Are community health centers' chief executive officers' compensation related to clinical performance?

BACKGROUND: Most research of chief executive officer (CEO) compensation in the health care industry has been limited to hospitals. This study expands our knowledge of CEO compensation into the nonhospital areas of the industry, specifically community health centers (CHCs). CHCs are safety-net providers that are an integral part of the U.S. health delivery system for medically underserved populations. Since the passage of the Patient Protection and Affordable Care Act, the federal government has created financial incentives for CHCs to improve care through access and quality performance criteria. To promote quality improvement, CEOs need to set their organization's priorities. One method used to achieve this goal is to tie the CEO's compensation to the organization's quality performance. However, there is a gap in our knowledge if CHCs' CEOs compensation is associated with quality performance outcomes. PURPOSE: The primary aim of this study was to examine the relationship between clinical performance and CEO compensation in CHCs. METHODS/APPROACH: Agency, social comparison, and managerial power theories guided this research, which examines the relationship of clinical performance and CEO compensation. Secondary data on Uniform Data System's CHC clinical performance combined with CEO compensation from Internal Revenue Service Form 990 were analyzed using generalized estimating equations with state and year fixed effects on a national sample of section 330 grant-funded CHCs (N = 984) for the period 2011-2016. RESULTS: We found no evidence that clinical performance was associated with CHCs' CEO compensation. Except for race, all other CEO characteristics were positively associated with CEO compensation and in line with previous research. We found that non-White CEOs were compensated more than White CEOs. In addition, further subanalyses revealed that an increase in the highest paid employees' compensation was associated with an increase in CEO compensation. PRACTICE IMPLICATIONS: The findings of this study can assist Health Resources and Services Administration improve its assessment policies in funding allocation to CHCs, as well as help board members make informed decisions regarding tying CEO compensation to predetermined performance metrics.

Patient Engagement Functionalities in U.S. Hospitals: Is Early Adoption Associated With Financial Performance?

EXECUTIVE SUMMARY: U.S. hospitals are in various stages in their adoption of health information technology (HIT) with patient engagement functionalities. The Health Information Technology for Economic and Clinical Health Act of 2009 allocated $30 billion to incentivize the adoption and use of HIT. This study aims to identify hospital characteristics of early patient engagement functionality adoption and compare the financial performance of groups of hospitals that offer these functionalities according to Rogers' adopter categories. The combined data from the American Hospital Association Annual Survey and Information Technology Supplement, Centers for Medicare & Medicaid cost reports, and Health Resources & Services Administration Area Health Resource Files from 2008 to 2013 yielded a sample of 696 unique acute care hospitals. Three adopter categories-early adopters, early majority, and late majority-were created. Generalized estimating equations were used to examine the financial performance (operating margin, return on assets, total margin, operating expenses, revenue per inpatient day) across the adopter types. Compared to early adopter hospitals, operating margins were lower for early majority hospitals (ß = -.407, p < .05) and late majority hospitals (ß = -.608, p < .05). Moreover, compared to early adopter hospitals, late majority hospitals exhibited significantly lower operating revenue (ß = -.087, p < .01) and operating expenses (ß = -.064, p < .01) per inpatient day. No significant relationships were observed when comparing these groups based on total margin and return on assets. Hospital administrators should consider the positive financial outcomes associated with early adoption of patient engagement functionalities in the decision-making process.

Hospital budget increase for information technology during phase 1 meaningful use.

Federal policies have a significant effect on how businesses spend money. The 2009 HITECH (Health Information Technology for Economic and Clinical Health Act) authorized incentive payments through Medicare and Medicaid to clinicians and hospitals when they use certified electronic health records privately and securely to achieve specified improvements in care delivery. Federal incentive payments were offered in 2011 for hospitals that had satisfied "meaningful use" criteria. A longitudinal study of nonfederal hospital information technology (IT) budgets (N = 493) during the years 2009 to 2011 found increases in the percentage of hospital annual operating budgets allocated to IT in the years leading up to these federal incentives. This increase was most pronounced among hospitals receiving high proportions of their reimbursements from Medicaid, followed by hospitals receiving high proportions of their reimbursements from Medicare, possibly indicating a budget shift during this period to more IT spending to achieve meaningful-use policy guidelines.

