = -0.052, p < .1) and system affiliation (ME = -0.041, p < .1), were negatively associated with hospital vertical integration into SAC.

PRACTICE IMPLICATIONS

Hospital adaption to the changing health care landscape through vertical integration varies across market and organizational conditions. Current Centers for Medicare and Medicaid reimbursement programs do not take these factors into consideration. Vertical integration strategy into SAC may be more appropriate under certain market conditions. Hospital leaders may consider how to best align their organization's SAC strategy with their operating environment.

Environmental factors associated with physician's engagement in communication activities

BACKGROUND

Communication between patients and providers is a crucial component of effective care coordination and is associated with a number of desired patient and provider outcomes. Despite these benefits, physician-patient and physician-physician communication occurs infrequently.

PURPOSE

The purpose of this study was to examine the relationship between a medical practice's external environment and physician engagement in communication activities.

METHODOLOGY/APPROACH

This was a cross-sectional examination of 4,299 U.S. physicians' self-reported engagement in communication activities. Communication was operationalized as physician's time spent on communication with patients and other providers during a typical work day. The explanatory variables were measures of environmental complexity, dynamism, and munificence. Data sources were the Health Tracking Physician Survey, the Area Resource File database, and the Dartmouth Atlas. Binary logistic regression was used to estimate the association between the environmental factors and physician engagement in communication activities.

FINDINGS

Several environmental factors, including per capita income (odds ratio range, 1.17-1.38), urban location (odds ratio range, 1.08-1.45), fluctuations in Health Maintenance Organization penetration (odds ratio range, 3.47-13.22), poverty (odds ratio range, 0.80-0.97) and population rates (odds ratio range, 1.01-1.02), and the presence of a malpractice crisis (odds ratio range, 0.22-0.43), were significantly associated with communication.

PRACTICE IMPLICATIONS

Certain aspects of a physician's external environment are associated with different modes of communication with different recipients (patients and providers). This knowledge can be used by health care managers and policy makers who strive to improve communication between different stakeholders within the health care system (e.g., patient and providers).

Analyzing Determinants of Hospitals’ Accountable Care Organizations Participation

Accountable care organizations (ACOs) are rapidly being implemented across the United States, but little is known about what environmental and organizational factors are associated with hospital participation in ACOs. Using resource dependency theory, this study examines external environmental characteristics and organizational characteristics that relate to hospital participation in Medicare ACOs. Results indicate hospitals operating in more munificent environments (as measured by income per capita: β = 0.00002, p < .05) and more competitive environments (as measured by Health Maintenance Organization penetration: β = 1.86, p < .01) are more likely to participate in ACOs. Organizational characteristics including hospital ownership, health care system membership, electronic health records implementation, hospital type, percentage of Medicaid inpatient discharge, and number of nursing home beds per 1,000 population over 65 are also related to ACO participation. Should the anticipated benefits of ACOs be realized, findings from this study can guide strategies to encourage hospitals that have not gotten involved in ACOs.

Environmental factors and quality improvement in county and local health departments

OBJECTIVE

On the basis of resource dependency theory and the uncertainty principle, this study examines the relationship between the local public health market environment and the use of quality improvement (QI) strategies in local health departments.

DESIGN

This cross-sectional study uses secondary data from the 2008 National Association of County & City Health Officials profile study, the Health Resources and Services Administration's Area Resource File, and the County Health Rankings 2010 data set.

SETTING AND PARTICIPANTS

US local health departments.

MAIN OUTCOME MEASURES

Seven binary dependent variables that represented the use of QI processes or QI training within local health departments were used. Eight independent variables were identified and operationalized to measure the constructs of munificence, dynamism, and complexity for the local public health market environment. Bivariate and multivariate regression analyses were used.

RESULTS

Two of the 3 munificence variables were positively associated with QI, as predicted. These included percentage of zip codes with healthy food outlets (β = +.016, P < .05) and the number of primary care physicians per capita (β = +1.327, P < .05). Two of the 3 measures of complexity were, as predicted, negatively associated with indicators of QI. These included smoking prevalence (β = -.118, P < .05) and obesity rates (β = -.081, P < .10). With respect to dynamism, 1 variable (change in population size over a 5-year period) was unexpectedly, positively related to QI (β = +.118, P < .10 and β = +0.235, P < .05).

CONCLUSIONS

Overall findings provide moderate support for the use of resource dependency theory and the uncertainty perspective to understand the influence of the external environment on QI within the local public health setting. Future research should examine other ways of operationalizing these environmental constructs to examine the relationship between the environment and other elements of public health practice.

Community-level sociodemographic characteristics and patient-centered medical home capacity

PURPOSE

Longitudinally (2008-2012) assess whether community-level sociodemographic characteristics were associated with patient-centered medical home (PCMH) capacity among primary care and specialty physician practices, and the extent to which variation in PCMH capacity can be accounted for by sociodemographic characteristics of the community.

