Community orientation in hospitals: an institutional and resource dependence perspective.

OBJECTIVE: To conceptualize community orientation-defined as the generation, dissemination, and use of community health-need intelligence-as a strategic response to environmental pressures, and to test a theoretically justified model of the predictors of community orientation in hospitals. DATA SOURCES: The analysis used data for 4,578 hospitals obtained from the 1994 and 1995 American Hospital Association (AHA) Annual Survey and the 1994 Medicare Hospital Cost Report data sets. Market-level data came from the Area Resource File. STUDY DESIGN: Multiple regression analysis was used to examine the effects of hospital size, dependence on managed care, ownership, network, system and alliance memberships, and level of diffusion of community-orientation practices in the area on the degree of community orientation in hospitals. The model, based on Oliver's (1991) framework of organizational responsiveness to environmental pressures, controlled for the effects of industry concentration and lagged profitability. PRINCIPAL FINDINGS: Degree of community orientation is significantly related to hospital size; ownership; dependence on managed care; and membership in a network, system, or alliance. It is also significantly related to the diffusion of community-orientation practices among other area hospitals. CONCLUSIONS: Degree of community orientation is influenced by the nature of environmental pressures and by hospital interests. It is higher in hospitals that are large, nonprofit, or members of a network, system, or alliance; in hospitals that are more dependent on managed care; and in hospitals that operate in areas with higher diffusion of community-orientation activities.

Organizational and environmental factors associated with nursing home participation in managed care.

OBJECTIVE: To develop and test a model, based on resource dependence theory, that identifies the organizational and environmental characteristics associated with nursing home participation in managed care. DATA SOURCES AND STUDY SETTING: Data for statistical analysis derived from a survey of Directors of Nursing in a sample of nursing homes in eight states (n = 308). These data were merged with data from the On-line Survey Certification and Reporting System, the Medicare Managed Care State/County Data File, and the 1995 Area Resource File. STUDY DESIGN: Since the dependent variable is dichotomous, the logistic procedure was used to fit the regression. The analysis was weighted using SUDAAN. FINDINGS: Participation in a provider network, higher proportions of resident care covered by Medicare, providing IV therapy, greater availability of RNs and physical therapists, and Medicare HMO market penetration are associated with a greater likelihood of having a managed care contract. CONCLUSION: As more Medicare recipients enroll in HMOs, nursing home involvement in managed care is likely to increase. Interorganizational linkages enhance the likelihood of managed care participation. Nursing homes interested in managed care should consider upgrading staffing and providing at least some subacute services.

Managerial implications of corporate board involvement and perceived market competition for quality improvement in nursing homes.

This study examines the relationships among corporate board involvement, total quality management (TQM) adoption, perceived market competition, and the perceived effect of quality improvement (QI) activities for a sample of nursing homes in Pennsylvania. The findings of this study have several implications for healthcare managers interested in maximizing the effectiveness of QI efforts. Board involvement in quality improvement was an important predictor of QI outcomes in the areas of finance, resident care, and human resources. However, TQM adoption had a positive effect on human resources outcomes only. These findings suggest that board involvement in any organized form of QI may be more important than the adoption of a formal TQM program in the nursing home industry. TQM's emphasis on employee empowerment may account for its positive influence on human resources. Perceived competition was associated with better financial outcomes. Low-cost leadership can be a key to survival in more competitive markets, requiring a focus on efficiency and productivity issues in QI efforts. By focusing on process improvement, the facilities may achieve cost reductions that can result in an improved financial position. Facilities perceived to be in more competitive environments were also more likely to adopt TQM. This is consistent with the assertion by resource-dependence theorists that organizations facing competition for resources must be responsive to the needs of resource-providing constituencies.

Resource dependence and institutional elements in nursing home TQM adoption.

