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The purpose of this paper is to review the literature on hospital mergers and acquisitions (M&As).

The authors conduct a systematic review of the literature on hospital M&As to summarize their effects upon cost of health care delivery (access), efficiency, market power, cost and price. Implications for health care industry policy are provided.

A significant majority of results conclude lower costs, increased efficiency, but higher prices (due to a market concentration effect) following hospital merger or acquisition. These results are consistent with industrial organization theory and suggest that regulatory policy (e.g. price cap regulation) will raise allocative efficiency, consumer surplus and overall market surplus within markets for hospital services.

This is the first study to review the price, cost and efficiency effects of M&As with respect to industrial organization theory in the context of hospitals. This study also provides regulatory policy implications.

The purpose of this paper is to examine the link between service specialization and operational performance in hospitals. Existing literature has mostly been concerned with the performance effects of operational focus, which can be seen as an extreme form of specialization. It is not clear, however, whether an effect similar to the focus effect can be observed also in cases where specialization takes on less extreme forms. The authors analyze this effect up to and above the effects of volume, learning and patient selection.

Ordinary least squares (OLS) and two‐stage regression models were used to analyze patient data from 142 Austrian hospitals over the 2002‐2006 period. The sample contains 322,193 patient groups (841,687 patient group‐year observations).

The authors find that increased specialization in a service leads to a more efficient provision of this service in terms of shorter length of stay. The analysis shows that this effect holds even after controlling for volume, learning, and patient selection effects. The authors suggest that the pure specialization effect is due to the increased administrative and medical attention that is given to a service when the relative importance of that service increases.

The paper's results indicate hospital managers should pay attention to the impact of specialization when making service‐mix decisions. If two services have the same or a similar level of operational performance, then this does not mean that hospital managers should be indifferent as to the relative volume of these services.

The paper provides additional insights into the impact of service‐level specialization not examined in prior literature.

This study investigates the stability of the “hospital effect” on performance over time by administrative health data as a source of evidence. Using 78,907 heart failure adult records from 117 hospitals in the Lombardy Region (Northern Italy) over three years (2010–2012), we analyzed hospital performance in terms of 30-day mortality and 30-day unplanned readmissions to gather evidence about the stability of the “hospital effect.” Best/worst performers were identified through multi-level models that combine both patient and hospital covariates. Our results confirm that managerial choices affect hospital performance, and that the “hospital effect” is not, contrary to expectations, stable over the short term. Performance improvement/worsening over the three years has been also analyzed.

Change in ownership among U.S. community hospitals has been frequent and, not surprisingly, remains an important issue for both researchers and public policy makers. In the past, investor-owned hospitals were long suspected of pursuing financial over other goals, culminating in several reviews that found few differences between for-profit and nonprofit forms (Gray, 1986; Sloan, 2000; Sloan, Picone, Taylor, & Chou, 2001). Nevertheless, continuing to the present day, several states prohibit investor-ownership of community hospitals. Conversions to investor-ownership are only one of six types of ownership change, however, with relatively less attention paid to the other types (e.g., for-profit to nonprofit, public to nonprofit). This study has two parts. We first review the literature on the various types of ownership conversion among community hospitals. This review includes the rate at which conversions occur over time, the relative frequency in conversions between specific ownership categories and the observed effects of conversion on hospital operations (e.g., strategic direction and decision-making processes) and performance (e.g., access, quality, and cost). Overall, we find that the impact of ownership conversion on the different measures is mixed, with slightly greater evidence for positive effects on hospital efficiency. As one explanation for these findings, we suggest that the impact of ownership conversion on hospital performance may be mediated by changes in the hospital's strategic content and process. Such a hypothesis has not been proposed or examined in the literature. To address this gap, we next study the role of strategic reorientation following hospital conversion in a field study. We conceptualize ownership conversion within a strategic adaptation framework, and then analyze the changes in strategy content and process across sixteen hospitals that have undergone ownership conversions from nonprofit to for-profit, public to for-profit, public to nonprofit, and for-profit to nonprofit. The field study findings delineate the strategic paths and processes implemented by new owners post-conversion. We find remarkable similarity in the content of strategies undertaken but differences in the process of strategic decision making associated with different types of ownership changes. We also find three main performance effects: hospitals change ownership for financial reasons, experience increases in revenues and capital investment post-conversion, and pursue labor force reductions post-conversion. Membership in a multi-hospital system, however, may be a major determinant of both strategy content and decision-making process that is confounded with ownership change. That is, ownership conversion may mask the impact of system membership on a hospital's strategic actions. These findings may explain the pattern of performance effects observed in the literature on ownership conversions.

The objective of this chapter is to introduce the reader to Spatial Health Econometrics (SHE). In both micro and macro health economics there are phenomena that are characterised by a strong spatial dimension, from hospitals engaging in local competitions in the delivery of health care services, to the regional concentration of health risk factors and needs. SHE allows health economists to incorporate these spatial effects using simple econometric models that take into account these spillover effects. This improves our understanding of issues such as hospital quality, efficiency and productivity and the sustainability of health expenditure of regional and national health care systems, to mention a few.

