Service mix and financial performance in rural hospitals: A contingency theory perspective.

BACKGROUND: Rural hospitals are increasingly at risk of closure. Closure reduces the availability of hospital care in rural areas, resulting in a disparity in health between rural and urban citizens, and it has broader economic impacts on rural communities as rural hospitals are often large employers and are vital to recruiting new businesses to a community. To combat the risk of closure, rural hospitals have sought partnerships to bolster financial performance, which often results in a closure of services valuable to the community, such as obstetrics and certain diagnostic services, which are viewed as unprofitable. This can lead to poor health outcomes as community members are unable to access care in these areas. PURPOSE: In this article, we explore rural hospital service offerings and financial performance, with an aim to illuminate if specific service offerings are associated with positive financial performance in a rural setting. METHODS: Our study used hospital organization data, as well as county-level demographics with periods of analysis from 2015 and 2019. We employed a pooled cross-sectional regression analysis with robust standard errors examining the association between total margin and service lines among rural hospitals in the United States. RESULTS: The findings suggest that some services deemed unprofitable in urban and suburban hospital settings-such as obstetrics and drug/alcohol rehabilitation-are associated with higher margins in rural hospitals. Other unprofitable service lines-such as psychiatry and long-term care-are associated with lower margins in rural hospitals. CONCLUSION: Our results suggest the need of rural hospitals to choose services that align with environmental circumstances to maximize financial performance. PRACTICE IMPLICATION: Hospital administrators in rural settings need to take a nuanced look at their environmental and organizational specifics when deciding upon the service mix. Generalizations regarding profitability should be avoided to maximize financial performance.

Reported Clinical and Financial Performance of Hospitals With Physician CEOs Compared to Those With Nonphysician CEOs.

EXECUTIVE SUMMARY: Little work has been done comparing the performance of hospitals with physician CEOs versus nonphysician CEOs, despite the ease of identifying this characteristic and extant leadership theories suggesting a relationship between technical expertise and success in leading highly technical organizations. We performed a detailed analysis of several widely accepted measures of clinical and financial performance across a randomly selected group of U.S. acute care hospitals with more than 40 beds and found no statistically significant differences between the two groups. The 30-day acute myocardial infarction mortality rate showed a positive statistically significant difference in the bivariate analysis (p < .001), but the effect was nullified in the multivariable regression analysis.

Predicting Nursing Home Financial Distress Using the Altman Z-Score.

This article uses a modified Altman Z-score to predict financial distress within the nursing home industry. The modified Altman Z-score model uses multiple discriminant analysis (MDA) to examine multiple financial ratios simultaneously to assess a firm's financial distress. This study utilized data from Medicare Cost Reports, LTCFocus, and the Area Resource File. Our sample consisted of 167 268 nursing home-year observations, or an average of 10 454 facilities per year, in the United States from 2000 through 2015. The independent financial variables, liquidity, profitability, efficiency, and net worth were entered stepwise into the MDA model. All of the financial variables, with the exception of net worth, significantly contributed to the discriminating power of the model. K-means clustering was used to classify the latent variable into 3 categorical groups: distressed, risk-of-financial distress, and healthy. These findings will provide policy makers and practitioners another tool to identify nursing homes that are at risk of financial distress.

Integration of cardiologists with hospitals: Effects on physician compensation and productivity.

BACKGROUND: Hospital-physician vertical integration involving employment of physicians has increased considerably over the last decade. Cardiologists are one group of specialists being increasingly employed by hospitals. Although hospital-physician integration has the potential to produce economic and societal benefits, there is concern that this consolidation may reduce competition and concentrate bargaining power among providers. In addition, hospitals may be motivated to offer cardiologists higher compensation and reduced workloads as an incentive to integrate. PURPOSE: The aim of the study was to determine if there are differences in compensation and clinical productivity, measured by work relative value units (RVUs), for cardiologists as they transition from being independent practitioners to being employed by hospitals. METHODOLOGY/APPROACH: This study was a quantitative, retrospective, longitudinal analysis, comparing the compensation and work RVUs of integrated cardiologists to their compensation and work RVUs as independent cardiologists. Data from the MedAxiom Annual Survey from 2010 to 2014 were used. Participants included 4,830 unique cardiologists that provided 13,642 pooled physician-year observations, with ownership status, compensation, work (RVUs), and other characteristics as variables for analysis. RESULTS: Results from the multivariate regressions indicate that average compensation for cardiologists increases by $129,263.1 (p < .001) when they move from independent to integrated practice. At the same time, physician work RVUs decline by 398.04 (p = .01). CONCLUSION: Our findings support the conjecture that hospitals may be offering higher pay and lower workloads to incentivize cardiologists to integrate. PRACTICE IMPLICATIONS: Although hospitals may have goals of quality improvement and lower costs, such goals may presently be secondary to service line growth and increased market power. There is reason to be cautious about some of the implications of hospital integration of cardiologists.