OBJECTIVE: To examine the contextual attributes that influence nursing home TQM adoption, as informed by resource dependence and institutional theories. DATA SOURCES: A survey of licensed nursing home administrators in the Commonwealth of Pennsylvania during 1994-1995, the Medicare and Medicaid Annual Certification Survey (MMACS) data file, and the Area Resource File (ARF). STUDY DESIGN: Because the dependent variable (TQM adoption vs. non-adoption) is dichotomous, the model was estimated using logistic regression. DATA COLLECTION: Of the 615 facilities that were mailed surveys, 241 (39.2%) returned completed questionnaires. No significant differences were observed between respondents and nonrespondents in size, for-profit status, system membership, registered nurse staffing, cited licensure deficiencies, Medicare census, or Medicaid census. PRINCIPAL FINDINGS: Perceived competition, Medicare's share of total hospital discharges in the market, and facility Medicare census were significant predictors of TQM adoption. CONCLUSIONS: Our results provide limited support for the association between some rational adaptive and institutional factors and TQM adoption in nursing homes. Perceived competition and the influence of the Medicare program both at the facility and the market level are associated with TQM adoption. However, other factors associated with TQM adoption in other industries, such as size, are not associated with TQM adoption in the nursing homes in this study.

Organizational structure and the delivery of primary care to older Americans.

OBJECTIVE: To explore how internal factors, such as organizational size, mission, ownership, and managerial communication and control structures, affect the delivery of primary care to older Americans across a wide variety of practice settings: ambulatory practices, hospitals, nursing homes, and home healthcare agencies. DESIGN: Use of the structure/process/outcome paradigm and contingency theory to examine the empirical research linking structural factors to outcomes. CONCLUSION: Using these studies as a background, we consider the implications for the provision of primary care to older Americans including the impact of evolving intraorganizational structure in healthcare organization.

Quality improvement in nursing homes.

Regulation, competition, and cost containment have focused attention on quality improvement in nursing homes. Definition, measurement, and monitoring of quality are essential components of any program designed for quality assurance or continuous quality improvement.

Specialization and diversification in the nursing home industry.

Recent increases in the types of services offered by nursing facilities and in the formation of specialized care units have resulted in the emergence of two distinct but broadly defined types of services: subacute and long-term care. The authors examine the market, regulatory, and structural incentives behind diversification and specialization and speculate how these trends will affect the future of the nursing home industry.

Quality improvement in nursing care facilities: extent, impetus, and impact.

This study examines the extent, motivation, and performance implications of normal quality improvement (QI) programs in Pennsylvania nursing care facilities. Responses to a 20-item survey sent to facility administrators indicate that continuous quality improvement/total quality management (CQI/TQM) adopters are more motivated by quality of care and human resource concerns in implementing QI, more satisfied with the results of QI efforts, and more aware of a competitive environment than are non-adopters. There are few differences between adopters and non-adopters with respect to organizational characteristics or performance on quality of care measures. Comparison with the results of a study of QI implementation in hospitals reveals some differences in motivation, but similarities in satisfaction with results.

Organizational and environmental factors in hospital alliance membership and contract management: a resource-dependence perspective.

Using a resource-dependence perspective, we analyze the association between organizational and environmental characteristics and the likelihood that non-profit hospitals will enter into one of two forms of interorganizational relationship (IOR): hospital alliance membership or contract management (n = 1,661). The former is representative of high autonomy IORs, while the latter is representative of low autonomy IORs. Results of logistic regression analysis indicate that hospitals with greater resources and more favorable payer mix are more likely to join alliances, an IOR form which minimizes loss of autonomy. In addition, facilities operating in less favorable environments are more likely to be contract managed and less likely to be alliance members.

The impact of market and organizational characteristics on nursing care facility service innovation: a resource dependency perspective.