Health Information Technology Adoption and Clinical Performance in Federally Qualified Health Centers.

A national sample (N = 982) of federally qualified health centers (FQHCs) for the period 2011-2016 was examined regarding the relationship between the age and extent of health information technology (HIT) use and clinical performance. We found that each additional year of HIT use was associated with an approximate 4 percent increase in both process and outcome measures of clinical performance. Furthermore, FQHCs that fully adopted HIT had 7 percent higher clinical performance on hypertension control than those that did not adopt HIT. This study's findings can assist stakeholders to make informed decisions for improving care and sustaining a competitive advantage.

Best of breed strategies--hospital characteristics associated with organizational HIT strategy.

We identify the frequency at which various IT management strategies (e.g., best of breed, best of suite, or singlevendor solutions) are pursued in U.S. hospitals. We also examine hospital characteristics that are associated with pursuing one strategy over another. After combining several secondary data sources, 3343 hospitals were analyzed. Of these, 61 percent indicated a single vendor; 29 percent indicated a best-of-suite; and 10 percent suggested a best-of-breed strategy. In multivariate models, single-vendor strategies were most common among hospitals that were small, stand-alone, for-profit, non-teaching and/or non-JCAI accredited. Best of breed strategies were most common among system affiliated and JCAHO accredited hospitals; and best-of-suite IT strategies were most common among very large, system affiliated, teaching and JCAHO-acccredited hospitals. These findings enable hospital leaders to compare strategies with their peers. Moreover, IT vendors can identify the types of hospitals that would most likely benefit from their products or services.

The association between patient engagement HIT functionalities and quality of care: Does more mean better?

OBJECTIVE: To explore the relationship between the number (breadth) of patient engagement functionalities offered through health information technology (HIT) by hospitals and the hospitals' quality of care. METHODS: Data on hospital adoption of patient engagement functionalities were combined with quality data obtained from the Centers for Medicare and Medicaid Services (CMS) Hospital Compare. Fixed effects regression models were used to analyze a panel data consisting 1,463 hospitals from 2012 to 2014. RESULTS: This study revealed a significant positive relationship between the breadth of patient engagement functionalities and patient satisfaction (ß = 0.126, p < 0.05). The number of functionalities was also found to be negatively associated with 30-day readmission rates for myocardial infarction (ß= -0.085, p < 0.05), heart failure (ß= -0.109, p < 0.05), and pneumonia (ß= -0.048, p < 0.05). DISCUSSION: The breadth of functionalities offered by hospitals to engage patients was a significant factor in decreasing hospital 30-day readmission rates for pneumonia, acute myocardial infarction, and heart failure, and also influenced patients' perception of the hospital. CONCLUSIONS: The findings suggest that hospitals with more patient engagement HIT functionalities are likely to have higher patient satisfaction and lower readmission rates for infarction, heart failure, and pneumonia. This study will potentially assist hospital administrators to justify their strategic deployment of HIT resources to improve both perceived and actual care quality.

Why hospitals adopt patient engagement functionalities at different speeds? A moderated trend analysis.