CEO Turnover Among U.S. Acute Care Hospitals, 2006-2015: Variations by Type of Geographic Area.

EXECUTIVE SUMMARY: Recent reports have documented rising rates of CEO turnover. This phenomenon can have negative implications for hospitals and their surrounding communities, particularly in under-resourced rural communities. Ostensibly, components of the Affordable Care Act have addressed some of these resource challenges and may have helped to slow the CEO turnover trend in rural areas. We examined this possibility with a longitudinal analysis of U.S. acute care hospitals over an extended period (2006-2015) to examine whether patterns of CEO change differed for hospitals in different types of geographic areas (e.g., rural vs. urban). The rates revealed by our analysis seem to be problematic, with nearly one-quarter of all U.S. hospitals experiencing a change in CEO every 3 to 4 years, on average. Moreover, while the likelihood of a CEO change increased significantly over time for hospitals in nearly all types of geographic areas, it was nearly twice as large for frontier hospitals in areas with fewer than 2,500 residents compared to urban and rural hospitals. Our study suggests that the stability of hospital CEO leadership has declined over the past decade, particularly for vulnerable frontier hospitals, and highlights the need for recruitment and retention strategies to address this challenge.

Evidence that patient-centered medical homes are effective in reducing emergency department admissions for patients with depression.

The patient-centered medical home (PCMH) has increasingly been touted as one means of integrating behavioral health and primary care and more holistically caring for patients with chronic disease. With its whole person orientation, the PCMH presents an opportunity to reduce emergency department visits for patients with depression by focusing on the patient and his/her health care needs, facilitating communication among providers and patients, and improving patients' access to care providers across settings. This study examines the relationship between PCMH capacity - defined as the ability to offer a service identified as a component part of the PCMH - and the number of emergency department visits for patients with depression. Health plan claims data, self-report data from physician practices on their PCMH characteristics, and the Area Resource File were analyzed. Results show that overall PCMH capacity is associated with fewer emergency department visits for patients with depression, and interpersonal aspects of the PCMH in particular, were associated with fewer emergency department visits while technical capabilities were not. Interpersonal activities that facilitate care coordination, patient engagement, and connect patients with community resources might be more effective in keeping patients out of the emergency department for unnecessary reasons as compared to technical activities focused on reporting and information management.

Organizational and environmental factors influencing hospital community orientation.

BACKGROUND: Community orientation refers to hospitals' efforts to assess and meet the health needs of the local population. Variations in the number of community orientation-related activities offered by hospitals may be attributed to differences in organizational and environmental characteristics. Therefore, hospitals have to strategically respond to these internal and external constraints to improve community health. Understanding the facilitators and barriers of hospital community orientation is important to health care managers facing pressure from the external environment to meet the expectations of the community as well as Affordable Care Act guidelines. PURPOSE: The purpose of this study was to examine the organizational and environmental factors that promote or impede hospital community orientation. METHODOLOGY: A multivariate regression with random effects was conducted using data from the American Hospital Association Annual Survey from 2007 to 2010 and county level data from the Area Health Resource Files. FINDINGS: Not-for-profit, system-affiliated, network-affiliated, and larger hospitals have a higher degree of community orientation. In addition, the percentage of the county residents under the age of 65 years with health insurance and hospitals in states with certificate-of-need laws were also positively related to the degree of community orientation. During the study period, it appears that organizational factors mattered more in determining the degree of community orientation. PRACTICE IMPLICATIONS: Overall, a better understanding of the factors that influence community orientation can assist hospital administrators and policymakers in stimulating the hospital's role in improving population health and its responsiveness to community health needs. These efforts may occur by building interorganizational relationships or by incentivizing those hospitals that are least likely to be community oriented.

