Fostering organizational resilience: The relevance of organization theory in a postpandemic world.

ASSOCIATE EDITORS NOTE: This article is an adapted version of Dr. Jacqueline Zinn's Keith G. Provan Distinguished Scholar Award plenary to the Health Care Management Division of the Academy of Management in 2020. We are excited to share it with you because it is noteworthy among scholarly career award plenaries. Specifically, the article does two big things exceptionally well: (a) provides a compelling and informative retrospective on a truly exceptional scholarly career renowned for work that consistently and deeply engages with practice, practitioners, and emerging, urgent problems in a conceptually and empirically rigorous manner and (b) inventively connects her research to the health care, managerial, and organizational challenges posed by the pandemic (and pandemics from prior eras) to provide a forward looking research agenda on organizational resilience and well-being that offers ready-made conceptual development and empirical work for the next generation.

Certificate of need and the cost of competition in home healthcare markets.

We used 2010-16 Medicare Cost Reports for 10,737 freestanding home health agencies (HHAs) to examine the impact of home health (HH) and nursing home (NH) certificate-of-need (CON) laws on HHA caseload, total and per-patient variable costs. After adjusting for other HHA characteristics, total costs were higher in states with only HH CON laws ($2,975,698), only NH CON laws ($1,768,097), and both types of laws ($3,511,277), compared with no CON laws ($1,538,536). Higher costs were driven by caseloads, as CON reduced per-patient costs. Additional research is needed to distinguish whether this is due to skimping on quality vs. economies of scale.

Strategy and risk sharing in hospital-postacute care integration.

ISSUE/TREND: Postacute care has been identified as a primary area for cost containment. The continued shift of payment structures from volume to value has often put hospitals at the forefront of addressing postacute care cost containment. However, hospitals continue to struggle with models to manage patients in postacute care institutions, such as skilled nursing facilities or in home health agencies. Recent research has identified postacute care network development as one mechanism to improve outcomes for patients sent to postacute care providers. Many hospitals, though, have not utilized this strategy for fear of not adhering to Centers for Medicare & Medicaid Services requirements that patients are given choice when discharged to postacute care. MANAGERIAL APPROACH: A hospital's approach to postacute care integration will be dictated by environmental uncertainty and the level of embeddedness hospitals have with potential postacute care partners. Hospitals, though, must also consider how and when to extend shared savings to postacute care partners, which will be based on the complexity of the risk-sharing calculation, the ability to maintain network flexibility, and the potential benefits of preserving competition and innovation among the network members. For hospital leaders, postacute care network development should include a robust and transparent data management process, start with an embedded network that maintains network design flexibility, and include a care management approach that includes patient-level coordination. CONCLUSION: The design of care management models could benefit from elevating the role of postacute care providers in the current array of risk-based payment models, and these providers should consider developing deeper relationships with select postacute care providers to achieve cost containment.

Moving organizational theory in health care forward: A discussion with suggestions for critical advancements.

In May 2019, scholars in management and organization of health care organizations and systems met. The opening plenary was a moderated discussion with five distinguished scholars who have exemplified pushing the frontier of organizational theory and practice throughout their careers: Ann Barry Flood of Dartmouth College, John Kimberly of the University of Pennsylvania, Anthony (Tony) Kovner of New York University, Stephen (Steve) Shortell of University of California at Berkeley, and Jacqueline (Jackie) Zinn of Temple University. The discussion was moderated by Ingrid Nembhard of the University of Pennsylvania. The goal of the plenary was to provide an opportunity to hear from senior members of the health care management community how they think about organizational behavior and theory, changes that they have observed, research gaps that they see, and lessons for research and practice that they have learned. This article is the transcript of that plenary discussion. It is shared to capture the intellectual history of the field and help surface the critical advancements still needed in organizational theory and practice in health care. The closing remarks of the panelists summarize recommendations for both practice and scholarship in health care organization management.

