Horizontal and vertical integration-diversification in rural hospitals: a national study of strategic activity, 1983-1988

Interorganizational Linkages and Service and Personnel Shortages in Rural Nursing Homes

Increased demands on nursing homes for more diversified and technically complex services pose particular challenges for rural facilities. Because coordinating mechanisms have been proposed as a management strategy to deal with these issues, we studied the relationship between interorganizational linkages and shortages of personnel and services in a sample of 152 rural Pennsylvania nursing homes. Significant shortages of health care personnel that are central to long-term care were reported, as were shortages of services, especially for ventilator-dependent and demented residents. Although no evidence exists that coordination efforts were effective remedies to these problems in early 1992, it is apparent that managing patient/resident flows between hospitals and nursing homes through contractual agreements and other forms of "coordination" was identified as a strategy. Further research is required to assess the effectiveness of these types of agreements in terms of ensuring the continuity and quality of long-term care services in rural areas.

An Analysis of Organizational Performance Based on Hospital Specialization Level and Strategy Type

INTRODUCTION

Hospitals are studying the focused factory concept and attempting to increase their power in a competitive industry by becoming more specialized.

METHODOLOGY

This study uses the information theory index (ITI) and the Herfindahl-Hirschman index (HHI) to analyze the extent of specialization by Korean hospitals that receive national health insurance reimbursements. Hierarchical regression analysis is used to assess the impact of hospital specialization on the following four aspects of operational performance: productivity, profitability, efficiency and quality of care.

STUDY RESULTS

The results show that a focused strategy (high HHI) improves the income and adjusted number of patients per specialist through the efficient utilization of human resources. However, a diversified strategy (high ITI) improves the hospital utilization ratio, income per bed and adjusted number of patients per bed (controlling for material resources such as beds). In addition, as the concentration index increases, case-mix mortality rates and referral rates decrease, indicating that specialization has a positive relationship with quality of care.

Rural hospital nursing: results of a national survey of nurse executives

OBJECTIVE

The objective of the study was to describe nursing characteristics in small and larger rural hospitals and determine whether differences exist in market, hospital, and nursing characteristics.

BACKGROUND

A better description of nursing in rural settings is needed to understand the work context.

METHODS

A national sample of rural hospital nurse executives (n = 280) completed the Nurse Environment Survey and Essentials of Magnetism instrument.

RESULTS

Larger rural hospitals are more likely than small hospitals to have a clinical ladder (32.4% vs 19.4%), more baccalaureate-prepared RNs (20.8% vs 17.1%), greater perceived economic (mean, 9.5 vs 8.5) and external influences (mean, 41.1 vs 39.8), lower shared vision among hospital staff (mean, 18.4 vs 19.4), and higher levels of quality and safety engagement (mean, 16.9 vs 16.1). Most nurses employed in rural hospitals are educated at the associate degree (77.4%) level.

CONCLUSIONS

Contextual differences exist between small and larger rural hospitals. To promote the best patient outcomes, attention to contextual differences is needed to tailor nursing interventions to fit the resources, environment, and patient needs in a given healthcare setting.

More than just a question of technology: factors related to hospitals' adoption and implementation of health information exchange

INTRODUCTION

The provisions of the American Recovery & Reinvestment Act increased the likelihood of more widespread health information exchange (HIE), the electronic transfer of patient-level information between organizations, by essentially mandating the use of electronic health record systems. While important, the sparse body of research on HIE efforts and anecdotal reports indicate the barriers to HIE adoption and implementation include factors beyond simply the presence or absence of a specific technology.

METHODS

This paper examines those technological, organizational, and environmental factors that are associated with both HIE adoption and implementation in a sample of 4830 U.S. hospitals. Factors associated with adoption and implementation were modeled using random-intercept logistic regression.

RESULTS

Consistent with a perspective that adoption and implementation are different phenomena, many factors associated with an increased odds of adoption, were unassociated with implementation and vice versa. Non-profit status, public hospitals, more live and operation applications, more emergency room visits, network membership, and the presence of physician portals all increased hospitals' odds of HIE adoption. However, only network membership increased the odds of HIE implementation, whereas competition decreased those odds significantly.