This study aims to reveal the mediating role of patient satisfaction on the impact of relationship marketing on hospital loyalty.

The scale questionnaires used in the study was the Relationship Marketing, Hospital Loyalty and the Patient Satisfaction Scale. The population of the study is made up of the patients who received in-hospital services in private hospitals operating in Kocaeli province. The field study was conducted between August 1 and October 31, 2019. After determining the sample size, the study was conducted on 401 patients in private hospitals primarily using the purposive sampling method. Descriptive statistics, correlation analysis and statistical package for the social sciences Process Macro were used to analyze the data.

According to the findings of this study, patient satisfaction has an effect on hospital loyalty. Relationship marketing has an impact on hospital loyalty, and this effect is further enhanced by patient satisfaction. In other words, patient satisfaction has a mediating role in the impact of relationship marketing on hospital loyalty. Relationship marketing plays an important role in creating hospital loyalty and patient satisfaction. For this reason, it is recommended that health institutions adopt relationship marketing practices. Hospital loyalty and patient satisfaction will be ensured through relationship marketing. This will allow the health-care institution to continue to exist and to be more advantageous than other institutions.

The uniqueness of the paper lies not only in the only regression findings but also in the methodology used to capture the impact of the lagged effect of marketing relationships on hospital loyalty. Specifically, a regression model is based on both direct and indirect effects.

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.

Purpose – This chapter discusses the relationship between health insurance and hospitals’ decisions to adopt medical technologies. I focus on both how the extent of insurance coverage can increase incentives to adopt new treatments, and how the parameters of the insurance contract can impact the types of treatments adopted.

Methodology/approach – I provide a review of the previous theoretical and empirical literature and highlight evidence on this relationship from previous expansions of Medicaid eligibility to low-income pregnant women.

Findings – While health insurance has important effects on individual-level choices of health care consumption, increases in the fraction of the population covered by insurance has also been found to have broader supply side effects as hospitals respond to changes in demand by changing the type of care offered. Furthermore, hospitals respond to the design of insurance contracts and adopt more or less cost-effective technologies depending on the incentive system.

Research limitations/implications – Understanding how insurance changes supply side incentives is important as we consider future changes in the insurance landscape.

Originality/value of paper – With these previous findings in mind, I conclude with a discussion of how the Affordable Care Act may alter hospital technology adoption incentives by both expanding coverage and changing payment schemes.

The present study conceptualizes total quality management (TQM) in terms of soft and hard aspects and examines their effects on quality performance and patient satisfaction. The indirect effects of soft and hard TQM on patient satisfaction through quality performance are also investigated.

A multi-item questionnaire was prepared to gather primary data from a sample of 312 medical employees in private hospitals in Jordan. The measurement model was evaluated for validity and reliability and determined to be acceptable. Structural equation modeling (SEM) was applied to test the research hypotheses.

The results revealed that soft TQM has a strong positive effect on quality performance and patient satisfaction. Hard TQM was found to positively affect quality performance but to a lesser extent compared to soft TQM. The effect of hard TQM on patient satisfaction, meanwhile, was not significant. Quality performance positively mediated the relationship between TQM – both soft and hard – and patient satisfaction.

This study is one of the first to conceptualize TQM in terms of soft and hard aspects in a health care context. It offers valuable insights for managers of private hospitals looking to enhance quality performance and patient satisfaction. The results reveal that soft TQM is the primary driver of quality performance and patient satisfaction in the health care context, which is in stark contrast to the manufacturing sector.

The purpose of this research is to examine the impact of perceived service quality (PSQ) on the behavioural intention (BI) of patients in Indian government hospitals. The underlying mechanism of trust and patient satisfaction (SAT) is examined as multiple mediating effect.

Data from 510 respondents were collected using structured questionnaires. Six government hospitals, namely, S.M.S. Hospital, J.L.N. Hospital, New Medical College Hospital, Maharana Bhupal Medical Hospital, Mathuradas Hospital and P.B.N. Hospital, were selected from the cities of Jaipur, Ajmer, Kota, Udaipur, Jodhpur and Bikaner, respectively. The data were collected from adult patients (>18 years old) who spent at least two nights in a government hospital between 1 October, 2020 and 30 December, 2020. PSQ formed as a reflective-formative model was analysed using the repeated indicator approach. Structural equation modelling (SEM) using SMART-PLS software was used to test the hypothesised model(s) derived deductively from literature.

The findings support the following conclusions: (1) the positive relationship between PSQ and BI is significant; (2) SAT mediates the PSQ and BI relationship; (3) trust mediates the PSQ and BI relationship; (4) the mediation effect of SAT is stronger than that of trust.

The results indicate that, in order to enhance the positive BI of patients towards government hospitals, it is necessary for the hospitals to work on strategies to enhance the service quality provided to patients. The outcome of this study will enable state government hospitals to get a better understanding of the different dimensions of service quality and will help in observing the factors that contribute to patients' satisfaction and trust in building long-term relationships by encouraging a positive BI.

There is a dearth of research in India that evaluates the relationships between the constructs PSQ, trust, BI and SAT in the context of healthcare service. This empirical study is an attempt to fill this gap by focussing on the government hospitals in India.