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Prelims

Transforming Health Care

ISBN: 978-1-83982-957-4, eISBN: 978-1-83982-956-7

ISSN: 1474-8231

Publication date: 26 October 2020

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(2020), "Prelims", Hefner, J.L., Al-Amin, M., Huerta, T.R., Aldrich, A.M. and Griesenbrock, T.E. (Ed.) Transforming Health Care (Advances in Health Care Management, Vol. 19), Emerald Publishing Limited, Leeds, pp. i-xxi. https://doi.org/10.1108/S1474-823120200000019002

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Emerald Publishing Limited

Copyright © 2020 Emerald Publishing Limited

Half Title Page

Transforming Health care

Series Title Page

Advances in Health Care Management

Series Editor: Timothy Huerta

Associate Editors: Jennifer L. Hefner, Alison M. Aldrich, Tyler E. Griesenbrock

Previous Volumes:

Volume 11: Biennial Review of Health Care Management – Edited by John D. Blair and Myron D. Fottler, with assistance from Grant T. Savage
Volume 12: Health Information Technology in the International Context – Edited by Nir Menachemi and Sanjay Singh, with assistance from Valerie A. Yeager and Grant T. Savage
Volume 13: Annual Review of Health Care Management: Strategy and Policy Perspectives on Reforming Health Systems – Edited by Leonard H. Friedman, Grant T. Savage, and Jim Goes
Volume 14: Leading in Health Care Organizations: Improving Safety, Satisfaction and Financial Performance – Edited by Tony Simons, Hannes Leroy, and Grant T. Savage
Volume 15: Annual Review of Health Care Management: Revisiting the Evolution of Health Systems Organization – Edited by Jim Goes, Grant T. Savage, and Leonard H. Friedman
Volume 16: Population Health Management in Health Care Organizations – Edited by Jennifer L. Hefner, Timothy R. Huerta, and Ann Scheck McAlearney
Volume 17: International Best Practices in Health Care Management – Edited by Sandra C. Buttigieg, Cheryl Rathert, Wilfried Von Eiff
Volume 18: Structural Approaches to Address Issues in Patient Safety – Edited by Susan D. Moffatt-Bruce

Title Page

Advances in Health Care Management

Volume 19

Transforming Health Care: A Focus on Consumerism and Profitability

Guest Edited by

Jennifer L. Hefner

The Ohio State University, USA

Mona Al-Amin

Suffolk University, USA

Series Editor

Timothy R. Huerta

Associate Editors

Alison M. Aldrich

Tyler E. Griesenbrock

United Kingdom – North America – Japan India – Malaysia – China

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Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2020

Copyright © 2020 Emerald Publishing Limited

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ISBN: 978-1-83982-957-4 (Print)

ISBN: 978-1-83982-956-7 (Online)

ISBN: 978-1-83982-958-1 (Epub)

ISSN: 1474-8231 (Series)

List of Figures

The Cost of Capital, Leverage, and System Membership: Does System Membership Help Hospitals Achieve Optimal Leverage?
Figure 1. Kernel Density Plot of Propensity Scores for Acquired Hospitals and Matched Controls
Financial Literacy and Consumer Choice of Health Insurance: Evidence from Low-income Populations in the United States
Figure 1. Financial Literacy by Income in Percentage of Federal Poverty Level (FPL). Notes: Income in percentage of FPL is grouped in 20 percentage point intervals: [100-120%), [120–140%), etc.; average values – weighted using raking weights to correct for sample selection – of the financial literacy index; as well as indicators for whether specific questions were answered correctly (numeracy, inflation, risk diversification) within income intervals displayed. Trend lines represent predicted values based on a quadratic regression of the average index and the indicators, respectively, on income intervals
Does Transparency of Quality Metrics Affect Hospital Care Outcomes? A Systematic Review of the Literature
Figure 1. Conceptual Framework
Figure 2. Keyword List
Figure 3. Flow Diagram of Included Studies
Leadership and Safety Excellence: The Experience of Hospital Support Service Workers
Figure 1. Organization of Work on Occupational Safety and Health Framework