CONCLUSIONS

This study agreed with earlier case-studies and anecdotal reports that factors beyond technology were important to both adoption and implementation. While current U.S. policy on healthcare information technology adoption focuses on technological barriers, many other non-technological factors may ultimately hinder effective HIE.

Strategy, Structure, and Patient Quality Outcomes in Ambulatory Surgery Centers (1997-2004)

The purpose of this study was to examine potential associations among ambulatory surgery centers’ (ASCs) organizational strategy, structure, and quality performance. The authors obtained several large-scale, all-payer claims data sets for the 1997 to 2004 period. The authors operationalized quality performance as unplanned hospitalizations at 30 days after outpatient arthroscopy and colonoscopy procedures . The authors draw on related organizational theory, behavior, and health services research literatures to develop their conceptual framework and hypotheses and fitted fixed and random effects Poisson regression models with the count of unplanned hospitalizations. Consistent with the key hypotheses formulated, the findings suggest that higher levels of specialization and the volume of procedures may be associated with a decrease in unplanned hospitalizations at ASCs.

Recruitment of Physicians To Rural America: A View Through the Lens of Transaction Cost Theory

CONTEXT

Many rural hospitals in the United States continue to have difficulties recruiting physicians. While several studies have examined some of the factors affecting the nature of this problem, we know far less about the role of economic incentives between rural providers and physicians.

PURPOSE

This conceptual article describes an economic theory of organization called Transaction Cost Theory (TCT) and applies it to rural hospital-physician relationships to highlight how transaction costs affect the type of contractual arrangement used by rural hospitals when recruiting physicians.

METHODS

The literature is reviewed to introduce TCT, describe current trends in hospital contracting with physicians, and develop a TCT contracting model for analysis of rural hospital-physician recruitment.

FINDINGS

The TCT model predicts that hospitals tend to favor contractual arrangements in which physicians are full-time employees if investments in physical or other assets made by hospitals cannot be easily redeployed for other services in the health care system. Transaction costs related to motivation and coordination of physician services are the key factors in understanding the unique contractual difficulties faced by rural providers.

CONCLUSIONS

The TCT model can be used by rural hospital administrators to assess economic incentives for physician recruitment.

Financial Consequences of Rural Hospital Long-Term Care Strategies

Data for 540 rural hospitals from 1982 to 1997 were analyzed to determine whether adoption of long-term-care (LTC) strategies improved hospital financial performance. Adoption of external and internal LTC strategies (other than swing-beds) was generally, but not unambiguously, associated with higher profits, increased occupancy, and/or lower costs.

Access to rural health services: research as community action and policy critique

Although access to rural health services has been an enduring focus for a variety of scholars, little has been recorded about the intersection between health service policy, provision and access experiences. This paper identifies how community action can highlight the gaps between policy rhetoric and access experiences. Taking the case of rural New Zealand, we document how a community organisation Rural Women New Zealand (RWNZ) completed a national survey as a form of community action. This study records rural households' experiences and challenges when accessing both primary and secondary health services. A range of access problems is identified. The study also illustrates how community-based activism concerning health care need not be local or single-service focussed, but can involve a multi-service critique at the national scale. Such work highlights not only the experience but also the complexity and politics of health service access.

Care Access in Rural Areas

Based on observations of the government's vital role in enhancing rural health care accessibility, in this article, we analyze solutions implemented by Quebec's public health system by highlighting the limitations in incentives used to remedy the dearth of rural medical resources and the consequent interest in ameliorating health care accessibility through service integration. The current challenge lies in fostering cooperation between health care institutions not subject to market incentives and integrating private practice physicians into the public system. To this end, regulatory agencies in public systems use four main leverage mechanisms: formal power, economic power, influence, and commitment, as illustrated in an experiment conducted in rural Quebec.

Is there a relationship between service integration and differentiation and patient outcomes?

OBJECTIVE

To examine the level of service integration within Maryland hospitals and service differentiation across the hospital system or network and its affect on heart failure patient clinical and economic outcomes.

DATA SOURCES/STUDY SETTING

Maryland Health Services Cost Review Commission Inpatient Data for 1997 and 1998 were used for secondary data analysis.

STUDY DESIGN

Retrospective cross sectional. Independent variables were the level of service integration and differentiation created from the 1998 American Hospital Association Annual Survey based on the work of Bazzoli et al. The primary dependent variables were readmission, in-hospital mortality, length of stay and costs.

