Date of Award

12-18-2020

Degree Type

Dissertation

Degree Name

Doctor of Business Administration (DBA)

Department

Business

First Advisor

Dr. Subhashish Samaddar

Second Advisor

Dr. Satish Nargundkar

Third Advisor

Dr. Aaron M. Baird

Abstract

EXTENDED ABSTRACT

What community and organizational factors affect care and financial performance of U.S. hospitals?

Prepared by:

Esther Chance

Georgia State University

Executive Doctorate in Business – Class of 2020

Committee Chair: Dr. Subhashish Samaddar

SUMMARY

Hospitals are connected to people's social and economic conditions because they play a vital role in society’s view of wellness and well-being. “Despite a huge dedication of resources to healthcare in the United States, the medical system does not deliver safe, effective, efficient, patient-centered, timely, and equitable care as recommended by the Institute of Medicine (Bush, 2007).” Hospitals' challenges are with maintaining sustainable care and financial performance. My research suggests that community and organizational factors influence care and financial performance. Previous literature addresses community and organizational factors independently, while my research contribution is to determine both individually and collectively, the impact of these factors on U.S. hospital performance. My research will focus on understanding the interplay of these relationships using secondary data and applying a mixed-exploration research methodology supported by literature.

INTRODUCTION

The analysis of healthcare spending and the corresponding quality of hospitals' care performance motived this research. Hospitals have experienced significant cost pressures for decades. While healthcare costs have exceedingly increased, quality continues to underperform. “Among other wealthy countries, the U.S. ranks dead last in clinical outcomes yet costs more than $3 trillion a year (Pearl, 2017).” The research reviews the influence of community characteristics on hospital performance. Hospitals are considered anchors institutions within their communities and represent the kind of care and concern that the government and citizens want for their communities.

Additionally, the changes and shifts in the hospital's organizational structure is equally important. For example, hospital for-profit ownership has recently increased with uncertain implication for healthcare costs. Hospital trends show a transition to a more centralized model that expects lower prices and improved quality. I aim to investigate the impact of community and organizational factors on hospital performance. In reviewing community components, I observe the state’s household income, number of residents, ethnicity-majority white, unemployment rate, and political affiliation. The organizational factors include the hospitals’ ownership, organizational type, taxonomy - centralization, and case mix index. I will restrict the hospital’s size by controlling for the hospital's total assets and total admissions.

THEORETICAL FRAMEWORK

This research paper focuses on the effect of structure and ownership as organizational factors on hospital performance. Within the theoretical framework, I will incorporate structural contingency theory. Structural contingency theory holds that there is "no one best way" or structural type optimal for all organizations (Donaldson, 2016). Instead, the structure is appropriate if it meets the organization's objectives. Many organizational structures derive from ownership, which can evolve (Vitez, 2018). This research paper focuses on observations of hospital ownership on performance. Research supports that care and financial performance is critical to the hospitals' objectives. Most hospitals invest in a cost to quality approach (Rappleye, 2016). Hospital performance will use care performance based on hospital star ratings. Additionally, I base financial performance on the hospital's operating margin. In addition to determining the factors that will affect hospital performance, I will evaluate ownership and hospital performance against the principles of the structural contingency theory to assess the influence of “fit” for optimal structure.

METHODS AND RESEARCH DESIGN

I will follow an exploratory data analysis, literature-supported, quantitative approach. This research was carried out by collecting secondary data first. I did an exploration of the data to understand the data distribution itself and the categorization of variables. In my preliminary analysis, I used SPSS to run descriptive statistics and employed the univariate model to understand the variables' variance and tendencies. With the first stage of exploration complete and in conjunction with theory, I came up with my model. Continuing with the spirit of an exploratory study, I ran bivariate analysis constructed from these relationships to see how the model developed. Based on these results, I had better insights into the data and expectations of relationships. I conducted multivariate analyses and included a summary of the analysis results.

To obtain these, I individually and collectively tested the variables as shown below in my research model.

Research Model

Data Source

Community Factors:

Data used was independently collected from the Henry J Kaiser Family Foundation State Health Facts. KFF serves as a non-partisan source of facts, analysis, and journalism for policymakers, the media, the health policy community, and the public. Kaiser’s products and information are free of charge (Kaiser, 2017).

Organizational Factors and Hospital Performance:

The data used was secondary data purchased from the American Hospital Association (AHA) and the Healthcare Cost Report Information System (HCRIS). The AHA is a national, not-for-profit association that advocates for nearly 5,000 hospitals, health care systems, networks, other providers of care, and 43,000 individual members (AHA, 2018). The AHA is committed to improving communities, aggregating hospital data, and creating trend analysis on utilization, personnel, revenue, expenses, and community health indicators. The Centers for Medicare and Medicaid Services (CMS) provides a cost report that contains provider information and financial statement data. CMS maintains the cost report data in the Healthcare Provider Cost Reporting Information System (HCRIS) (CMS, 2019).

CONTRIBUTION

My anticipated contribution to science and practice would be in:

(1) the consideration of the structural contingency theory on the organizational structure of U.S. hospitals and hospital performance

(2) evaluating organizational factors relevant in the U.S. hospitals collectively and independently to find significance, appropriateness, and weight of importance

(3) identifying and assessing community factors that impact care and financial performance

(4) gaining broader knowledge of the U.S. hospital industry, hospital data and data sources, and the influence of community and organizational factors on hospital performance

DISCUSSION

This research will produce an appreciation for the effect of community and organizational factors on the broad and complex hospital system's performance. This paper will expand previous literature's dimension by comparing information on organizational structures to identify deficiencies, progress, inefficiencies, and inequality that impact care and financial performance. “Improving U.S. hospital performance and controlling healthcare costs depends on the resurgent belief, both medical and social, in compassion and community as well as clinical capabilities and consumerism" (Bush, 2007). Patient-centered care and cultural transformation is complex and a long-term endeavor. My research is multifaceted and applicable to multiple hospitals, providing evidence that organizational and community factors influence performance.

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