List of Tables

Profitability of Rural Hospitals: An Analysis of Government Payment Policies
Table 1. Description of Medicare Programs Targeted for Rural Hospitals
Table 2. Variable Definitions and Descriptive Statistics
Table 3. Mean Values for Operating and Total Margin, Classified by Binary Variables, 2015
Table 4. Ordinary Least Squares Regression Estimates, Operating Margin, and Total Margin, 2015 (n = 2,114)
Assessing the Impact of Privatization of Public Hospitals on Community Orientation: A Stakeholder Approach
Table 1. Perceived Stakeholder Attributes of the Community by Hospital Ownership Type
Table 2. Cross-Tabulations and Analysis of Variance (n = 7,674)
Table 3. Fixed-Effects Negative Binomial Regression Predicting the Effect of Privatization on Community Orientation
Table 4. Fixed-effects Negative Binomial Regression Predicting the Effect of Privatization to For-profit or Not-for-profit Status on Community Orientation
The Cost of Capital, Leverage, and System Membership: Does System Membership Help Hospitals Achieve Optimal Leverage?
Table 1. Independent NFP Hospital Leverage by Year
Table 2. Preacquisition Hospital Characteristics
Table 3. Difference-in-Difference Estimates of Changes in Leverage
Consumers' Exposure to Price Transparency: Compliance Testing and Sentiment Analysis of US Hospitals During 2019
Table 1. US Hospital Characteristics
Table 2. Compliance and Accessibility of Chargemaster Data
Table 3. Selected Illustrative Quotes
Table 4. Contingency Table for Webpage versus Sentiment
Financial Literacy and Consumer Choice of Health Insurance: Evidence from Low-income Populations in the United States
Table 1. Financial Literacy Questions in American Life Panel (ALP) (* indicates the correct answer)
Table 2. Descriptive Statistics of American Life Panel (ALP) Sample
Table 3. Characteristics of Respondents by Score on the Financial Literacy (FL) Questions
Table 4. Multivariable Regression Explaining Financial Literacy (FL)
Does Transparency of Quality Metrics Affect Hospital Care Outcomes? A Systematic Review of the Literature
Table 1. Previous Systematic Reviews on Transparency
Table 2. Studies Examining the Relationship between Transparency and Mortality
Table 3. Studies Examining the Relationship between Transparency and Other Quality Measures
Leadership and Safety Excellence: The Experience of Hospital Support Service Workers
Table 1. Sample Demographics
Table 2. Descriptive Statistics, Correlations, and Scale Reliabilities
Table 3. Relationship of Safety and Unit Leadership on Individual Safety Perceptions

About the Contributors

Dr Resat Aydin, MD, is a physician and currently working as a clinician in Turkey. His broad research focus is on public health. He is particularly interested in the implications of quality initiatives on public health.

Dr Sebastian Bauhoff, Harvard TH Chan School of Public Health, United States, is a Professor of Global Health and Economics at the Department of Global Health and Population. His research focus is on economic and quantitative analyses of health care policies.

Lawton R. Burns is currently the James Joo-Jin Kim Professor of Health Care Management, as well as a Professor of Management at the Wharton School at the University of Pennsylvania. He is also the Faculty Co-Director for the Roy & Diana Vagelos Program in Life Sciences and Management.

Dr Katherine Grace Carman, RAND Corporation, United States, is a Senior Economist and Director of the Center for Financial and Economic Decision Making. Her research on financial and health decisions has been published in PNAS, Medical Decision Making, Health Affairs, and the Journal of Economic Behavior and Organization.

Dr Nathan W. Carroll's research and teaching focus on the financial management of health care organizations and organizational responses to changing reimbursement systems. Prior to entering academia, he worked in both managed care and long-term care.

Dr Josué Patien Epané is an Associate Professor in the Department of Health Care Administration and Policy at the University of Nevada, Las Vegas. His research focuses on exploring strategies that can help enhance organizational performance (clinical and financial) in the health care field, such as the use of hospitalists.

Dr Eric W. Ford, PhD, MPH, of the University of Alabama at Birmingham, has worked to improve care quality through better health information and organizational structures. His work on the Leapfrog Group project was among the first to provide measures of hospitals' quality for consumers. More recently, his work on health information technology (HIT) has sought to improve both caregivers' and consumers' experiences through better information access.

