HOSPITAL PERFORMANCE: AN EMPIRICAL EXAMINATION OF ORGANIZATIONAL PREDICTORS AND MODERATORS

This dissertation is divided into three distinct but interconnected studies on the factors that impact hospital financial performance. The first study reviews and integrates the empirical literature on the influence of organizational factors on hospital financial performance. The second study assesses the impact of hospital physician joint venture activity on hospital performance using a resource dependence and institutional theory framework. The third and final study assesses the impact of hospital readmissions on the financial performance of hospitals. The purpose of the first study was to examine five categories of organizational characteristics that research has addressed influence hospital financial performance: ownership, governance, integration, management strategy, and quality. Based on this review I was able to identify a general lack of consistency and conclusiveness across studies in each area. Exceptions were found in the areas of governance (e.g., physician participation and board processes) and integration (e.g., horizontal system centralization). The findings indicate that substantial opportunities for future work, including opportunities for qualitative and exploratory work. The purpose of the second study was to assess the impact of hospital physician joint venture activity on hospital performance using a resource dependence and institutional theory framework. Hospital performance is measured in general acute care facilities from 2004 through 2006 in the state of Pennsylvania using data from the Pennsylvania Health Care Cost Containment Council, the American Hospital Association Annual Survey, and the Area Resource File. I use cross-sectional ordinary least squares regression models to assess the relationship of joint ventures on performance and occupancy. I also focus on the moderating influence of hospital size and teaching status on occupancy and financial performance measurements. Results indicate that hospital physician joint venture activity significantly impacts occupancy and financial performance. Size moderates the positive association between joint ventures and iv performance. Specifically, smaller hospitals experience increases in total occupancy and stronger financial performance at a higher rate than larger hospitals. The goal of the third study was to study assesses the impact of hospital readmissions on the financial performance of hospitals. I use financial and hospital readmission data from the Pennsylvania Health Care Cost Containment Council for years 2003 through 2009. Market and organizational variables are from the American Hospital Association Annual Survey Database. Hospital Case-mix data is from Center for Medicare and Medicaid Services. The study combines exploratory factor analysis and multiple regression with random effects and clustering. I use a risk adjusted composite score of hospital readmissions in the multiple regression model as the independent variable. Results indicate hospital readmissions for complications or infections have a negative impact on financial performance. The findings of these studies taken together address a gap in the hospital performance literature. First, this research synthesizes the empirical scholarship examining the relationship between organizational factors on hospital financial performance. It provides suggestions regarding the substantial opportunities for future work, including opportunities for qualitative and exploratory work. Second, provides new insights into the moderating influence of hospital size on the positive association between hospital physician joint ventures and performance. Third, it is the first known study to assess the relationship between hospital financial performance and readmissions due to complications and infections. It provides insights for managers in simultaneously improving quality and reducing unplanned readmissions within a framework of future reimbursement changes that reward performance.