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Researchers recommend a reorganization of the medical profession into larger groups with a multispecialty mix. We analyze whether there is evidence for the superiority of…
Researchers recommend a reorganization of the medical profession into larger groups with a multispecialty mix. We analyze whether there is evidence for the superiority of these models and if this organizational transformation is underway.
We summarize the evidence on scale and scope economies in physician group practice, and then review the trends in physician group size and specialty mix to conduct survivorship tests of the most efficient models.
The distribution of physician groups exhibits two interesting tails. In the lower tail, a large percentage of physicians continue to practice in small, physician-owned practices. In the upper tail, there is a small but rapidly growing percentage of large groups that have been organized primarily by non-physician owners.
While our analysis includes no original data, it does collate all known surveys of physician practice characteristics and group practice formation to provide a consistent picture of physician organization.
Our review suggests that scale and scope economies in physician practice are limited. This may explain why most physicians have retained their small practices.
Larger, multispecialty groups have been primarily organized by non-physician owners in vertically integrated arrangements. There is little evidence supporting the efficiencies of such models and some concern they may pose anticompetitive threats.
This is the first comprehensive review of the scale and scope economies of physician practice in nearly two decades. The research results do not appear to have changed much; nor has much changed in physician practice organization.
Purpose – Research on hospital system organization is dated and cross-sectional. We analyze trends in system structure during 2000–2010 to ascertain whether they have…
Purpose – Research on hospital system organization is dated and cross-sectional. We analyze trends in system structure during 2000–2010 to ascertain whether they have become more centralized or decentralized.
Design/Methodology/Approach – We test hypotheses drawn from organization theory and estimate empirical models to study the structural transitions that systems make between different “clusters” defined by the American Hospital Association.
Findings – There is a clear trend toward system fragmentation during most of this period, with a small recent shift to centralization in some systems. Systems decentralize as they increase their members and geographic dispersion. This is particularly true for systems that span multiple states; it is less true for smaller regional systems and local systems that adopt a hub-and-spoke configuration around a teaching hospital.
Research Limitations – Our time series ends in 2010 just as health care reform was implemented. We also rely on a single measure of system centralization.
Research Implications – Systems that appear to be able to centrally coordinate their services are those that operate in local or regional markets. Larger systems that span several states are likely to decentralize or fragment.
Practical Implications – System fragmentation may thwart policy aims pursued in health care reform. The potential of Accountable Care Organizations rests on their ability to coordinate multiple providers via centralized governance. Hospitals systems are likely to be central players in many ACOs, but may lack the necessary coherence to effectively play this governance role.
Originality/Value – Not all hospital systems act in a systemic manner. Those systems that are centralized (and presumably capable of acting in concerted fashion) are in the minority and have declined in prevalence over most of the past decade.
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…
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 research analyzes good practices in health care “management experimentation models,” which fall within the broader range of the integrative public–private partnerships…
The research analyzes good practices in health care “management experimentation models,” which fall within the broader range of the integrative public–private partnerships (PPPs). Introduced by the Italian National Healthcare System in 1991, the “management experimentation models” are based on a public governance system mixed with a private management approach, a patient-centric orientation, a shared financial risk, and payment mechanisms correlated with clinical outcomes, quality, and cost-savings. This model makes public hospitals more competitive and efficient without affecting the principles of universal coverage, solidarity, and equity of access, but requires higher financial responsibility for managers and more flexibility in operations.
In Italy the experience of such experimental models is limited but successful. The study adopts the case study methodology and refers to the international collaboration started in 1997 between two Italian hospitals and the University of Pittsburgh Medical Center (UPMC – Pennsylvania, USA) in the field of organ transplants and biomedical advanced therapies.
The research allows identifying what constitutes good management practices and factors associated with higher clinical performance. Thus, it allows to understand whether and how the management experimentation model can be implemented on a broader basis, both nationwide and internationally. However, the implementation of integrative PPPs requires strategic, cultural, and managerial changes in the way in which a hospital operates; these transformations are not always sustainable.
The recognition of ISMETT’s good management practices is useful for competitive benchmarking among hospitals specialized in organ transplants and for its insights on the strategies concerning the governance reorganization in the hospital setting. Findings can be used in the future for analyzing the cross-country differences in productivity among well-managed public hospitals.
The purpose of this paper is to understand one aspect of electronic health record adoption by studying the impact of policy interventions on the adoption among hospitals…
The purpose of this paper is to understand one aspect of electronic health record adoption by studying the impact of policy interventions on the adoption among hospitals, physicians and patients, using a system dynamics simulation model.
A system dynamics simulation model of the existing distribution network was built. Policy experiments were conducted to compare the performance of each.
Using data from the Greater Capital Region, Northern New York State, the findings from the simulation experiments suggest that while there is no single right intervention, a combination of measures can promote the adoption of electronic health records by different stakeholders.
The results are based on simplified operational and structural assumptions regarding the diffusion of electronic health records among stakeholder groups. Some of the variables are based on theoretical rather than quantifiable values.
The results of this study have practical implications when it comes to designing effective policies to improve the adoption rate of electronic health records. The theoretical contribution will help stakeholders to take leadership roles in policy discussion.
This paper is a theoretical study describing a unique application of simulation methods to an important area of application. Use and evaluation for model‐based approaches could provide additional insight about the potential value of simulation for social learning and effective approaches to making public policy decisions.
Examines the current literature on total quality management/continuous quality improvement (TQM/CQI) in the health‐care industry and determines the common threads that…
Examines the current literature on total quality management/continuous quality improvement (TQM/CQI) in the health‐care industry and determines the common threads that exist in the successfully implemented programmes. Based on the review of literature, proposes a comprehensive model on how to implement and maintain a TQM/CQI programme in the health‐care industry.
This paper investigates how hospital work environments and manager behavior influence nurses' responses when faced with unexpected problems, or exceptions. Data from a…
This paper investigates how hospital work environments and manager behavior influence nurses' responses when faced with unexpected problems, or exceptions. Data from a qualitative study involving 239 hours of observation of 26 hospital nurses at nine hospitals suggest that exceptions occur frequently and that the work design of hospital nurses leads them to respond to exceptions through first-order problem solving, addressing only immediate symptoms without attempting to alter underlying causes. This pattern of behavior contrasts with recommended approaches found in the quality improvement literature (Ackoff, 1978; Deming, 1986; Juran, Godfrey, Hoogstoel & Schilling, 1999; Kepner & Tregoe, 1976). An implication of our findings is that health care managers may need to tailor front line quality improvement processes to meet the demands of the health care delivery environment — in which exceptions are so frequent as to be considered virtually routine — rather than expecting health care workers to engage in quality improvement practices developed for work environments with different characteristics. Building on empirical observations from our study, we draw from two literatures — healthcare management and organizational behavior — to develop a model of problem solving behavior by hospital nurses. The model proposes that nurse manager coaching, support, and proficiency, together with features of the organizational context — training, self management, work design, group norms, and reward interdependence — influence nurses' problem solving behavior through the mediating variable of nurse cognition (psychological safety and motivation). The use of a problem solving coordinator moderates the problem-solving behavior's impact on performance outcomes.