Dr Gregg M. Gascon, PhD, CHDA, is a clinical data scientist at OhioHealth where he works in research, evaluation and measurement. Dr Gascon has taught research design and methods, program evaluation, statistics and biomedical informatics at The Ohio State University where he is an adjunct assistant professor of Biomedical Informatics in the College of Medicine.

Dr Larry Hearld is an Associate Professor and Director of the PhD Program in Administration-Health Services at the University of Alabama at Birmingham. His research focuses on the development and sustainability of interorganizational and interpersonal relationships and their effects on market-, organization-, and patient-level outcomes and the adoption and implementation of health care innovations.

Lorens A. Helmchen is an Associate Professor of Health Policy and Management at The George Washington University, where he teaches health economics and predictive analytics. He studies novel methods of evaluating, communicating, and rewarding hospital and physician performance. He holds a PhD in economics from The University of Chicago.

Dr Amy Yarbrough Landry is an Associate Professor in the Department of Health Services Administration at the University of Alabama at Birmingham and Director for the Master of Science in Health Administration program. Landry's research interests include the strategic behavior of health care organizations, organizational performance, and strategic human resources management.

Dr Deirdre McCaughey is an Associate Professor in the Cumming School of Medicine at the University of Calgary, Canada. Her research examines organizational factors (e.g., systems, leadership, and organizational culture) in health care institutions that influence health care provider and workforce wellness and subsequently optimize organizational quality and patient safety outcomes.

Dr Gwen McGhan is an Assistant Professor in the Faculty of Nursing at the University of Calgary, Canada. Her research focuses on using a person and family-centred care lens to develop tailored interventions that target the needs of older adults, including those living with dementia, and their family caregivers.

Dr Luceta McRoy is formally trained in health services research and has worked at Morehouse School of Medicine as a Research Associate and most recently at Southern Adventist University as a professor. She has a particular research interest in health disparities with focus on chronic diseases such as asthma and cancer.

Bunyamin Ozaydin, PhD, has worked in the Departments of Ophthalmology and Anesthesiology as an informatician for almost a decade. He teaches systems analysis and design, databases, and other data analytics courses. His research interests include data infrastructures enabling data mining and analytics and application of machine learning techniques in health care.

Kunal N. Patel, DrPH, MPH, MDP, Assistant Professor, College of Health and Human Sciences, Northern Illinois University, has traveled in Africa and Asia while working on anti-human trafficking programs and conducting propoor participatory field-based qualitative research surrounding land rights, nutrition and health, and gender equity. Lately, he is contributing directly to strategy, finance, and management for public health policy and health care organizations.

Mark V. Pauly is an American economist whose work focuses on health care management and business economics. He is currently the Bendheim Professor in the Department of Health Care Management at the Wharton School of the University of Pennsylvania.

Dr Jose Quintana is board certified in health care management and has more than 40 years of health care management experience. He is a Lean Six Sigma Black Belt and a Certified Professional in Health care Quality. He has been involved in health care quality improvement since 1991.

Dr Zo Ramamonjiarivelo is an Associate Professor at the School of Health Administration at Texas State University. Her research focuses on the factors associated with the strategic decision-making of health care organizations and the impact of such decisions on organizational performance, health disparities, health care quality, and patient experience.

Michael D. Rosko, PhD, is Emeritus Professor of Health Care Management at Widener University. He is also Adjunct Professor with the University of Pennsylvania Perelman School of Medicine and Visiting Scholar at the University of St. Andrews, Scotland. He is a health economist and has published three books and over 100 articles and book chapters.

Andrew C. Rucks, PhD, MBA, Professor, Associate Dean for Finance and Administration, and Executive Director of the Survey Research Unit, School of Public Health, The University of Alabama at Birmingham, has more than 30 years of academic and business experience. He authored two books, four book chapters, and more than 75 articles and cases.

Gregory I. Sawchyn, as Vice President of Population Health for Sound Physicians, the United States' largest provider participant in bundled payments, leads bundled payment management at sites across the country. Dr Sawchyn is also an experienced health care strategy consultant and investment banker. He completed his MD and MBA at The Ohio State University.

Dr Dean G. Smith's research and teaching provide a better understanding of the financial aspects of working with and in health care delivery and financing organizations. He is the Dean of the LSU School of Public Health and previously held executive positions in managed care organizations.