Home Health Care Quality, Its Costs and Implications for Home Health Value-Based Purchasing.

The Home Health Value-based Purchasing (HHVBP) demonstration, incorporating a payment formula designed to incentivize both high-quality care and quality improvement, is expected to become a national program after 2022, when the demonstration ends. This study investigated the relationship between costs and several quality dimensions, to inform HHVBP policy. Using Medicare cost reports, OASIS and Home Health Compare data for 7,673 home health agencies nationally, we estimated cost functions with instrumental variables for quality. The estimated net marginal costs varied by composite quality measure, baseline quality, and agency size. For four of the five composite quality measures, the net marginal cost was negative for low-quality agencies, suggesting that quality improvement was cost saving for this agency type. As the magnitude of the net marginal cost is commensurate with the payment incentive planned for HHVBP, it should be considered when designing the incentives for HHVBP, to maximize their effectiveness.

Identifying Associations between Quality Initiatives and Quality Measures among Home Health Agencies: Findings from a National Study.

Home health performance gained visibility with the publication of Home Health Compare and the Home Health Value-Based Payment demonstration. Both provide incentives for home health agencies (HHA) to invest in quality improvements. The objective of this study is to identify the association between quality initiatives adopted by HHAs and improved performance. A 2018 national survey of 7459 HHAs, yielding a sample of 1192 eligible HHAs, provided information about 23 quality initiatives, which was linked to 5 composite Super Quality Measures (SQMs): ADL/pain, self-treatment, timely care, hospitalizations, and patient experience. Exclusions for missing data and outliers yielded a final analytical sample of 903 HHAs. Regression models estimated associations between quality initiatives and SQMs. The relationships between sixteen of the SQM/quality initiative pairs were positively associated with improvement and 7 were negatively associated. Web-based technologies for staff and care-givers improved performance but deteriorated patient experience. Web support-groups for staff and review of HHC rankings reduced hospitalization rates. While this study offers insights for quality improvement, a limitation may be a lack of sensitivity to the nuances of quality improvement implementation. Therefore, this study should be viewed as hypothesis-generating concerning initiatives likely to have the greatest potential meriting further investigation.

Changes in clinical and hotel expenditures following publication of the nursing home compare report card.

BACKGROUND: Nursing Home Compare first published clinical quality measures at the end of 2002. It is a quality report card that for the first time offers consumers easily accessible information about the clinical quality of nursing homes. It led to changes in consumers' demand, increasing the relative importance of clinical versus hotel aspects of quality in their search and choice of a nursing home. OBJECTIVES: To examine the hypothesis that nursing homes responding to these changes in demand shifted the balance of resources from hotel to clinical activities. SUBJECTS: The study included 10,022 free-standing nursing homes nationwide during 2001 to 2006. RESEARCH DESIGN AND DATA: A retrospective multivariate statistical analysis of trends in the ratio of clinical to hotel expenditures, using Medicare cost reports, Minimum Data Set and Online Survey, Certification and Reporting data, controlling for changes in residents' acuity and facility fixed effects. Inference is based on robust standard errors. RESULTS: The ratio of clinical to hotel expenditures averaged 1.78. It increased significantly (P < 0.001) by 5% following the publication of the report card. The increase was larger and more significant among nursing homes with worse reported quality, lower occupancy, those located in more competitive markets, for-profit ownership and owned by a chain. CONCLUSIONS: The increase in the ratio of clinical to hotel expenditures following publication of the report card suggests that nursing homes responded as expected to the changes in the elasticity of demand with respect to clinical quality brought about by the public reporting of clinical quality measures. The response was stronger among nursing homes facing stronger incentives.

Specialty hospital market proliferation: Strategic implications for general hospitals.

