Change in the population of health systems: from 1985 to 1998.

This article compares the predictions in Stephen Shortell's 1988 seminal article, The Evolution of Hospital Systems: Unfulfilled Promises and Self-Fulfilling Prophesies, with current data on health systems over a 14-year period from 1985 to 1998. Specifically, we review five of Shortell's predictions related to the horizontal growth of health systems and compare these predictions with empirical data on structural changes in the population of health systems. Our analyses suggest that Shortell's predictions corresponded to much of the actual behavior demonstrated in the population over the past one-and-a-half decades. Support was found for the following: (1) health systems form in two recurring stages; (2) previously unaffiliated hospitals are affiliating with existing systems rather than participating in the creation of new systems; and (3) health systems have evolved into five different strata, each of which represents different shares of the population; such population patterns have important implications for individual hospitals and health systems. By attending to patterns of change in the industry's social structure, hospitals and health systems can determine whether it is likely to continue along past trajectories or whether it shows signs of change that may pave way for the breakdown of existing organizational forms, entry of new organizational players, and the emergence of new governance structures.

Physician involvement in management and governance: the moderating effects of staff structure and composition.

Many hospitals are actively pursuing strategies that integrate physicians into their management and governance structures. Despite expectations that these strategies improve hospital efficiency, empirical studies have failed to provide consistent evidence that physician involvement in hospital management and governance improves hospital efficiency. This article examines factors that may moderate the relationship between physician participation in hospital management and governance and hospital efficiency.

Trust between managers and physicians in community hospitals: the effects of power over hospital decisions.

Trust is a key element of effective work relationships between managers and physicians. Despite its importance, little is known about the factors that promote trust between these two professional groups. We examine whether manager and physician power over hospital decisions fosters manager-physician trust. We expect that with more power, managers and physicians will have greater control to enforce decisions that benefit the interests of both groups. Subsequently, they may gain confidence that their interests are supported and have more trust for each other. We test proposed hypotheses with data collected in a national study of chief executive officers and physician leaders in community hospitals in 1993. Findings indicate that power of managers and physicians over hospital decisions is related to manager-physician trust. Consistent with our expectations, physicians perceive greater trust between the two groups when they hold more power in four separate decision-making areas. Our hypotheses, however, are only partially supported in the manager sample. The relationship between power and trust holds in only one decision area: cost/quality management. Our findings have important implications for physician integration in hospitals. A direct implication is that physicians should be given the opportunity to influence hospital decisions. New initiatives, such as task force committees with open membership or open forums on hospital management, allow physicians a more substantial involvement in decisions. Such initiatives will give physicians more "voice" in hospital decision making, thus creating opportunities for physicians to express their interests and play a more active role in the pursuit of the hospital's mission and objectives.

Effects of market position and competition on rural hospital closures.

OBJECTIVE: To examine the dynamic effects of competition and hospital market position on rural hospital closures. DATA SOURCE/STUDY SETTING: Analysis of all rural community hospitals operating between 1984 and 1991, with the exception of sole-provider hospitals. Data for the study are obtained from four sources: the AHA Annual Surveys of Hospitals, the HCFA Cost Reports, the Area Resource File, and a hospital address file constructed by Geographic Inc. DATA COLLECTION AND ANALYSIS: Variables are merged to construct pooled, time-series observations for study hospitals. Hospital closure is specified as a function of hospital market position, market level competition, and control variables. Discrete-time logistic regressions are used to test hypotheses. PRINCIPAL FINDINGS: Rural hospitals operating in markets with higher density had higher risk of closure. Rural hospitals that differentiated from others in the market on the basis of geographic distance, basic services, and high-tech services had lower risks of closure. Effects of market density on closure disappeared when market position was included in the model, indicating that differentiation in markets should be taken into account when evaluating the effects of competition on rural hospital closure. CONCLUSIONS: Our findings suggest that rural hospitals can reduce competitive pressures through differentiation and that accurate measures of competition in geographically defined market areas are critical for understanding competitive dynamics among rural hospitals.

State legislation and policy affecting rural hospital conversion and closure.

Many rural hospitals have closed or converted to organizations that provide health services other than general, acute inpatient care. However, little is known about why rural hospitals convert rather than close. This study evaluates the relationship between state policy and rates of rural hospital conversion relative to rates of rural hospital closure. The expectation was that the relationship among state policies and rates of conversion and rates of closure differs as a function of whether a state policy facilitates rural hospital transition to alternative models of care or supports them in their existing form. National data were analyzed for all rural hospitals from 1984 to 1991. Results indicate that state policies have done little to facilitate widespread adoption of conversion among rural hospitals. Despite these findings, results also indicate that some state policies have resulted in an increase in the rate of rural hospitals conversions as an alternative to closure.

Determinants of profound organizational change: choice of conversion or closure among rural hospitals.

Because of severe operating and resource constraints, many rural community hospitals are confronted with pressures to abandon core strategies related to acute inpatient care. Little is known, however, about why hospitals would choose to convert to organizations that provide non-acute care health services as an alternative to closure. We argue that rural hospitals are more likely to convert when conditions are in place that enable them to make major shifts from their current domains to ones that are more hospitable. To the extent that resources are available in alternative domains and rural hospitals possess the strategies necessary to exploit these resources, rural hospitals are more likely to convert rather than close. To examine our proposed hypotheses, we analyze national data from all rural hospitals from 1984 through 1991. Results indicate that conversion is more likely to occur than closure when resources in the market are abundant, competition for hospital resources is high, and hospitals have established strategies to provide alternative forms of health care. Findings from this study indicate that environmental and organizational factors can increase a rural hospital's risk of conversion as an alternative to closure.

Determinants of rural hospital conversion. A model of profound organizational change.

One widely discussed response to the severe problems faced by many rural hospitals is to convert them into organizations that provide health services other than general, acute inpatient care. This study identifies conversions that occurred nationally from 1984 to 1991. The study also empirically examines the determinants of conversion, using rural hospitals that did not convert (between 1984 and 1991) as a comparison group. The authors examine a set of factors that makes radical organizational change necessary (eg, poor performance) and reduces resistance to such change (eg, proximity to other hospitals). Results from discrete-time logistic regression show that converters are more likely than nonconverters to: have poor performance and fewer beds; be located very near to or very distant from similar hospitals; operate in larger communities; devote more of their care to areas other than acute inpatient care; and be members of multihospital systems. Converters also are less likely to be government owned. The need for future research on the effects of conversion is discussed.