OBJECTIVE: Using resource dependency theory as a conceptual framework, this study investigates both the organizational and environmental factors associated with an emerging health care service delivery innovation, the provision of specialty care in designated units in nursing care facilities. We consider two types of specialty units, Alzheimer's Disease and subacute care. DATA SOURCES: The Medicare/Medicaid Automated Certification Survey (MMACS) data file was merged with local market area data obtained from the 1992 Area Resource File and with state level regulatory data. STUDY DESIGN: The likelihood of providing Alzheimer's Disease or subacute care in dedicated units was estimated by separate logistic regressions. PRINCIPAL FINDINGS: Results indicate that facilities with fewer Medicare patients are more likely to operate a dedicated Alzheimer's care unit, while facilities located in markets with a large HMO population and greater hospital supply are more likely to operate a subacute care unit. While competition among nursing homes, for the most part, is an incentive to innovate, greater regulatory stringency appears to constrain the development of specialty care units of both types. Finally, organizational characteristics (e.g., size and proprietary status) appear to be important enabling factors influencing the propensity to provide specialty care in dedicated units. CONCLUSIONS: Nursing care facilities are moving toward providing specialty care units partly as a response to a growing demand by resource providers and to maintain a competitive edge in tighter markets. Loosening regulation directed at cost containment would further encourage the development of specialty care but should be preceded by some evaluation of population needs for specialty care and the effectiveness of specialty care units.

The effects of ownership, operating environment, and strategic choices on nursing home efficiency.

This article reports on a study of the labor efficiency of 461 nursing homes located in Pennsylvania. Data envelopment analysis was used to estimate efficiency scores. Tobit equations were estimated for the entire sample and for subsamples consisting of for-profit (FP) and not-for-profit (NFP) nursing homes. The authors found that the major factors explaining efficiency were managerial and environmental characteristics such as ownership, occupancy rate, size, payment source, wage rate, and per capita income, rather than quality characteristics of nursing homes. Analysis of the FP and NFP subsamples suggests that many NFP homes may respond to environmental pressures by increasing their efficiency, whereas FP homes tend to operate at a high level of efficiency irrespective of environmental and regulatory pressures.

Subacute care, Medicare benefits, and nursing home behavior.

Two policy changes in 1988, one administrative and one legislative, allowed greater Medicare coverage of subacute care in skilled nursing facilities (SNFs). The Medicare Catastrophic Coverage Act (MCCA) of 1988, in conjunction with an administrative directive, or transmittal, from the Health Care Financing Administration (HCFA), changed the Medicare SNF benefit structure substantially. In this study, we specified a simultaneous equation system to explain the effects of the benefit changes on Medicare use. The results suggest that the two policy changes increased Medicare use in Pennsylvania SNFs substantially; however, the increase was associated with facility and case mix characteristics, which suggest that the increase was largely attributable to reclassification of current patients from other payer categories, Medicaid and self-pay, rather than new admissions. The effects of the MCCA and the HCFA transmittal on increased Medicare use were unanticipated and have important implications for the way in which subacute care is defined and financed in future benefit discussions.

Structure, environment and strategic outcome: a study of Pennsylvania nursing homes.

This study applies Porter's model of competitive advantage to the nursing home industry. Discriminant analysis is used to identify organizational and environmental characteristics associated with nursing homes which have demonstrated valued strategic outcomes, and to distinguish the more successful nursing homes from their rivals. The results of the discriminant analysis suggest that nursing homes with superior payer mix outcomes are distinguishable from their less successful rivals in areas associated with a focused generic strategy. The study suggests that nursing homes which are better staffed, of smaller size and lower price are more likely to achieve high levels of self-pay utilization. Independent living units, continuing care retirement communities in particular, are likely to act synergistically with nursing home organizational characteristics to enhance competitive advantage by linking the value chain of the nursing home to that of retirement housing. Nursing homes with higher proportions of Medicare were found to provide a unique product when compared to their rivals. Profit status does not discriminate better self-pay strategic utilization, but for-profit facilities are more likely to pursue a Medicare strategy. Concern was raised that, as nursing homes become more strategically oriented, Medicaid access may become more problematic.

Organizing for nursing home quality.