BACKGROUND: Since the early 1990s, specialty hospitals have been continuously increasing in number. A moratorium was passed in 2003 that prohibited physicians' referrals of Medicare patients to newly established specialty hospitals if the physician has ownership stakes in the hospital. Although this moratorium expired in effect in 2007, many are still demanding that the government pass new policies to discourage the proliferation of specialty hospitals. PURPOSE: This study aimed at examining the regulatory and environmental forces that influence specialty hospitals founding rate. Specifically, we use the resource partitioning theory to investigate the relationship between general hospitals closure rates and the market entry of specialty hospitals. This study will help managers of general hospitals in their strategic thinking and planning. METHODOLOGY: We rely on secondary data resources, which include the American Hospital Association, Area Resource file, census, and Center for Medicare and Medicaid Services data, to perform a longitudinal analysis of the founding rate of specialty hospital in the 48 states. Specifically, we use the negative binomial generalized estimating equation approach available through Stata 9.0 to study the effect of general hospitals closure rate and environmental variables on the proliferation of specialty hospitals. FINDINGS: Specialty hospitals founding rate seems to be significantly related to general hospitals closure rates. Moreover, results indicate that economic, supply, regulatory, and financial conditions determine the founding rate of specialty hospitals in different states. PRACTICE IMPLICATIONS: The results from this study indicate that the closure of general hospitals creates market conditions that encourage the market entry of specialized health care delivery forms such as specialty hospitals. Managers of surviving general hospitals have to view the closure of other general hospitals not just as an opportunity to increase market share but also as a threat of competition from new forms of health care organizations.

Factors influencing nursing home response to quality measure publication: A resource dependence perspective.

BACKGROUND: The Centers for Medicare and Medicaid Services provides a report card on nursing homes at a Web site called Nursing Home Compare (NHC) that includes information on 19 clinical quality measures (QMs). The information is intended to inform consumer choice, to provide a focus for state regulatory initiatives, and to promote nursing home quality improvement efforts. PURPOSE: This study aimed to determine what factors were associated with nursing homes' investment in quality after publication of the NHC report card. METHODOLOGY: A 2007 survey sent to nursing home administrators nationally inquired about their response to publication of QMs on NHC. Survey data were merged with data on QMs and organizational characteristics from NHC. The dependent variables represent actions requiring a significant investment of resources in staffing and/or equipment. Independent variables tested hypotheses regarding the influence of constituent groups, competition, and managed care participation on investment. We estimated logistic regression models adjusting for clustering within states. FINDINGS: The degree to which nursing homes perceive that the report card influences key constituencies (professional referral sources, consumers, and state surveyors) is associated with the odds of committing substantial resources to improve report card performance. Facilities with lower reported QM scores were three times more likely to make certain investments than high-quality facilities in competitive markets. Perceived QM validity and close monitoring of scores also motivates investment. PRACTICE IMPLICATIONS: A substantial proportion of nursing homes now perceive that the report card influences professional referrals, consumer choice, and state survey investigatory process. This suggests that QM publication may indeed have a competitive impact as it concerns these constituencies, thus increasing the stakes in improving the scores and making substantial investments much more likely.

Determinants of performance failure in the nursing home industry.

This study investigates the determinants of performance failure in U.S. nursing homes. The sample consisted of 91,168 surveys from 10,901 facilities included in the Online Survey Certification and Reporting system from 1996 to 2005. Failed performance was defined as termination from the Medicare and Medicaid programs. Determinants of performance failure were identified as core structural change (ownership change), peripheral change (related diversification), prior financial and quality of care performance, size and environmental shock (Medicaid case mix reimbursement and prospective payment system introduction). Additional control variables that could contribute to the likelihood of performance failure were included in a cross-sectional time series generalized estimating equation logistic regression model. Our results support the contention, derived from structural inertia theory, that where in an organization's structure change occurs determines whether it is adaptive or disruptive. In addition, while poor prior financial and quality performance and the introduction of case mix reimbursement increases the risk of failure, larger size is protective, decreasing the likelihood of performance failure.

Strategic orientation and nursing home response to public reporting of quality measures: an application of the miles and snow typology.