Dr Robert Weech-Maldonado is a Professor in the Department of Health Services Administration at the University of Alabama at Birmingham. He is a national authority in health disparities, cultural competency tools for health care organizations, racial and ethnic differences in patient experiences with care, and long-term care.

Dr John R.C. Wheeler's research examines investment and financing decisions by health care providers and the effects of payment policies. He is widely published and has served on numerous not-for-profit boards and as a consultant to health care provider and financing organizations.

Dr Amelie Wuppermann, Martin-Luther-University Halle-Wittenberg, Germany, is a Professor of Economics at the Department of Law and Economics in Halle, Germany. Her research focuses on empirical questions in health economics and has been published in PNAS, Medical Care, the Journal of Health Economics and Health Economics, among others.

Dr Ferhat D. Zengul is a certified revenue cycle specialist and has more than a decade-long work and teaching experience in health care finance. His broad research focus is the performance (both clinical and financial) of health care organizations. He is particularly interested in applying machine learning approaches in developing predictive models.

List of Reviewers

Nathan W. Carroll
University of Alabama at Birmingham, Alabama, USA
Megan E. Gregory
The Ohio State University, Ohio, USA
Timothy Hoff
Northeastern University, Massachusetts, USA
Jami L. Jones
Medical University of South Carolina, South Carolina, USA
Sarah R. MacEwan
The Ohio State University, Ohio, USA
Deirdre McCaughey
University of Calgary, Alberta, Canada
Kunal N. Patel
Northern Illinois University, Illinois, USA
Lori T. Peterson
Missouri State University, Missouri, USA
Michael D. Rosko
Widener University, Pennsylvania, USA

Introduction

The Patient Protection and Affordable Care Act (ACA) included changes in health care reimbursement and incentive mechanisms and enhanced public reporting of patient outcomes, patient experience, and Medicare spending per beneficiary. The goal was to radically transform health care organizations by increasing accountability for key performance domains. While what constitutes a fair assessment of performance might be controversial at times, there is an agreement that the health care system, led by the federal government as a dominant payer, needs to solidify the structures and mechanisms that herd health care organizations toward the desired performance goal of delivering cheaper, patient-centered, effective, and error-free care (Al-Amin, Makarem, & Rosko, 2016; Ryan, Krinsky, Maurer, & Dimick, 2017). Two prominent mechanisms include new value-driven reimbursement models and public reporting to increase transparency and inform consumer choice. In this volume, we focus on these mechanisms and on their implications.

Two key stakeholders, simultaneously impacted the most by the goal of high performance and essential for its successful attainment, are health care organizations and consumers. Both stakeholder groups must be equipped with the right tools and incentives to competently play their part in the optimal coproduction of health care services. Health care organizations are incentivized to commit to the goal through constantly evolving reimbursement models such as bundled payments and value-based purchasing (VBP) programs. Public reporting and price transparency, on the other hand, aim at encouraging patient engagement and consumerism in health care by facilitating consumer selection of health care providers with the best performance.

Health care organizations need access to sufficient resources to successfully transform their processes and culture in such a way that ensures better performance. Health care organizations are businesses, and regardless of their ownership status, they need to generate profit in order to sustain their operations, to acquire essential and strategic resources, and to achieve their mission by contributing to their communities (Bazzoli, Chan, Shortell, & D'Aunno, 2000). Factors such as ownership, size, occupancy rates, and advanced technologies are associated with higher profitability (Burkhardt & Wheeler, 2013; Rosko, Goddard, Al-Amin, & Tavakoli, 2018). Further understanding of the factors that influence hospital profitability is imperative as hospitals struggle to achieve their financial goals.

Consumers, despite the abundance of publicly reported data in the United States, are either unaware of data availability or do not rely on publicly reported data to select providers (Sinaiko, Eastman, & Rosenthal, 2012). Transparency in quality, patient experiences, and prices is essential for consumerism to work in health care. However, transparency of data alone, while a baseline requirement, is not sufficient. Consumers have to be aware of what data are available, convinced of their usefulness and applicability, and able to interpret the data when they make health care related choices. Carman, Lawerence, and Siegel (2019) explain consumerism as “people proactively using trustworthy, relevant information and appropriate technology to make better-informed decisions about their health care options in the broadest sense, both within and outside the clinical setting.” Given that transparency in patient outcomes, experiences, and prices is a new shift in the health care industry, it is essential for us to understand what true transparency means and how to optimally use this transparency of data to improve consumer decisions to achieve the desired performance goal of delivering cheaper, patient-centered, effective, and error-free care.