Effective Governance and Hospital Boards Revisited: Reflections on 25 Years of Research.

This study reviews and synthesizes empirical research literature focusing on the relationship between boards of directors and organizational effectiveness of U.S. hospitals. The study examines literature published in scholarly journals during the period of 1991-2017. Fifty-one empirical articles were identified that met the study's inclusion criteria. A framework from the corporate governance and nonprofit governance literature is used to classify the articles according to level of analysis (individual actors, governing bodies, organizations, and networks, alliances and multiorganizational initiatives) and focus of research (formal structure and behavioral dynamics-including informal structures and processes). Results are discussed, emerging trends are identified, and recommendations are made for future research.

Patient Perceptions of Servicescape in Healthcare: A Systematic Review of the Literature.

EXECUTIVE SUMMARY: Many hospitals are competing for survival in their service areas. Because of intense competition within markets, hospitals are developing strategies to differentiate themselves. One way to do so is to create a physical infrastructure and service environment that generate a positive impact on patient perceptions. The purpose of this study is to review the literature on servicescape (i.e., a total impression of a service encounter developed through the use of human senses) and its effects on service quality and patient outcomes in healthcare settings. Servicescape studies have taken place in various healthcare settings (i.e., teaching hospitals, dental clinics, outpatient clinics) in 10 countries. Although servicescape in healthcare settings is a rarely researched topic at both the national and international levels, research indicates a significant positive association between servicescape and patient perceptions, patient satisfaction, and patient emotions. In light of the increasing emphasis in quality and value-based purchasing initiatives on patient experience and outcomes, more servicescape research in healthcare settings is needed. This systematic review underscores this need and enhances the knowledge base in this area.

The relationship between emergency department wait times and inpatient satisfaction.

This study examines patient perceptions of emergency department wait times and inpatient experiences. For many hospitals across the United States, the emergency department (ED) is now the "front door"; therefore, understanding the impact of ED experience on the inpatient experience is critical for leaders managing these complex settings today. Results showed statistically significant relationships between a very good ED experience and a very good inpatient experience. Perceived wait times in the ED, more so than actual ED wait times, served as a predictor of a very good ED rating as well as a very good rating of the inpatient experience.

Organizational Characteristics Associated With Fundraising Performance of Nonprofit Hospitals.

Fundraising has become increasingly important to nonprofit hospitals as access to capital has grown more difficult and reimbursement for services more complex. This study analyzes the variation in organizational characteristics and fundraising performance among nonprofit acute care hospitals in the United States to identify and measure critical factors related to one key fundraising performance indicator: public support. Results indicate that the presence of an endowment, along with its value, investments in fundraising, and the geographic location of the organization, account for approximately 46% of variance in public support among nonprofit hospitals. The use of a separate foundation for the fundraising operation is not necessarily associated with measures of fundraising success; however, a majority of hospitals do use a foundation, signaling a strategic choice that may be made for numerous reasons. The study results and limitations are discussed and recommendations are made for maximizing the effectiveness of the fundraising enterprise within nonprofit hospitals. Increasing awareness of challenges associated with fundraising success will enhance the strategic management of fundraising operations by hospital executives and board members.

PERSPECTIVES ON MULTIDISCIPLINARY TEAM PROCESSES AMONG HEALTHCARE EXECUTIVES: PROCESSES THAT FACILITATE TEAM EFFECTIVENESS.