OBJECTIVE: To assess whether differences in strategic orientation of nursing homes as identified by the Miles and Snow typology are associated with differences in their response to the publication of quality measures on the Nursing Home Compare website. DATA SOURCES: Administrator survey of a national 10 percent random sample (1,502 nursing homes) of all facilities included in the first publication of the Nursing Home Compare report conducted in May-June 2004; 724 responded, yielding a response rate of 48.2 percent. STUDY DESIGN: The dependent variables are dichotomous, indicating whether or not action was taken and the type of action taken. Four indicator variables were created for each of the four strategic types: Defender, Analyzer, Prospector, and Reactor. Other variables were included in the seven logistic regression models to control for factors other than strategic type that could influence nursing home response to public disclosure of their quality of care. DATA COLLECTION/EXTRACTION METHODS: Survey data were merged with data on quality measures and organizational characteristics from the first report (November 2002). PRINCIPAL FINDINGS: About 43 percent of surveyed administrators self-typed as Defenders, followed by Analyzers (33 percent), and Prospectors (19 percent). The least self-selected strategic type was the Reactor (6.6 percent). In general, results of the regression models indicate differences in response to quality measure publication by strategic type, with Prospectors and Analyzers more likely, and Reactors less likely, to respond than Defenders. CONCLUSIONS: While almost a third of administrators took no action at all, our results indicate that whether, when, and how nursing homes reacted to publication of federally reported quality measures is associated with strategic orientation.

Restructuring in response to case mix reimbursement in nursing homes: a contingency approach.

BACKGROUND: Resident-based case mix reimbursement has become the dominant mechanism for publicly funded nursing home care. In 1998 skilled nursing facility reimbursement changed from cost-based to case mix adjusted payments under the Medicare Prospective Payment System for the costs of all skilled nursing facility care provided to Medicare recipients. In addition, as of 2004, 35 state Medicaid programs had implemented some form of case mix reimbursement. PURPOSE: The purpose of the study is to determine if the implementation of Medicare and Medicaid case mix reimbursement increased the administrative burden on nursing homes, as evidenced by increased levels of nurses in administrative functions. METHODOLOGY/APPROACH: The primary data for this study come from the Centers for Medicare and Medicaid Services Online Survey Certification and Reporting database from 1997 through 2004, a national nursing home database containing aggregated facility-level information, including staffing, organizational characteristics and resident conditions, on all Medicare/Medicaid certified nursing facilities in the country. We conducted multivariate regression analyses using a facility fixed-effects model to examine the effects of the implementation of Medicaid case mix reimbursement and Medicare Prospective Payment System on changes in the level of total administrative nurse staffing in nursing homes. FINDINGS: Both Medicaid case mix reimbursement and Medicare Prospective Payment System increased the level of administrative nurse staffing, on average by 5.5% and 4.0% respectively. However, lack of evidence for a substitution effect suggests that any decline in direct care staffing after the introduction of case mix reimbursement is not attributable to a shift from clinical nursing resources to administrative functions. PRACTICE IMPLICATIONS: Our findings indicate that the administrative burden posed by case mix reimbursement has resource implications for all freestanding facilities. At the margin, the increased administrative burden imposed by case mix may become a factor influencing a range of decisions, including resident admission and staff hiring.

Doing better to do good: the impact of strategic adaptation on nursing home performance.