Overview of the Papers in This Volume

The following 10 chapters in the volume seek to provide answers to the outstanding questions about health care system finance and consumerism outlined earlier. The chapters are divided into two sections: “Reimbursement, Cost, and Profitability” and “The Move Toward Transparency.” Employing a variety of research methodologies – including advanced quantitative modeling, systematic literature review, narrative review, and expert commentary from Burns and Pauly – in these chapters, authors explore the impact of transformation in payment and debt structures, profitability, and horizontal or vertical integration on outcomes such as price, clinical outcomes, and health plan selection. Additionally, to explore the trend toward transparency between health care stakeholders (patients, hospitals, insurance companies, the government), section two considers how sharing price and outcomes information can enhance patient and payer choice.

Section I: Reimbursement, Cost, and Profitability

The first four chapters in this volume address the issues of reimbursement, cost, and profitability. These issues are key to understanding how new reimbursement models can serve as a mechanism to achieve the goal of higher performance in health care organizations. The first chapter, by Gascon and Sawchyn, presents a narrative review of the history of bundled payment programs – a mechanism to align payer, provider, and patient incentives. The authors evaluate bundled payment through the lens of agency theory and then postulate the future direction of bundled payments as a key structure in the provision and payment of health services.

The second chapter, by Rosko, uses advanced quantitative modeling to assess the internal and external environmental factors that affect variations in rural hospital profitability. More specifically, the chapter focuses on the impact of the ACA regulations that resulted in the expansion of Medicaid eligibility, as well as four Medicare programs that target rural hospitals. He found that while the Medicaid expansions provided modest help for rural hospitals' financial condition, the impact of the four targeted Medicare programs for rural hospitals was either small or insignificant. This study speaks to the resources at-risk hospitals need in this era of health care transformation. Rural hospital managers cannot rely on current government programs to remedy their long-standing financial problems, but must consider other mechanisms such as system membership, a factor this study found significantly associated with profitability.

The third chapter, by Ramamonjiarivelo, Hearld, Epané, McRoy, and Weech-Maldonado, is a quantitative study of the impact of public hospitals' privatization on community orientation. Their findings suggested that ownership conversion from nonprofit to for-profit increases the likelihood of hospitals engaging in community orientation activities. This surprising finding indicates that conversion to for-profit status indeed has implications for how organizations are serving their local communities. Those proposing new reimbursement models must consider how those models change incentives in the industry to privatize.

The fourth chapter in Section I, by Carroll, Smith, and Wheeler, explores another potential benefit of system membership by addressing the question: “Does system membership help hospitals achieve optimal leverage?” Using propensity score-matched control hospitals, they examined changes in leverage that occurred after independent hospitals joined multihospital systems. This chapter presents the evidence that system membership allows underleveraged hospitals to increase their debt holdings, suggesting that system membership may help not-for-profit hospitals attain an optimal capital structure.

Section II: The Move Towards Transparency

The chapters in Section II explain how transparency in the health care system can serve as a mechanism to motivate health care organizations to achieve the goal of higher performance. The chapters explore transparency via three broad topics: price transparency, market transparency, and quality metric transparency. The first chapter in this section is an expert commentary written by Burns and Pauly that considers the question: “When is medical care price transparency a good thing, and when isn't it?” They propose that any new policies to promote price transparency must take the specific market setting into account. Therefore, they present an analysis of markets characterized by monopolistic, oligopolistic, and competitive conditions to determine when and under what economic and managerial circumstances price transparency will be useful. This chapter concludes with a nuanced answer to that question, which can be summarized as “not always.”

Following this is a chapter by Patel, Rucks, and Ford presenting an analysis of hospital websites to assess compliance with federal regulations requiring hospitals to publish their “standard charges” in a public, machine-readable format. The authors also conducted a sentiment analysis to evaluate the level of consumer-friendliness of the content in terms of language usage. The authors conclude that most hospitals' websites do not present standard charges data in a way that is readily collectable or comparable to other facilities. In fact, the messaging on webpages routinely suggests that consumers not use the data.

