Market and Organizational Factors Associated with Teaching Hospital Participation in Strategic Hospital Alliances

MARKET AND ORGANI ZATIONAL FACTORS ASSOCIATED WITH TEACHING. HOSPITAL PARTICIPATION IN STRATEGIC HOSPITAL ALLIANCES James D . Bramble , Ph . D . Virginia Commonwealth University, 1 9 9 8 Maj or Director : Roice D . Luke , Ph . D . Thi s research invest igated market and organi zat ional factors that influence the strategic dec isions of teaching hospi tals to part ic ipate in strategic hospital all iances ( SHAs ) . I t described the characteri stics of both teaching hospitals and the health care envi ronment in which they operate . This research also examines the assoc iat ion of these factors with the strategic position of teaching hospitals in terms of their dominance in the market or within their organi zat ions . The theoretical model used two concepts from ins t itut ional theorycoerc ive and normative pressures . I t was argued that coercive pressures in the market faci l i tated the dec i s ion to part ic ipate in SHAs and gain market and Organi zat ional dominant pos it ions . Alternatively, normat ive organi zational pressures were argued to hinder the process of part icipat ing in SRAs and gaining market and organi zational dominance . .ix An important f inding of this research was that high levels of SRA penetration had a negat ive influence on a l l three dependent variabl es , SRA part i c ipat ion , market dominance , and organizational dominance . Thi s finding suggest s that as market consolidation advances , teaching hospitals may f ind i t diff icult to parti c ipate in SRAs or gain positions of dominance . In addit i on to the SRA penetration measure there were a number of other relationships of interest . SRA part icipation was related to the percent of large employers in the market and the teaching hospital ' s net revenue . Market dominance was related to the percent of large group practices and the percent of primary care phys icians in the market as wel l as the profit status of the teaching hospital . Organi zational dominance was related to the profit status and the admini strat ive structure of the teaching hospital . CHAPTER 1 Introduct ion Teaching hospitals are an important part of America ' s health care system . In addit ion to their sophi sticated technology and cutt ing edge research, they deliver a l arge percentage of health care services throughout the country (Igl ehart , 1993 ) . They also deliver a di sproport ionate share of charity and indigent care . Although only a small percentage of all short -term, nonf ederal acute care hospitals are classif ied as members of the Counci l of Teaching Hospitals and Health Systems , they represent approximately one fourth of all the beds and admi ss ions across the country . However, in recent years , teaching hospitals have faced decl ining support for indigent care , decreas ing demands for special ist phys icians , and increas ing cl inical competit ion in their local markets ( Luke & Bramb l e , 1 996 ; Moy , Valent e , Levin, Bhak , & Grine r , 1996 ) . Increasing compet i t ion for pat ients among hospitals has become especially important in l ight of hospital consol idat ion into fewer organi zat ions and aggressive system to compete for managed care contracts ( Luke & Olden , 1 9 9 5 ) . Thus one goal of this study i s to examine how increas ing competition