OBJECTIVE: To test the hypothesis that a greater commitment to strategic adaptation, as exhibited by more extensive implementation of a subacute/rehabilitation care strategy in nursing homes, will be associated with superior performance. DATA SOURCES: Online Survey, Certification, and Reporting (OSCAR) data from 1997 to 2004, and the area resource file (ARF). STUDY DESIGN: The extent of strategic adaptation was measured by an aggregate weighted implementation score. Nursing home performance was measured by occupancy rate and two measures of payer mix. We conducted multivariate regression analyses using a cross-sectional time series generalized estimating equation (GEE) model to examine the effect of nursing home strategic implementation on each of the three performance measures, controlling for market and organizational characteristics that could influence nursing home performance. DATA COLLECTION/ABSTRACTION METHODS: OSCAR data was merged with relevant ARF data. PRINCIPAL FINDINGS: The results of our analysis provide strong support for the hypothesis. CONCLUSIONS: From a theoretical perspective, our findings confirm that organizations that adjust strategies and structures to better fit environmental demands achieve superior performance. From a managerial perspective, these results support the importance of proactive strategic leadership in the nursing home industry.

Hospitalization of nursing home residents: the effects of states' Medicaid payment and bed-hold policies.

OBJECTIVE: Hospitalizations of nursing home residents are costly and expose residents to iatrogenic disease and social and psychological harm. Economic constraints imposed by payers of care, predominantly Medicaid policies, are hypothesized to impact hospitalizations. DATA SOURCES/STUDY SETTING: Federally mandated resident assessments were merged with Medicare claims and eligibility files to determine hospitalizations and death within 150 days of baseline assessment. Nursing home and market characteristics were obtained from the Online Survey Certification and Reporting, and the Area Resource File, respectively. States' average daily Medicaid nursing home payments and bed-hold policies were obtained independently. STUDY DESIGN: Prospective cohort study of 570,614 older (> or =65-year-old), non-MCO (Medicare Managed Care), long-stay (> or =90 days) residents in 8,997 urban, freestanding nursing homes assessed between April and June 2000, using multilevel models to test the impact of state policies on hospitalizations controlling for resident, nursing home, and market characteristics. PRINCIPAL FINDINGS: Overall, 99,379 (17.4 percent) residents were hospitalized with rates varying from 8.4 percent in Utah to 24.9 percent in Louisiana. Higher Medicaid per diem was associated with lower odds of hospitalizations (5 percent lower for each $10 above average $103.5, confidence intervals [CI] 0.91-0.99). Hospitalization odds were higher by 36 percent in states with bed-hold policies (CI: 1.12-1.63). CONCLUSIONS: State Medicaid bed-hold policy and per-diem payment have important implications for nursing home hospitalizations, which are predominantly financed by Medicare. This study emphasizes the importance of properly aligning state Medicaid and federal Medicare policies in regards to the subsidy of acute, maintenance, and preventive care in the nursing home setting.

Nursing homes' response to the nursing home compare report card.

OBJECTIVE: The Centers for Medicare and Medicaid Services have recently begun publishing the Nursing Home Compare report card. The objective of this study was to examine the initial reactions of nursing homes to publication of the report card and to evaluate the impact of the report card on quality-improvement activities. METHODS: We conducted a survey of a random national sample of 1,502 nursing home administrators; 724 responded. We analyzed frequency of responses to questions regarding views of the quality measures and actions taken. RESULT: A model of nursing homes' behavior predicted that the report card would provide an incentive for facilities to improve quality. A majority of facilities (69%) reported reviewing their quality scores regularly, and many have taken specific actions to improve quality. Homes with poor quality scores were more likely to take actions following the publication of the report card. DISCUSSION: These findings suggest that the Nursing Home Compare report card has the potential to positively affect nursing home quality.

Hospital inefficiency: what is the impact of membership in different types of systems?

The primary objective of this study is to assess whether systematic differences in inefficiency are associated with hospital membership in different types of systems. We employed the Battese/Coelli simultaneous stochastic frontier analysis (SFA) technique to estimate hospital cost inefficiency. Mean estimated inefficiency was 8.42%. Membership in different types of systems was related to estimated cost inefficiency (p < .05). Compared to hospitals that were members of centralized health systems, membership in centralized physician/insurance or decentralized systems was associated with decreased inefficiency; membership in independent systems was associated with increased inefficiency.

Reducing Hospital Readmissions Through Preferred Networks Of Skilled Nursing Facilities.