Following the discussions on price transparency, Bauhoff, Carman, and Wuppermann provide a chapter about transparency in insurance markets, particularly exploring the role of consumer financial literacy in health plan choice on the ACA insurance marketplaces. They note that while low-income consumers are eligible for subsidies to purchase insurance, whether these consumers can take advantage of the support and make sound decisions about buying health insurance depend on their knowledge and skills in navigating complex financial products. Their analysis of financial literacy across income groups found that among the low-income population eligible for subsidies, financial literacy was low. This finding is important for ongoing health care transparency efforts and points to a need for targeted support to consumers.

The last three chapters in this volume consider transparency of quality metrics. Aydin, Zengul, Quintana, and Ozaydin present a systematic literature review addressing the question: “Does transparency of quality metrics affect hospital care outcomes?” They identified 39 articles that studied the impact of the public release of quality performance data on hospital care outcomes. They documented a growth in health care transparency efforts between 2010 and 2015, with the increasing number of studies over this time period showing mixed results on outcomes positive, negative, and neutral. Next, McCaughey, McGhan, and Landry explore transparency within a hospital and the links to leadership and safety excellence. Their analysis of employee safety culture surveys found that ratings of safety climate leadership factors by hospital support workers – e.g., food and nutrition, environmental services – were related to perceived safety climate, highlighting the need for transparent leadership across the organizations.

In the final chapter in this volume, Helmchen presents an alternative to current health care transparency efforts that tend to mainly focus on posting provider-specific patient outcomes. Noting the same limitations to this type of transparency as previous chapters, he proposes a system of “outcome warranties” in which providers underwrite insurance policies that promptly pay patients a predetermined sum after an adverse outcome. Patients could then use these outcome warranties to infer quality differences among providers. He aims to propose a novel, controversial idea to highlight flaws in the current policy and advance the conversation.

The chapters in Section II all support the claim made by Burns and Pauly in this section's first chapter that price transparency is not always a good thing. It depends on a multitude of contextual factors related to consumer's capabilities and the organization of the information. This section supports the complexity of consumer transparency as a mechanism to reach the goal of high-value health care, and makes a case for future research in this rapidly changing field. This is complementary to Section I, which presents a consideration of how new reimbursement models have transformed the finance of health care organizations. As we offer in our Introduction, health care organizations and consumers are the two key stakeholders simultaneously impacted the most by the goal of high performance and essential for its successful attainment. We hope that health care scholars and practitioners will find this volume of interest.

Jennifer L Hefner

Mona Al-Amin

Editors

References

Al-Amin et al., 2016 Al-Amin, M. , Makarem, S. C. , & Rosko, M. (2016). Efficiency and hospital effectiveness in improving hospital consumer assessment of health care providers and systems ratings. Health Care Management Review, 41(4), 296–305.

Bazzoli et al., 2000 Bazzoli, G. J. , Chan, B. , Shortell, S. M. , & D'Aunno, T. (2000). The financial performance of hospitals belonging to health networks and systems. Inquiry, 234–252.

Burkhardt and Wheeler, 2013 Burkhardt, J. H. , & Wheeler, J. R. (2013). Examining financial performance indicators for acute care hospitals. Journal of Health Care Finance, 39(3), 1–13.

Carman et al., 2019 Carman, K. , Lawerence, W. , & Siegel, J. (2019). The ‘new’ health care consumerism. Health Affairs Blog, March 5. doi:10.1377/hblog20190304.69786.

Rosko et al., 2018 Rosko, M. , Goddard, J. , Al-Amin, M. , & Tavakoli, M. (2018). Predictors of hospital profitability: A panel study including the early years of the ACA. Journal of Health Care Finance, 44(3), 1–23. Retrieved from http://healthfinancejournal.com/index.php/johcf/article/view/148/152

Ryan et al., 2017 Ryan, A. M. , Krinsky, S. , Maurer, K. A. , & Dimick, J. B. (2017). Changes in hospital quality associated with hospital value-based purchasing. New England Journal of Medicine, 376(24), 2358–2366.

Sinaiko et al., 2012 Sinaiko, A. D. , Eastman, D. , & Rosenthal, M. B. (2012). How report cards on physicians, physician groups, and hospitals can have greater impact on consumer choices. Health Affairs, 31(3), 602–611.

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