This article explores the relationship between job, work group, and organizational design and the quality of nursing home care. Contingency theorists contend that effective organizations develop structures that support the nature of their production processes and complement their environment. Within the same facility, units with differing care requirements should be structured differently to achieve quality outcomes. Efforts to improve quality can be integrated through the practice of total quality management and facilitated by using the Health Care Financing Administration Minimum Data Set.

Do for-profit and not-for-profit nursing homes behave differently?

The purpose of this study was to examine behavioral differences between for-profit (FP) and not-for-profit (NFP) nursing homes. Previous studies have failed to establish consistent behavioral differences. This study uses a simultaneous equation model to control for potential endogeneity among system variables, with model parameters estimated using 3SLS. The study provides evidence that NFPs provide significantly higher quality of care to Medicaid beneficiaries and to self-pay residents than do FPs, as evidenced by better staffing and better outcomes among nursing homes with residents at higher risk for adverse outcomes.

Medicare-certified home health services: national and regional supply in the 1980s.

The number of Medicare-certified home health agencies nearly doubled from 1980 to 1990. Using Health Care Financing Administration data, this study documented national and regional patterns of entry and exist by Medicare home health providers from 1980 to 1990. Nationally, agency origination rates accelerated during the early 1980s and then dropped abruptly in the second half of the decade. The proprietary sector, accounting for approximately 42% of agencies in existence during the period of the study, exhibited the greatest volatility. Regional differences are also evident. Both expansion and contraction in Medicare home health services appear to be a response to the incentives of legislation implemented during this period.

Strategic groups, performance, and strategic response in the nursing home industry.

OBJECTIVE: This study examines the effect of strategic group membership on nursing home performance and strategic behavior. DATA SOURCES AND STUDY SETTING: Data from the 1987 Medicare and Medicaid Automated Certification Survey were combined with data from the 1987 and 1989 Pennsylvania Long Term Care Facility Questionnaire. The sample consisted of 383 Pennsylvania nursing homes. STUDY DESIGN: Cluster analysis was used to place the 383 nursing homes into strategic groups on the basis of variables measuring scope and resource deployment. Performance was measured by indicators of the quality of nursing home care (rates of pressure ulcers, catheterization, and restraint usage) and efficiency in services provision. Changes in Medicare participation after passage of the 1988 Medicare Catastrophic Coverage Act (MCCA) measured strategic behavior. MANOVA and Turkey HSD post hoc means tests determined if significant differences were associated with strategic group membership. FINDINGS: Cluster analysis produced an optimal seven-group solution. Differences in group means were significant for the clustering, performance, and conduct variables (p < .0001). Strategic groups characterized by facilities providing a continuum of care services had the best patient care outcomes. The most efficient groups were characterized by facilities with high Medicare census. While all strategic groups increased Medicare census following passage of the MCCA, those dominated by for-profits had the greatest increases. CONCLUSIONS: Our analysis demonstrates that strategic orientation influences nursing home response to regulatory initiatives, a factor that should be recognized in policy formation directed at nursing home reform.

Nursing home special care units: distribution by type, state, and facility characteristics.

We used the 1991-92 Medicare and Medicaid Automated Certification Survey (MMACS) to document the distribution of nursing home special care units by type, state, and facility characteristics. Of the 16,105 facilities in our sample, 9.5% have at least one of eight types of specialty care units. Overall, special care beds as a percentage of total beds vary from 0.0% in South Carolina to 11.43% in Idaho. More non-profit facilities have special care units than for-profits (12.0% vs 8.5%), and more chain-affiliated facilities than independent facilities. Issues of access, efficacy, and cost are considered.

Selecting international markets: lessons from for-profit hospitals.

As growth potential in the U.S. market declines and regulatory constraints increase, providers of health-related services may look increasingly to international opportunities as a way to supplement the lost domestic market. In this article, critical factors bearing on the decision to compete in international markets are identified. Existing theories of multinational competition are expanded to provide a framework for analyzing international competition. Applied in the context of the proprietary hospital industry, the critical factors governing both the selection of foreign markets and mode of entry are proposed to be host country receptivity and market growth potential.