Establishing preferred provider networks of skilled nursing facilities (SNFs) is one approach hospital administrators are using to reduce excess thirty-day readmissions and avoid Medicare penalties or to reduce beneficiaries' costs as part of value-based payment models. However, hospitals are also required to provide patients at discharge with a list of Medicare-eligible providers and cannot explicitly restrict patient choice. This requirement complicates the development of a SNF network. Furthermore, there is little evidence about the effectiveness of network development in reducing readmission rates. We used a concurrent mixed-methods approach, combining Medicare claims data for the period 2009-13 with qualitative data gathered from interviews during site visits to hospitals in eight US markets in March-October 2015, to examine changes in rehospitalization rates and differences in practices between hospitals that did and did not develop formal SNF networks. Four hospitals had developed formal SNF networks as part of their care management efforts. These hospitals saw a relative reduction from 2009 to 2013 in readmission rates for patients discharged to SNFs that was 4.5 percentage points greater than the reduction for hospitals without formal networks. Interviews revealed that those with networks expanded existing relationships with SNFs, effectively managed patient data, and exercised a looser interpretation of patient choice.

The use of contract licensed nursing staff in U.S. nursing homes.

The extent to which nursing homes rely on the use of contracted licensed staff, factors associated with this staffing practice, and the resultant effect on the quality of resident care has received little public attention. Merging the On-line Survey Certification and Reporting System database with the Area Resource File from 1992 through 2002, the authors regressed organizational and market-level variables on the use of 5 percent or more contract full-time equivalent registered nurses and licensed practical nurses. Since 1997, the proportion of facilities using 5 percent or more contract licensed staff more than tripled. Use of contract nurses was associated with more deficiency citations, characteristics of poorer facilities, and tight labor markets. Nursing homes increasingly rely on contract nurses. The failure of nursing homes to attract and retain a competent, stable workforce creates a vicious cycle of staffing practices, which may lead to decline in quality of care.

The Impact of Certificate-of-Need Laws on Nursing Home and Home Health Care Expenditures.

Over the past two decades, nursing homes and home health care agencies have been influenced by several Medicare and Medicaid policy changes including the adoption of prospective payment for Medicare-paid postacute care and Medicaid-paid long-term home and community-based care reforms. This article examines how spending growth in these sectors was affected by state certificate-of-need (CON) laws, which were designed to limit the growth of providers and have remained unchanged for several decades. Compared with states without CON laws, Medicare and Medicaid spending in states with CON laws grew faster for nursing home care and more slowly for home health care. In particular, we observed the slowest growth in community-based care in states with CON for both the nursing home and home health industries. Thus, controlling for other factors, public postacute and long-term care expenditures in CON states have become dominated by nursing homes.

Do trends in the reporting of quality measures on the nursing home compare web site differ by nursing home characteristics?

PURPOSE: This study examines the relationship between the first set of quality measures (QMs) published by the Centers for Medicare and Medicaid Services on the Nursing Home Compare Web site and five nursing home structural characteristics: ownership, chain affiliation, size, occupancy, and hospital-based versus freestanding status. DESIGN AND METHODS: Using robust linear regressions, we examined the values of the QMs at first publication and their change over the first five reporting periods, in relation to facility characteristics. RESULTS: There were significant baseline differences associated with these facility characteristics. Pain, physical restraints, and delirium exhibit a clear downward trend, with differences between the first QM reporting period and the fifth ranging from 12.7% to 46.0%. However, there were only minimal differences in trends associated with facility characteristics. This suggests that the relative position of facilities on these measures did not change much within this time period. The variation by facility type was larger for the short-stay QMs than for the long-stay measures. IMPLICATIONS: Those QMs that show an improvement exhibit it across all types of facilities, irrespective of initial quality levels. Although a number of alternatives may explain this positive trend, the trend itself suggests that report cards, to the extent that they are effective, are so for all facility types but only some QMs.