Managing hospitals in turbulent times: do organizational changes improve hospital survival?

Abstract

Objective: To examine (1) the degree to which organizational changes affected hospital survival; (2) whether core and peripheral organizational changes affected hospital survival differently; and (3) how simultaneous organizational changes affected hospital survival.

Data sources: AHA Hospital Surveys, the Area Resource File, and the AHA Hospital Guides, Part B: Multihospital Systems.

Study design: The study employed a longitudinal panel design. We followed changes in all community hospitals in the continental United States from 1981 through 1994. The dependent variable, hospital closure, was examined as a function of multiple changes in a hospital's core and peripheral structures as well as the hospital's organizational and environmental characteristics. Cox regression models were used to test the expectations that core changes increased closure risk while peripheral changes decreased such risk, and that simultaneous core and peripheral changes would lead to higher risk of closure.

Principal findings: Results indicated more peripheral than core changes in community hospitals. Overall, findings contradicted our expectations. Change in specialty, a core change, was beneficial for hospitals, because it reduced closure risk. The two most frequent peripheral changes, downsizing and leadership change, were positively associated with closure. Simultaneous organizational changes displayed a similar pattern: multiple core changes reduced closure risk, while multiple peripheral changes increased the risk. These patterns held regardless of the level of uncertainty in hospital environments.

Conclusions: Organizational changes are not all beneficial for hospitals, suggesting that hospital leaders should be both cautious and selective in their efforts to turn their hospitals around.