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The purpose of this study is to investigate how two types of drivers, namely, executive compensation and market competition, can affect hospital quality in the USA. Recently, patients, insurers and regulators have increasingly focused on hospital quality. Understanding the interplay of incentives in this industry is important because in 2019, hospital treatment contributed $1.161bn to health-care costs in the USA. This study answers the call for more studies in the so-called “mixed” industry, where ownership differences can affect organizational objectives and operating constraints.

This study explores the roles of hospital executive compensation and industry competition as determinants of health-care quality. Specifically, the study probes the heterogeneity in the factors that influence quality across hospital types in the USA.

Using California hospital data from 2006 through 2020, the findings show that the effects of compensation and competition on hospital quality differ by ownership type. Executive compensation is positively associated with quality in for-profit hospitals but is not associated with that of nonprofit hospitals, suggesting for-profit hospitals are more likely to use higher levels of compensation to attract managers with higher ability, whereas the utility function for nonprofit managers may be multidimensional. Within the nonprofit hospital group, competition is more positively associated with quality for religious nonprofits relative to secular nonprofits, suggesting that competition provides more monitoring for religious hospitals.

Taken together, the findings provide evidence that the drivers of quality vary across hospitals in ways consistent with differences in constraints and objectives across ownership types. The findings are important for regulators seeking to incentivize higher quality. For example, Medicare in the USA has incorporated quality measures into its new hospital reimbursement scheme (value-based purchasing) to incentivize quality. This study proposes that regulators should consider differences across ownership types when evaluating the best ways to incentivize hospital quality.

This research aims to explore the fine-grained relationships between nurse staffing and hospital operational performance with respect to care quality and operating costs. The authors also investigate the moderation effect of competition in local hospital markets on these relationships.

A six-year panel data is assembled from five separate sources to obtain information of 2,524 USA hospitals. Fixed-effect (FE) models are used to test the proposed hypotheses.

First, nurse staffing is initially associated with improved care quality until nurse staffing reaches a turning point, beyond which nurse staffing is associated with worse care quality. Second, a similar pattern applies to the relationship between nurse staffing and operating costs, although the turning point is at a much lower nurse staffing level. Third, market competition moderates the relationship between nurse staffing and care quality so that the turning point of nurse staffing will be higher when the degree of competition is higher. This shift of turning point is also observed in the relationship between nurse staffing and operating costs.

The study identifies three ranges of nurse staffing in which hospitals will likely experience simultaneous improvements, a tradeoff or simultaneous decline of care quality and operating costs when investing in more nursing capacity. Hospitals should adjust nurse staffing levels to the right directions to achieve better care or reduce operating costs.

Nurses constitute the largest provider group in hospitals and profoundly impact care quality and operating costs among all health care professionals. Optimizing the level of nurse staffing, therefore, can significantly impact the care quality and operating costs of hospitals.

Hospitals are complex organisations accounting for most of total health expenditure. They play a critical role in providing care to patients with high levels of need. A key policy concern is that patients receive high quality care. Policymakers have attempted to influence hospital quality in different ways. This chapter focuses on three key policy levers: the extent to which hospital competition and higher hospital tariffs (of the DRG type) can stimulate quality, and whether non-profit hospitals provide higher or lower quality than for-profit ones. The chapter outlines key methodological challenges and selectively reviews the main findings from the literature. While several studies suggest that hospital competition reduces mortality rates for heart attack cases when hospital tariffs are fixed (under a DRG system), at this stage is unclear whether the effect holds across a range of quality indicators. Moreover, the limited literature on hospital mergers tends to suggest that hospital quality does not change following a merger. Finally, whether non-profit hospitals provide higher or lower quality varies across regions and institutional arrangements. The economic theory suggests several mechanisms with opposite effects on quality. To guide policy, future work needs to further unpack the various mechanisms through which these three key policy issues affect hospitals incentives.

The health care industry has been influenced by changes in the market structure and new technological developments during the recent decades. With the new technological developments in medicine, some less complex care moved out of the hospitals that led to decrease in demand for inpatient services. This recent change in hospital care created excess capacity in hospital markets, and therefore hospitals started to explore potential financial gains through horizontal consolidations. This has resulted in a wave of mergers in 1990s, which transformed the US, Canadian and European hospital markets. This, in turn, created concerns among policy makers and researchers in terms of its welfare implications.

Identifying the perception of competition between public and private providers in the national hospital market can help authorities to develop appropriate management strategies applicable to the hospital sector and increase the efficiency of public hospital institutions.

A mixed selective descriptive study including quantitative and qualitative components was carried out on in the Republic of Moldova between 12/2021 and 03/2022. The study included all hospitals in the country. The study revealed the hospital manager's perception of the hospital's competition as respondents to the questionnaire were only the directors and managers of hospital institutions. The concept of evaluation of the perception of competition was carried out through the lens of “Porter's 5 forces” from “Competitive strategies” by Michael E. Porter. The authors used a questionnaire as an instrument for studying the perception of competition. All study participants responded to both the quantitative and qualitative questionnaire.

Interhospital competition perceived by managers using model framework of “Porter's 5 forces” reveals high danger from service providers and high perception of rivalry; hospital directors perceived as low: the patient's bargaining power; the danger of new competitors entering the market; the danger of substitution, which constitutes competitive advantages; the lack of autonomy in the selection of services and patients and legislative barriers are the main perceived dissensions. The perception of competition between public and private hospitals is one with high rivalry, especially in the country's municipalities.

The national public hospital system takes up to 65% of the health budget being extremely expensive, a fact that indicates a rather low competitiveness of them. The European average indicates figures of 30–40%. The private hospital sector is less developed compared to most European countries, being represented by 17 institutions, in comparison Romania has 104 private hospitals representing about 25% of the market share. Private hospitals also occupy a considerable part of the European hospital healthcare market, continuing to increase, reaching over 30% in Germany.

