Search results

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.

This chapter investigates whether signing more hospital contracts with Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), hospital affiliation in a system, having more system hospital members located in the same area, and increased competition from area hospitals, contributes to improvements in the cost efficiency of U.S. Midwestern hospitals. Hospitals may offer HMOs and PPOs discounts on contracts to provide health care services to firm employees enrolled in HMOs and PPOs (discounts would lead to smaller price mark-ups over costs for hospital services). Enacting policies to enhance cost efficiency may help hospitals maintain a specified level of profits.

Over the last decade, the United States (US) hospital industry has become increasingly consolidated through the formation of multi-hospital health systems and networks and the legal merger of institutions under a single license. In relation to the former, health networks are strategic alliances or contractual affiliations of hospitals, in which affiliated institutions retain their individual ownership. Health systems, on the other hand, typically own and operate a core set of hospitals that offer an array of services and products. In many markets across the country, there are now only three to five hospital organizations in operation, after one accounts for their combined ownership or network affiliations.

The purpose of this paper is to present the contemporary understanding and emerging structural models of organisational governance of public hospitals in order to provide evidence-based guidance to countries that are reforming their public hospital governance structures in line with best practice.

The paper uses the structural dimension of Cooper, Fusarelli and Randall’s policy model and institutional theory to review the legislative frameworks of four model countries supported by extant literature.

The paper conceptually distinguishes health system governance and organisational governance in the health system. It further visualises the emerging alternative legislative models of organisational governance and a hierarchy of governors applicable to public hospitals.

The paper provides critical knowledge for understanding organisational governance within health system governance framework and develops tools that can be used in reforming institutional mechanism of organisational governance of public hospitals.

The hospital industry is again experiencing a wave of consolidation as formerly independent hospitals are acquired by multihospital systems. The effects of these consolidations on operating costs and care quality have been researched extensively. However, in addition to these benefits, many hospitals also hope that joining a multihospital system will improve their access to capital. Improved access to capital could be a particularly important benefit for independent, not-for-profit (NFP) hospitals because these hospitals face capital constraints since they lack access to publicly issued equity. Despite being an often-cited benefit of system membership, access to capital has received little attention from researchers. We draw on financial theory to identify several mechanisms through which system membership might improve access to capital for acquired NFP hospitals. We develop and test hypotheses using data from an earlier period of hospital consolidation during which hospitals were even more financially constrained than they are at present. Using propensity score matched control hospitals, we examine changes in leverage that occurred after independent hospitals joined multihospital systems. We find evidence that system membership allows under-leveraged hospitals to increase their debt holdings, suggesting that system membership may help NFP hospitals attain an optimal capital structure.

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.

To investigate the effects of payor–provider integration on the operational performance of health service provision. The research explores whether integration governs agency problems and tilts the incentives of diverse actors toward more systematic outcomes.

A two stage multimethod case study of occupational health services. A qualitative stage aimed to understand the reasons, mechanisms, and outcomes of payor–provider integration. A quantitative stage evaluated the performance of the integrated hospital against fee-for-service partner hospitals with a sample of 2,726 patients.

Payor–provider integration mitigates agency problems on multiple levels of the service system by complementing formal governance mechanisms with informal mechanisms. Compared to partner hospitals, the integrated hospital yielded 9% lower the total costs of occupational injuries achieved primarily by emphasizing conservative care and faster recovery.

Focuses on occupational health services in Finland. Provides initial evidence of the effects of payor–provider integration on the operational performance.

Vertical integration may provide systematic outcomes but requires mindful implementation of multiple mechanisms. Rigorous change management initiative is advised.

For patients, the research shows payor–provider integration of health services can be implemented in a manner that it reduces care costs while not compromising care quality and customer satisfaction.

This study provides a rare longitudinal analysis of payor–provider integration in health-care operations management. The study adds to the knowledge of operational performance improvement of health services.

Health-care delivery organizations (hospitals) constitute a complex adaptive system; hence, a contingency perspective is imperative to guide the design of customized approaches to quality management in different health-care settings. Accordingly, this paper aims to propose a contingency framework to advance the understanding of the relationship between situational factors and effectiveness of quality approaches in health-care organizations (HCOs), such as hospitals in India.

Related literature was reviewed to identify existing research and theories related to quality and quality approaches, situational factors of the HCOs (hospitals) and some existing logical evidence on public and private hospitals in India. Then a contingencies framework for quality and quality approaches was conceptualized.

This paper proposes contingent determinants arise out of conceptualization of the HCOs (hospitals) from different system perspective such as rational system, natural system, open system and integrative system; uncertainty because of physicians’ behaviour, nurses’ approach and a dual line of authority; and the task environment such as patients, competition and economic pressure. These determinants represent situational constructs to the quality enhancement of any attempt at quality approaches. While these determinants have an influence on the quality and quality approaches of the HCOs (hospital), it is imperative to build any quality improvement strategy to work effectively, i.e., quality approach is dependent on determinants of the contingencies of the hospital’s environment, be it external or internal. Propositions for future research are also incorporated.

This paper proposes a conceptual model as well as research propositions that need to be validated and confirmed empirically. It advances the research and theory related to quality and quality approaches in a health-care setting. It can enable policymakers, hospital managers to analyze and gauge the appropriateness of quality approaches in a given context before implementing them and could help to improve the introverted quality approaches and quality dimensions currently followed in HCOs (hospitals).

Contingency framework is a new approach for research on the effectiveness of quality approaches in hospitals. The fundamental idea behind this framework is that effectiveness of quality approaches can be understood best by examining its contingent determinants. Thus, it has the capacity to contribute to the efforts of government and policymakers to make the quality of care affordable to all in India. Essentially, we examine the contexts and variables that determine the effectiveness of quality approaches.

This paper develops and tests a descriptive model of management accounting system choice through an empirical analysis of the adoption of innovative cost accounting systems in not-for-profit hospitals. The logistic regression analysis indicates that management accounting system design is impacted by organi zational objectives, technological complexity, and other features of the organizational control system. Descriptive statistics indicate limited use of management accounting techniques common in manufacturing firms, such as standard costing and variance analysis. A cross-lagged model suggests that implementation of an innovative management accounting system may be causally linked to decreasing operating costs.

This special “Anbar Abstracts” issue of Journal of Management in Medicine is split into 6 sections covering abstracts under the following headings: General Management; Personnel and Training; Quality in Health Care; Health Care Marketing; Financial Management; and Information Technology.