OBJECTIVE: To investigate acute care hospitals' adoption speed of patient engagement health information technology (HIT) functionalities from 2008 to 2013 and how this speed is contingent on environmental factors and hospital characteristics. METHODS: Data on non-government acute care hospitals located in the United States was obtained from merging three databases: the American Hospital Association's (AHA) annual survey information technology supplement, AHA annual survey, and the Area Health Resource File (AHRF). The variables obtained from these datasets were the amount of annually adopted patient engagement HIT functionalities and environmental and organizational characteristics. Environmental factors included were uncertainty, munificence, and complexity. Hospital characteristics included size, system membership, ownership, and teaching status. RESULTS: A regression analysis of 4176 hospital-year observations revealed a positive trend in the adoption of HIT functionalities for patient engagement (ß= 1.109, p < 0.05). Moreover, the study showed that large, system-affiliated, not-for-profit, teaching hospitals adopt patient engagement HIT functionalities at a faster speed than their counterparts. Environmental munificence and uncertainty were also associated with an accelerating speed of adoption. Environmental complexity however did not show a significant impact on the speed of adoption. DISCUSSION: From 2008 to 2013, there was a significant acceleration in the speed of adopting patient engagement HIT functionalities. Further efforts should be made to ensure proper adoption and consistent use by patients in order to reap the benefits of these IT investments. CONCLUSION: Hospitals adopted at least one HIT functionality for patient engagement per year. The adoption speed varied across hospitals, depending on both environmental and organizational factors.

Hospital information technology and positive financial performance: a different approach to finding an ROI.

This empirical study examined the relationship between information technology (IT) utilization and hospital financial performance. Using primary and secondary data, we specified and tested a series of regression models that examined this relationship in Florida hospitals. In addition, we employed performance group analysis for a select group of operational performance indicators. Findings suggested a significant and positive relationship between increased levels of IT use and various measures of financial performance, even after controlling for case-mix acuity and bed size. Regardless of the analysis or method employed, the results indicated that IT adoption is consistently related to improved financial outcomes both overall and operationally. This relationship was present when examining IT collectively and for clinical IT, administrative IT, and strategic IT as individual measures. Lastly, although higher IT use was associated with a higher level of revenues, income, or cash flow, higher use was also associated with ratios based on higher expenses. This probably reflects the relatively high acquisition costs associated with obtaining and maintaining sophisticated IT systems. Given that a true return on investment is so difficult to obtain for many individual hospitalwide IT systems, our data can serve as a proxy for hospital leaders and policymakers who want to understand the potential financial effects of investing in IT in the acute care setting.

Information technologies in Florida's rural hospitals: does system affiliation matter?

CONTEXT: The recent explosive growth of information technology in hospitals promises to improve hospital and patient outcomes. Financial barriers may cause rural hospitals to lag in adoption of information technology, however, formal studies that examine rural hospital adoption of information technology are lacking. PURPOSE: To determine the extent to which rural Florida hospitals utilize clinical and other information technology applications, to identify related information technology issues and barriers, and to explore differences between stand-alone and system-affiliated hospitals. METHODS: Chief information officers in rural Florida hospitals were surveyed from June 2003-October 2003. A comprehensive set of questions assessed hospital demographics, information technology priorities and barriers, clinical and other information technology systems, and staffing needs. FINDINGS: In rural Florida, current information technology priorities included upgrading security on information technology systems to meet Health Insurance Portability and Accountability Act requirements (53.6%), implementing technology to reduce medical errors and to promote patient safety (50.0%), and implementing wireless systems (46.4%). With respect to current information technology adoption, system-affiliated rural hospitals were statistically more likely than their stand-alone counterparts to have laboratory information systems (93% vs 39%), pharmacy (87% vs 46%), pharmacy dispensing (53% vs 8%), chart deficiency (60% vs 15%), and order communication results (60% vs 23%). Financial barriers to successful information technology implementation were noted by 69% of stand-alone and 20% of system-affiliated rural hospitals. CONCLUSIONS: Although top information technology priorities are similar for all rural hospitals examined, differences exist between system-affiliated and stand-alone hospitals in adoption of specific information technology applications and with barriers to information technology adoption.

Characteristics of hospitals that outsource information system functions.