BACKGROUND: Multidisciplinary teams (MDTs) are used in healthcare organizations to address both clinical and managerial functions. Despite their prevalence, little is known about how team processes work to facilitate effectiveness among MDT leadership teams. PURPOSE: This study explores perceptions of MDT participation experienced by organizational leaders in healthcare organizations in the United States. METHODOLOGY/APPROACH: A survey of American College of Healthcare Executives members was conducted to assess involvement and perceptions of MDTs among health care management professionals. Descriptive statistics, independent T-Tests and Chi-square analyses were used to examine participation in MDTs, perception of MDT processes, and the association of participation and perceived processes with employee and organizational characteristics. FINDINGS: The survey yielded a sample comprised of 492 healthcare executive or executive-track employees. An overwhelming majority indicated participation in MDTs. The study identified team processes that could use improvement including communication, cooperation, and conflict resolution. PRACTICE IMPLICATIONS: The study provides evidence that can help guide the development of training programs that focus on providing managerial leaders with strategies aimed at improving communication, coordination, and conflict resolution that will improve the effectiveness of MDT functioning in healthcare organizations.

The presence of hospital-based palliative care programs: A resource dependence perspective.

BACKGROUND: The presence of hospital-based palliative care programs has risen over time in the United States. Nevertheless, organizational and environmental factors that contribute to the presence of hospital-based palliative care programs are unclear. PURPOSE: The aim of this study was to examine the role of organizational and environmental factors associated with the presence of hospital-based palliative care programs using resource dependence theory. METHODOLOGY: Panel data from 2000 to 2009 American Hospital Association Annual Survey and the Area Resource File were used in this study. A random-effect logistic regression was used to analyze the relationship between organizational and environmental factors and the presence of hospital-based palliative care programs. FINDINGS: Hospitals with higher Medicare inpatient days, located in counties with higher Medicare managed penetration, and larger hospitals had greater odds of having a hospital-based palliative care program. Although hospitals in counties that have a higher percentage of individuals 65 years and older, for-profit and government hospitals were less likely to have a hospital-based palliative care program. PRACTICE IMPLICATIONS: Hospitals will vary in the organizational resources available to them, as such, administrators' awareness of the relationship between resources and palliative care programs can help determine the relevance of a program in their hospital.

Reported experiences with Medicaid managed care models among parents of children.

The proportion of children enrolled in Medicaid managed care arrangements has grown significantly over the past decade. Yet, few studies have attempted to assess differences in parental reports and ratings of care for children enrolled in different types of Medicaid managed care. We examine parental reports and ratings of care to explore whether and how patient and parent experiences vary by child health status and managed care plan type, including provider-sponsored specialized plans serving only children. Parents of children in a Florida Medicaid demonstration project in two counties over 3 years were surveyed using Consumer Assessment of Health Providers and Systems surveys (n = 2,741-11,067). Ordered logistic regression models with interaction terms were used to assess relationships between plan type, presence of chronic condition, and measures of patient experience. Parents of children enrolled in provider-sponsored plans that focus on pediatrics were more likely to provide a positive rating for their doctor, health plan, and specialty care compared to parents of children in an health maintenance organization (HMO). Parents of children with a chronic condition were less likely than parents of children without a chronic condition to provide a favorable rating of overall health care, their doctor, or health plan. The interaction term that assessed whether patient experience by plan type was impacted by the child's health status was not statistically significant. Parents of Medicaid children may prefer provider-sponsored arrangements over HMOs. Findings can inform the future development of other integrated models of care involving provider-sponsored arrangements, such as pediatric Accountable Care Organizations and Patient-Centered Medical Homes.

Incentives for healthy behaviors: experience from Florida Medicaid's Enhanced Benefit Rewards program.

OBJECTIVE: Engaging individuals in their own health care proves challenging for policy makers, health plans, and providers. Florida Medicaid introduced the Enhanced Benefits Rewards (EBR) program in 2006, providing financial incentives as rewards to beneficiaries who engage in health care seeking and healthy behaviors. METHODS: This study analyzed beneficiary survey data from 2009 to determine predictors associated with awareness of and participation in the EBR program. RESULTS: Non-English speakers, those in a racial and ethnic minority group, those with less than a high school education, and those with limited or no connection to a health care provider were associated with lower awareness of the program. Among those aware of the program, these factors were also associated with reduced likelihood of engaging in the program. Individuals in fair or poor health were also less likely to engage in an approved behavior. Individuals who speak Spanish at home and those without a high school diploma were more likely than other groups to spend their earned program credits. CONCLUSIONS: Findings underscore the fact that initial engagement in such a program can prove challenging as different groups are not equally likely to be aware of or participate in an approved activity or redeem a credit. Physicians may play important roles in encouraging participation in programs to incentivize healthy behaviors.