DATA COLLECTION/EXTRACTION METHODS

Patients discharged from Maryland hospitals with a diagnosis that grouped to DRG 127 (heart failure) were extracted. Multivariate linear and logistic models clustered by hospital were used to analyse results at the patient level.

PRINCIPAL FINDINGS

A higher likelihood of readmission was found as the level of Community Differentiation increased. Although costs were higher as Total Differentiation increased in 1998, these results were not validated by 1997 data. No significant relationship was found between integration of services and outcomes.

CONCLUSIONS

Similar outcomes were achieved regardless of the level of service integration or differentiation. Community hospitals produce similar patient outcomes at the same cost for this diagnosis.

"If you want to sit on your butts you'll get nothing!" Community activism in response to threats of rural hospital closure in southern New Zealand

Problems of ensuring rural health services in New Zealand have intensified as successive governments have attempted to limit expenditure and health agencies have seen rural services as relatively 'expendable'. From the literature two sets of indicators are identified: the factors influencing successful retention of rural services and the outcomes for the community. Interview and documentation data indicate the extent to which these characteristics and outcomes were present in nine rural community health trusts in southern New Zealand during the 1990s. Variability in outcome and success of community response to threats to rural services relates to the factors identified from the literature, particularly community leadership and capability, but also the prominent role played by local professionals. Given the common political and economic context, these local factors proved important in determining which communities successfully retained hospital services.

Rural hospitals: trends, challenges, and a future research and policy analysis agenda

Previous reviews of the status of rural hospitals conclude that rural hospitals play a major role in ensuring the provision of health services in rural areas, are an essential part of the social and economic identity of rural communities, have had mixed success in their ability to respond to environmental threats, and are very sensitive to public policies due, in part, to their small size. The evolving hospital paradigm in the United States and a turbulent economic and health care environment have created an uncertain future for the rural hospital. Hospitals are being forced to shift their emphasis from filling acute inpatient care beds to providing a more diversified set of services through linkages with other institutions and provider groups. This presents challenges for rural hospitals, which often serve as the foundation for health care delivery in rural communities yet struggle to overcome the effects of troubled local economies, shortages of health professionals, and public policy inequities. This article reviews key trends and challenges facing rural hospitals from the perspective of their structure and organization, financial sustainability, quality of care provided, and strategic linkages with other entities. It concludes with the presentation of a research and policy analysis agenda that addresses the feasibility of the role of the rural hospital as the hub or coordinator of the rural health care delivery system, the fiscal viability of the rural hospital in the post-Balanced Budget Act period, strategies for measuring and improving the quality of care provided by rural hospitals, and the structure and value of horizontal and vertical linkages of rural hospitals.

Rural hospitals and the adoption of managed care strategies

This research examined the performance of rural hospitals engaged in different levels of managed care activities and identified factors related to performance and competition that affected rural hospitals' likelihood of pursuing managed care as a strategy. The sample studied consisted of 139 rural hospitals in Iowa and Nebraska. Results showed that a relatively high percentage of hospitals were engaged in managed care activities, mainly through contractual arrangements. The study found that high competition in the marketplace increased the likelihood of hospitals pursuing managed care strategies, while high demand markets had a negative association with the likelihood of pursuing a managed care strategy. No significant relationship was detected between poor performance and pursuing a managed care strategy.

Networks and the fiscal performance of rural hospitals in Oklahoma: are they associated?

This paper uses regression analysis to explore the relation of network membership to the financial performance of rural hospitals in Oklahoma during fiscal year 1995. After adjusting for the scope of service, as measured by the number of facilities or services offered by the hospital, indicators of fiscal status are (1) the cash receipts derived from net patient revenue; (2) the cash disbursements related to operating costs, net of interest and depreciation expense, labor costs and nonlabor costs; and (3) net cash flow, defined as the difference between cash receipts and disbursements. Controlling for the effects of the hospital's structural attributes, operating characteristics and market conditions, the results indicate that members of a network reported lower net operating costs, labor costs and nonlabor expenses per service than nonmembers. Hence, the analysis seems to suggest that the membership of rural hospitals in a network is associated with lower cash disbursements and an improved net cash flow, outcomes that may preserve their fiscal viability and the access of the population at risk to service.