Despite the increasing trend among hospitals to outsource information system functions, little is known about these decisions in the acute-care setting. This study examined the outsourcing behavior of hospitals in Florida to determine the characteristics of hospitals that are most likely to outsource IS functions. In addition, the results provide an overview of which IS functions are most commonly outsourced in hospitals. Overall, survey responses from 98 hospitals indicate that the outsourcing of IS functions is more common in small hospitals and those in rural areas. Another important predictor of IS outsourcing behavior was the degree to which an organization placed a strategic importance on IS in its operations. Outsourcing behavior did not seem to be systematically related to the CIO reporting structure. However, having a physician in a senior level IT position did seem to correlate. Lastly, the data indicate that a hospital's profit status is not generally related to IS outsourcing.

Planning for Hospital IT Implementation: A New Look at the Business Case.

Compared to organizations in other industries, hospitals are slow to adopt information technology (IT). Those planning for system implementation must understand the barriers to IT adoption which, in healthcare, include the relatively high acquisition and maintenance costs of sophisticated administrative and clinical information systems. Understanding the overall business case is particularly important for hospital IT planners. This paper describes the literature that examines benefits from using health IT. In addition, we focus on a series of studies conducted in Florida that provide generalizable evidence regarding the overall business case associated with hospital adoption for information systems. These studies focus broadly on the improved financial, operational, and clinical performance associated with IT.

Hospital financial performance: does IT governance make a difference?

This study examined whether information technology (IT) governance, a term describing the decision authority and reporting structures of the chief information officer (CIO), is related to the financial performance of hospitals. The study was conducted using a combination of primary survey data regarding health care IT adoption and reporting structures of Florida acute care hospitals, with secondary data on hospital financial performance. Multiple regression models were used to evaluate the relationship of the 3 most commonly identified reporting structures. Outcome variables included measures of operating revenue and operating expense. All models controlled for overall IT adoption, ownership, membership in a hospital system, case mix, and hospital bed size. The results suggest that IT governance matters when it comes to hospital financial performance. Reporting to the chief financial officer brings positive outcomes; reporting to the chief executive officer has a mixed financial result; and reporting to the chief operating officer was not associated with discernible financial impact.

To outsource or not to outsource: Examining the effects of outsourcing IT functions on financial performance in hospitals.

BACKGROUND: Outsourcing of information technology (IT) functions is a popular strategy with both potential benefits and risks for hospitals. Anecdotal evidence, based on case studies, suggests that outsourcing may be associated with significant cost savings. However, no generalizable evidence exists to support such assertions. PURPOSE: This study examines whether outsourcing IT functions is related to improved financial performance in hospitals. METHODOLOGY: Primary survey data on IT outsourcing behavior were combined with secondary data on hospital financial performance. Regression analyses examined the relationship between outsourcing and various measures of financial performance while controlling for bed size, average patient acuity, geographic location, and overall IT adoption. FINDINGS: Complete data from a total of 83 Florida hospitals were available for analyses. Findings suggest that the decision to outsource IT functions is not related to any of the hospital financial performance measures that were examined. Specifically, outsourcing of IT functions did not correlate with net inpatient revenue, net patient revenue, hospital expenses, total expenses, cash flow ratio, operating margin, or total margin. PRACTICE IMPLICATIONS: In most cases, IT outsourcing is not necessarily a cost-lowering strategy, but instead, a cost-neutral manner in which to accomplish an organizational strategy.

Health care CIOs: assessing their fit in the organizational hierarchy and their influence on information technology capability.

Despite the continuing interest in the importance of health care information technology adoption, very little is known about chief information officers (CIOs), the individuals who manage this effort. The present study surveyed hospital CIOs to understand their backgrounds, their organizational status, and their influence in hospital health care information technology adoption. Survey responses from 98 organizations suggest that the CIO position varies significantly according to the profit status of the hospital. Further, regression analyses suggest that CIO tenure is associated with greater health care information technology adoption, whereas the reporting structure of the CIO is not. Management implications of the findings are discussed.

Are consumers reshaping hospitals? Complementary and alternative medicine in U.S. Hospitals, 1999-2003.

