Institutional and economic influences on the adoption and extensiveness of managerial innovation in hospitals: The case of reengineering.

In the recent past, a number of managerial innovations--including product line management, total quality management, and reengineering--have swept through the hospital industry. Given their pervasiveness and their cost, understanding the mix of factors that influences their adoption is of theoretical interest and practical relevance. The research reported here focuses on this general question by examining influences on the adoption and extensiveness of a particular managerial innovation, hospital reengineering. The results suggest that while economic and institutional factors have influenced the adoption and extensiveness of hospital reengineering, institutional forces play a more important role. The greater influence of institutional forces may be attributed to the high degree of uncertainty in health care, the causal ambiguity of the innovation, and the anticipatory actions of hospitals attempting to position themselves in a rapidly changing environment.

Outcomes of hospital restructuring and reengineering. How is success or failure being measured?

Healthcare has undergone tremendous changes during the last decade. In response to external forces, institutions and systems have sought to increase efficiency, decrease waste and duplication, and reshape the way that care is delivered. The authors describe the outcomes of restructuring and reengineering efforts in United States hospitals during the years 1997-1999. Internal hospital-restructuring strategies, methods for evaluation, and unexpected outcomes are discussed as well as recommendations for future outcome evaluation.

Just how integrated are integrated delivery systems? Results from a national survey.

This article examines three emergent processes in physician-hospital integrated delivery systems (IDSs). We find these processes are underdeveloped based on data gathered from a national sample of hospitals drawn from nine health care systems. These processes are also loosely coupled with the structures used to integrate physicians and hospitals, as well as with the environmental context in which they occur. Such loose coupling entails both advantages and disadvantages for IDSs.

Hospital reengineering: an evolving management innovation: history, current status and future direction.

This article summarizes six years of research on reengineering in hospitals and is the result of two national surveys and eighteen site visits to hospitals that engaged in reengineering in the 1990s. The research shows that actual hospital reengineering differs substantially from that which was initially proposed by early promoters of reengineering. However, this evolved reengineering continues to be implemented by the majority of hospitals in the United States. The authors illustrate how extensive reductions of managers and changes of nursing models have been in the past six years. Data comparing financial and cost competitiveness changes are also shown. The authors then explore the continued experiences of two early proponents of reengineering and find that their competitive outcomes to be in contrast with their early statements. Finally, the authors suggest a number of reasons that may impact on the success or failure of reengineering.

Does reengineering really work? An examination of the context and outcomes of hospital reengineering initiatives.

OBJECTIVE: To examine the effect of reengineering on the competitive position of hospitals. Although many promises have been made regarding outcomes of process reengineering, little or no research has examined this issue. This article provides an initial exploration of the direct effects of reengineering on the competitive cost position of hospitals and the modifying effects of implementation factors. DATA SOURCES/STUDY SETTING: Obtained for primary data from a 1996/1997 national survey of hospital restructuring and reengineering sponsored by the American Hospital Association and the Leonard Davis Institute for Health Economics. Responses from approximately 30 percent of all U.S. acute care hospitals with 100 or more inpatient beds in metropolitan service areas were combined with American Hospital Association annual survey and InterStudy HMO data in this study. STUDY DESIGN: A first-difference multivariate regression was utilized to examine the effects of reengineering and other explanatory variables on the change in the cost position of a hospital's expenses per adjusted patient day relative to its market's costs per adjusted patient day. DATA COLLECTION/EXTRACTION METHODS: The survey of hospital restructuring and reengineering was mailed to hospital chief executive officers. The CEOs identified reengineering and restructuring hospital activities over the previous five years. The extensiveness and components of reengineering and internal restructuring were identified and used in the empirical analysis. PRINCIPAL FINDINGS: Results suggest that reengineering without integrative and coordinative efforts may damage an organization's cost position. The use of steering committees, project teams, codification of the change process, and executive involvement in core changes modifies the results of reengineering to improve an organization's competitive position. CONCLUSIONS: In a national sample of hospitals, reengineering alone was not found to improve the relative cost-competitive position. Organizations attempting to improve their cost competitiveness must consider the way in which change is implemented. This research suggests that the process of change may be as important as the change instrument. Additional research is needed to explore differences between early and late adopters.

The effects of reengineering: fad or competitive factor?

Healthcare organizations have often participated in managerial innovations that have promised to revolutionize their operations (e.g., management by objectives, quality circles, total quality management, and reengineering). Historically, such managerial innovations began with a few devout adherents, snowballed into widespread acceptance, and then faded as their popularity waned. This cycle of managerial adoption generally has been complicated by a lack of a consistent, clear definition of the innovation and little or no evaluation of its organizational effects. This article examines a current managerial innovation, reengineering, that after widespread adoption has now begun to fall out of favor with many executives. A clear, practical definition of reengineering is first offered, followed by an evaluation of the effect of reengineering on competitive hospital costs. Finally, factors that influence the results of reengineering are explored. Overall, reengineering did not statistically improve a hospital's cost position; however, we suggest that providing clear and consistent feedback, codifying the reengineering process, and involving executives in core changes are key means for improving reengineering outcomes. Specific examples of how these factors may be used to facilitate reengineering are provided. Reengineering may still be beneficial if it is properly implemented.

Reengineering hospitals: evidence from the field.

Current estimates suggest that over sixty percent of all U.S. hospitals are involved in reengineering initiatives. The level of investment is staggering; literally billions of dollars are being spent in the name of reengineering. Surprisingly little research has been reported, however, aimed at clarifying how this money is being spent (i.e., the content of reengineering) or identifying the management practices that facilitate or impede implementation. This paper summarizes extensive field research from fourteen hospitals across the country aimed at developing a clearer picture of reengineering. The research identifies seven components of hospital reengineering present in various configurations in the hospitals examined. Methods for facilitating reengineering are explored and eight major barriers recognized. Site specific examples are provided to illustrate how the facilitators and barriers work in practice.

Owned vertical integration and health care: promise and performance.

This article examines the alleged benefits and actual outcomes of vertical integration in the health sector and compares them to those observed in other sectors of the economy. This article concludes that the organizational models on which these arrangements are based may be poorly adapted to the current environment in health care.