Management of integrated delivery systems in the next decade

In an attempt to find some remedies within what is already a highly competitive and politically charged environment, this article's purpose is to specify some major steps that the management of integrated delivery systems might heed in the next decade to curtail their expenditures and better position themselves for the future.

How do urban organized health care delivery systems link with rural providers?

Organized delivery systems are becoming an increasingly important component of urban health care markets and are expanding their influence in rural areas as well. They also are developing new linkages with rural providers. This article, based on the experiences of 20 diverse organizations, identifies and describes the strategies being used by urban systems to redefine linkages with rural hospitals and, particularly, physicians.

Risk-sharing integration efforts in the hospital sector

The extent of hospital involvement in integrated delivery systems (IDSs) during 1996 was assessed by a national sample of 235 short-term private general hospitals. Two out of five hospitals were participating in networks with some financial risk sharing, and another third reported membership in IDS networks without financial obligations. Managed care's presence was the only significant factor moving hospitals from a stand-alone status to network membership. The decision to share financial risk was influenced not only by managed care pressures, but also by the level of local hospital competition and the severity of the inpatient case mix.

Physician and clinical integration among rural hospitals

The pressures for closer alignment between physicians and hospitals in both rural and urban areas are increasing. This study empirically specifies independent dimensions of physician and clinical integration and compares the extent to which such activities are practiced between rural and urban hospitals and among rural hospitals in different organizational and market contexts. Results suggest that both rural and urban hospitals practice physician integration, although each emphasizes different types of strategies. Second, urban hospitals engage in clinical integration with greater frequency than their rural counterparts. Finally, physician integration approaches in rural hospitals are more common among larger rural hospitals, those proximate to urban facilities, those with system affiliations, and those not under public control.

Strategic activity and financial performance of U.S. rural hospitals: a national study, 1983 to 1988

This study examines the effect of 13 strategic management activities on the financial performance of a national sample of 797 U.S. rural hospitals during the period of 1983-1988. Controlled for environment-market, geographic-region, and hospital-related variables, the results show almost no measurable effect of strategic adoption on rural hospital profitability and liquidity. Where statistically significant relationships existed, they were more often negative than positive. These findings were not expected; it was hypothesized that positive effects across a broad range of strategies would emerge, other things being equal. Discussed are possible explanations for these findings as well as their implication for a rural health policy relying on individual rural hospital strategic adaptation to environmental change.

State legislation and policy affecting rural hospital conversion and closure

Many rural hospitals have closed or converted to organizations that provide health services other than general, acute inpatient care. However, little is known about why rural hospitals convert rather than close. This study evaluates the relationship between state policy and rates of rural hospital conversion relative to rates of rural hospital closure. The expectation was that the relationship among state policies and rates of conversion and rates of closure differs as a function of whether a state policy facilitates rural hospital transition to alternative models of care or supports them in their existing form. National data were analyzed for all rural hospitals from 1984 to 1991. Results indicate that state policies have done little to facilitate widespread adoption of conversion among rural hospitals. Despite these findings, results also indicate that some state policies have resulted in an increase in the rate of rural hospitals conversions as an alternative to closure.

Measuring and evaluating the performance of vertically integrated rural health networks

The growing interest in health care networks is extraordinary given the lack of a common understanding of what networks are and what they can accomplish. The purpose of this article is to develop a conceptual approach to the study of vertically integrated rural health networks. This article provides a network typology, a framework for assessing network performance, and examples of measurable performance indicators. It concludes with a description of the salient research questions that need to be addressed concerning the relationships between the environment, structure, and performance of vertically integrated rural health networks.

Student health services at four rural colleges: implications for healthcare reform

This study investigated services available at health centers at four rural colleges. It also investigated the healthcare accessible to students at those institutions if college health services were unavailable. The authors used a survey and interview procedure to establish the existence of healthcare resources in two adjacent communities and to identify barriers to student use. Findings from the study indicate that, for many students attending rural colleges, the student health center may be the only source of primary healthcare available. The data support the need to include student health centers at rural colleges in the national healthcare reform agenda because closing any one of these schools' health centers could result in a healthcare disaster for some students.