DESIGN/METHODOLOGY/APPROACH

Linear growth curve models among 523 small and medium-sized physician practices that were members of a consortium of physician organizations pursuing the PCMH.

FINDINGS

Our analysis indicated that the average level of sociodemographic characteristics was typically not associated with the level of PCMH capacity, but the heterogeneity of the surrounding community is generally associated with lower levels of capacity. Furthermore, these relationships differed for interpersonal and technical dimensions of the PCMH.

IMPLICATIONS

Our findings suggest that PCMH capabilities may not be evenly distributed across communities and raise questions about whether such distributional differences influence the PCMH's ability to improve population health, especially the health of vulnerable populations. Such nuances highlight the challenges faced by practitioners and policy makers who advocate the continued expansion of the PCMH as a means of improving the health of local communities.

ORIGINALITY/VALUE

To date, most studies have focused cross-sectionally on practice characteristics and their association with PCMH adoption. Less understood is how physician practices' PCMH adoption varies as a function of the sociodemographic characteristics of the community in which the practice is located, despite work that acknowledges the importance of social context in decisions about adoption and implementation that can affect the dissemination of innovations.

Inpatient Rehabilitation Facilities

When Medicare implemented a prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs) in 2002, a lack of organizational research on IRFs hampered the ability to predict how providers would modify their behavior in response to the PPS. This study consists of 36 key informant interviews that examined the experiences of nine IRFs in the lead-up to and aftermath of the IRF-PPS. Drawing on earlier work by Oliver, the authors develop a taxonomy of the new organizational practices that IRFs adopted in response to the changing payment system. A model of key organizational and environmental characteristics that predict the adoption of these practices based on an IRF’s willingness and/or capacity to comply with institutional pressure is then proposed. The proposed model can also be applied to other regulatory changes affecting IRFs.

The impact of Medicare's Prospective Payment System on staffing of long-term acute care hospitals: the early evidence

BACKGROUND

Long-term acute care hospitals (LTACHs) treat patients with complex medical conditions requiring hospital care for extended periods of time. In the last decade, Medicare saw spiraling costs for post-acute care settings. The Balanced Budget Act mandated the use of Prospective Payment System (PPS) for all post-acute care settings including LTACHs. Medicare shifted to PPS for LTACHs in October 2002.

PURPOSE

This study analyzes the early effect of Medicare's PPS on the staffing intensity of LTACHs.

METHODOLOGY/APPROACH

The study uses panel data of measures of hospital and market characteristics in years 2001 through 2004. The impact of the payment mechanism, market, and organizational variables on the staffing intensity of LTACHs is evaluated using fixed-effects (within-groups) regression analysis.

FINDINGS

The fixed-effects regression models found that Medicare's PPS was associated with higher staffing intensity of the LTACHs in years 2003 and 2004. Market-level per capita income was significantly positively associated with staffing intensity. No secular trend in staffing intensity was found.

PRACTICE IMPLICATIONS

The concern that the cost containment incentives of PPS would result in lowered staffing levels of LTACHs was not borne out by this study. Further follow-up is required to assess in the longer term the effects of PPS on staffing and quality of care in LTACHs.

Organizational and environmental determinants of hospital EMR adoption: a national study

The recent focus on health care quality improvement and cost containment has led some policymakers and practitioners to advocate the adoption of health information technology. One such technology is the Electronic Medical Record (EMR), which is predicted to change and improve health care in the USA. Little is known about factors that influence hospital adoption of this relatively new technology. The purpose of this paper is to determine the national prevalence of EMR adoption in acute care hospitals while examining the organizational and environmental correlates using a Resource Dependence Theoretical Perspective. Significant predictors of hospital EMR use may indicate barriers to use for some hospitals and can be used to guide policy. This study uses a non-experimental cross sectional design to examine hospital EMR use in 2004. A logistic regression approach is used to determine the correlations between hospital EMR use and organizational and environmental characteristics. Hospital EMR use was identified using the HIMSS Analytics data. Organizational and environmental variables were measured using data from the AHA, CMS (financial and case mix) and ARF. Hospital EMR adoption is significantly associated with environmental uncertainty, type of system affiliation, size, and urbanness. The effects of competition, munificence, ownership, teaching status, public payer mix, and operating margin were not statistically significant. Significant predictors of hospital EMR adoption represent barriers that may prevent certain hospitals from obtaining and using EMRs. These hospitals include those that are smaller, more rural, non-system affiliated, and in areas of low environmental uncertainty. Since EMR adoption may be an organizational survival strategy for hospitals to improve quality and efficiency, hospitals that are at risk of missing the wave of implementation should be offered services and incentives to enable them to implement and maintain EMR systems.