All types of acute care hospitals across the U.S. are becoming increasingly involved in offering CAM services. Hospitals appear to be responding to consumer demand, CAM specific market forces, and their organizational missions but not to regulatory mandates.

Diffusion of information technology supporting the Institute of Medicine's quality chasm care aims.

This article examines the degree to which healthcare information technology (HIT) supporting the Institute of Medicine's (IOM) six care aims is utilized in the hospital setting and explores organizational factors associated with HIT use. Guided by the IOM's Crossing the quality chasm report and associated literature, 27 applications and/or capabilities are classified according to one or more of the six care aims. A structured survey of Florida hospitals identified the use of HIT. Results suggest that, on average, hospitals have not yet embraced HIT to support the IOM's care aims and that associated organizational factors vary according to care aim.

Patient safety-related information technology utilization in urban and rural hospitals.

Ongoing research has linked certain information technology applications to reduction of medical errors and improved patient outcomes. The purpose of this study was to assess both the use of patient safety-related information technologies (PSIT) in urban and rural hospitals, as well as the organizational factors which may be linked to overall PSIT adoption. Florida's 199 acute care hospitals (170 urban; 29 rural) were surveyed regarding their utilization of PSIT. Of the 10 technologies studied, rural hospitals averaged 30% utilization compared to 48% for urban hospitals. Individual PSIT applications such as pharmacy-based systems, clinical decision support systems, and outcomes and quality management tools were all more likely to be present in urban hospitals. Hospital bed size (less than 100 beds), tax status (not-for-profit vs. for-profit), and system-affiliation appeared to be related to overall PSIT utilization. These findings are valuable for those interested in the current status of hospital PSIT and set the stage for further studies relating these applications to clinical outcomes in urban and rural hospitals.

Factors influencing health information system adoption in American hospitals.

OBJECTIVES: To study the number of health information systems (HISs), applicable to administrative, clinical, and executive decision support functionalities, adopted by acute care hospitals and to examine how hospital market, organizational, and financial factors influence HIS adoption. METHODS: A cross-sectional analysis was performed with 1441 hospitals selected from metropolitan statistical areas in the United States. Multiple data sources were merged. Six hypotheses were empirically tested by multiple regression analysis. RESULTS: HIS adoption was influenced by the hospital market, organizational, and financial factors. Larger, system-affiliated, and for-profit hospitals with more preferred provider organization contracts are more likely to adopt managerial information systems than their counterparts. Operating revenue is positively associated with HIS adoption. CONCLUSION: The study concludes that hospital organizational and financial factors influence on hospitals' strategic adoption of clinical, administrative, and managerial information systems.

Opening the black box: measuring hospital information technology capability.

Recently, health care investment in information technology (IT) has experienced a significant increase. Paralleling this increase has been an increase in IT capabilities. Despite the interest in and promises of IT in the health care setting, there is a paucity of empirical research that has attempted to define an organizational measure of IT capability. The dearth of research has contributed to the traditional belief that IT is perceived as a "black box," whereby organizational resources enter the box as "inputs" and are somehow transformed into positive outcomes for an organization. However, for positive outcomes to be realized, these outcomes must be measurable. This research uses a stakeholder perspective to develop a theoretically specified measure of IT capability. A latent construct, IT munificence, is proposed using tenets from diffusion of innovation theory and strategic contingency theory. The construct is tested using a sample of 1,545 acute care hospitals located in the United States. IT munificence fits the study data well, supporting the hypothesis that IT munificence represents a strategy of hospital IT capability.

Adoption factors associated with patient safety-related information technology.

Information technology (IT) that positively affects both quality of care and patient safety currently exists but is not used widely. This study identifies organizational and external factors associated with the adoption of patient safety-related IT (PSIT) in acute care hospitals in Florida. Factors found to be positively correlated with PSIT use included physicians' active involvement in clinical IT planning, the placement of strategic importance on IT by the organization, CIO involvement in patient safety planning, and the perception of an adequate selection of products from vendors. Other factors and implications are discussed as well.