Competency assessment and development among health-care leaders: results of a cross-sectional survey.

In light of the challenges involved in leading a health care organization, it is important that the executives and managers charged with doing so are competent in a variety of areas. However, leading at all organizational levels does not necessarily require the same levels and types of competencies. The purpose of this research is to determine how well competency training works in health care organizations, and to obtain a better understanding of the competencies needed for leaders at different points of their careers and at various organizational levels. Ten health care management competency domains thought to positively influence job performance for health care executives are presented. The study seeks to answer four hypotheses related to self-perceptions of competencies and training opportunities at various hierarchical levels. A survey method was used to sample a subset of the healthcare executive population in the USA, based on three variables of interest, competency training opportunities, self-reported level of competency and hierarchical level. A series of Kruskal-Wallis and Mann-Whitney U tests were conducted to identify perceived differences in both competency level and training opportunities among respondents of various hierarchical levels. The most significant result of our research is that competency training is effective in health care organizations. The implications and need for additional research are discussed.

Distinguishing community benefits: tax exemption versus organizational legitimacy.

US policymakers continue to call into question the tax-exempt status of hospitals. As nonprofit tax-exempt entities, hospitals are required by the Internal Revenue Service (IRS) to report the type and cost of community benefits they provide. Institutional theory indicates that organizations derive organizational legitimacy from conforming to the expectations of their environment. Expectations from the state and federal regulators (the IRS, state and local taxing authorities in particular) and the community require hospitals to provide community benefits to achieve legitimacy. This article examines community benefit through an institutional theory framework, which includes regulative (laws and regulation), normative (certification and accreditation), and cultural-cognitive (relationship with the community including the provision of community benefits) pillars. Considering a review of the results of a 2006 IRS study of tax-exempt hospitals, the authors propose a model of hospital community benefit behaviors that distinguishes community benefits between cost-quantifiable activities appropriate for justifying tax exemption and unquantifiable activities that only contribute to hospitals' legitimacy.

A configurational view of executive selection behaviours: a taxonomy of USA acute care hospitals.

Health-care organizations, particularly hospitals, are among the most complex organizations to manage. However, the executive selection processes these organizations have in place are poorly understood. The purpose of this study is to explore the executive selection processes employed by USA acute care hospitals and discern if such processes are related to environmental, structural and strategic organizational characteristics. We conceptualize this model using a configurational approach. We present an empirically derived taxonomy of hospitals based on executive selection processes, structural and environmental characteristics, and organizational strategy based on the Porter framework. Based on the analyses, three types of hospitals are identified: (1) small, rural, cost leaders with limited selection processes; (2) large, urban, differentiators, with a plan; and (3) small, rural, caught in the middle muddlers.

Factors associated with hospital bankruptcies: a political and economic framework.

Between 2000 and 2006, 42 U.S. acute care hospitals filed for bankruptcy protection under federal law. This article explores hospital bankruptcies over a six-year period. Bankrupt hospitals are compared with their competitors, and hospitals surviving bankruptcy are compared with those organizations that eventually close. Finally, this article identifies nonfinancial factors associated with the filings and categorizes these factors into a political and economic framework. A literature review of hospital trade publications is used to identify organizations filing for bankruptcy during this period. Data gathered from these resources are used in concert with American Hospital Association data to identify hospital characteristics and publicly available information on factors surrounding hospital bankruptcy filings. Data on the status of hospitals after filing are also collected to determine whether bankruptcy reorganization is successful or results in hospital closure. Results indicate that 67 percent of hospitals filing for bankruptcy during this time eventually ceased operating. Bankrupt hospitals are smaller than their competitors. They are also less likely to belong to a system and more likely to be investor owned. Factors associated with filing organizations are placed into a political and economic framework derived from Park's work on municipal bankruptcy filings. Common nonfinancial factors associated with hospital bankruptcies include mismanagement, increased competition, and reimbursement changes.