This study aims to map perceptions and changes in public hospitals in response to competition with the private health system, describes solutions adopted by the public hospitals and considers their implications for the business and strategic management of those hospitals.

This paper opted for a qualitative study using the open-ended approach of grounded theory, including 40 in-depth interviews with key figures in the health system and administrators at various levels of management.

Public hospitals are constantly adopting changes because of state-mandated reforms and growing competition with private hospitals. Notable measures include making hospitals customer-oriented and adopting business-oriented behaviors and competitive and marketing strategies. However, because public hospitals are unable to institute radical changes, they typically introduce hybrid services (private services within public services) and other creative solutions such as business-funded research foundations operating alongside them.

The main methodological limitation of this study was the difficulty in obtaining data because of the limited cooperation and lack of transparency of Israel’s health-care system. The interviewees expressed concerns that their department or hospital would appear in a negative light, especially as motivated solely by financial considerations. In anticipation of this difficulty, requests for participation were addressed individually and contained extensive detail regarding the study, the ethics committee’s approval, the data gathering and the strict maintenance of anonymity and confidentiality.

Adopting business-oriented behaviors in public hospitals is somewhat contrary to the principles of public medicine. Their adaptation to the market is partial, and their creative hybrid solutions require state regulation. The absence of controls leads to duplication and waste, causing various problems, including increased social inequality, costs and deficits.

Purpose – The aim of this paper is to examine the diffusion of a new surgical procedure with lower per-case cost and how its diffusion path is affected by the simultaneous introduction of a new drug class that may be an effective treatment to prevent surgery. In particular, we examine whether a process of technology substitution exists that influences the diffusion process of the surgical technology. Given their different cost implications, the interaction of these two different technologies, surgery and drug intervention, is relevant from the perspective of health expenditure. This is of particular interest in health care as technology adoption and diffusion has been cited as a major driver of expenditure growth. Such expenditure growth has been increasingly targeted through the use of market-orientated policy tools aimed at increasing efficiency. Our research is thus addressing the question of how economic incentives influence the diffusion process and we discuss the impact of a set of incentives on hospital behavior.

Design/methodology – Hospital admission data for the financial years 1998/1999 to 2007/2008 in England are used to empirically test the contribution of prescription uptake and market-oriented reforms. Dynamic panel data models are used to capture any changes in technology preference during the period of study.

Findings – Our results suggest that the hospital sector exhibits a strong new technology preference, tempered by the interaction of competition for patients and the ability of the primary care sector to substitute treatments.

Value/originality – Given the current fast technological change, we examine the technological race occurring in the health care sector. We account simultaneously for the diffusion of different technologies not only within the same typology but also with technologies of a different class.

This paper empirically tests whether the nonprofit hospital is influenced by the community benefit standard by analyzing differences in nonprofit and for-profit hospital inpatient Medicaid share, while controlling for the effects of hospital market competition. Hospital specific data for this study are from the 1991 American Hospital Association Annual Survey of Hospitals and the 1991 Medicare Minimum Cost Report by the Health Care Financing Administration. The sample includes 192 for-profit, 899 nonprofit and 221 government-owned general acute care hospitals. Key variables in the multivariate analysis include hospital inpatient Medicaid share as the dependent variable and Medicaid demand, market competition and input quality as independent variables. The principal findings are that nonprofit hospitals serve a larger share of Medicaid inpatients than for-profit hospitals although the greater the presence of for-profit hospitals in the market (one measure of market competition) the smaller the nonprofit hospital Medicaid share. It is concluded that nonprofit hospitals reduce their level of community benefit, where community benefit is measured as a hospital's percent Medicaid share, in markets with a greater presence of for-profit hospitals.

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

Procurement professionals widely use purchasing portfolio models to tailor purchasing strategies to different product groups’ needs. However, the application of these approaches in hospitals and the impact of a pandemic shock remain largely unknown. This paper aims to assess hospital purchasers’ procurement strategies during the COVID-19 pandemic, the effects of factor-market rivalry (FMR) on strategies and the effectiveness of purchasing portfolio categorizations in this situation.

This qualitative study of hospital purchasing in the Netherlands is supported by secondary data from official government publications. Semi-structured interviews were conducted with 13 hospital purchasers at large hospitals. An interpretative approach is used to analyze the interviews and present the results.

The findings reveal that product scarcity forces purchasers to treat them as (temporary) bottleneck items at the hospital level. The strategies adopted largely aligned with expected behavior based on Kraljic’s commodity management model. Adding the FMR perspective to the model helped to further cluster crisis strategies into meaningful categories. Besides inventory management, increasing supply, reducing demand and increasing resource coordination were the other common strategies. An important finding is that purchasers and governments serve as gatekeepers in channeling FMR, thereby reducing potential harmful competition between and within hospitals.

The devastating experience of the COVID-19 pandemic is unveiling critical weaknesses of public health-care provision in times of crisis. This study assesses the strategies hospital purchasers apply to counteract shortages in the supply chain. The findings of this study emphasize the importance of gatekeepers in times of crisis and present strategies purchasers can take to assure the supply of resources.

No research has been conducted on purchasing portfolio models and FMR implications for hospitals during pandemics. Therefore, the authors offer several insights: increasing the supply risk creates temporary bottleneck strategies, letting purchasers adopt a short-term perspective and emphasizing the high mobility of commodities in the Kraljic commodity matrix. Additionally, despite more collaboration uncovered in other studies regarding COVID-19, strong rivalry arose at the beginning of the pandemic, leading to increased competition and less collaboration. Given such increased FMR, procurement managers and governments become important gatekeepers to balance resource allocation during pandemics both within and between hospitals.