What Can We Learn From the Existing Evidence of the Business Case for Investments in Nursing Care: Importance of Content, Context, and Policy Environment

Decisions of health care institutions to invest in nursing care are often guided by mixed and conflicting evidence of effects of the investments on organizational function and sustainability. This paper uses new evidence generated through Interdisciplinary Nursing Quality Research Initiative (INQRI)-funded research and published in peer-reviewed journals, to illustrate where the business case for nursing investments stands and to discuss factors that may limit the existing evidence and its transferability into clinical practice. We conclude that there are 3 limiting factors: (1) the existing business case for nursing investments is likely understated due to the inability of most studies to capture spillover and long-run dynamic effects, thus causing organizations to forfeit potentially viable nursing investments that may improve long-term financial stability; (2) studies rarely devote sufficient attention to describing the content and the organization-specific contextual factors, thus limiting generalizability; and (3) fragmentation of the current health care delivery and payment systems often leads to the financial benefits of investments in nursing care accruing outside of the organization incurring the costs, thus making potentially quality-improving and cost-saving interventions financially unattractive from the organization\u27s perspective. The payment reform, with its emphasis on high-quality affordable patient-centered care, is likely to strengthen the business case for investments in nursing care. Methodologically rigorous approaches that focus on broader societal implications of investments in nursing care, combined with a thorough understanding of potential barriers and facilitators of nursing change, should be an integral part of future research and policy efforts

The Welfare Consequences of Hospital Mergers

In the 1990s the US hospital industry consolidated. This paper estimates the impact of the wave of hospital mergers on welfare focusing on the impact on consumer surplus for the under-65 population. For the purposes of quantifying the price impact of consolidations, hospitals are modeled as an input to the production of health insurance for the under-65 population. The estimates indicate that the aggregate magnitude of the impact of hospital mergers is modest but not trivial. In 2001, average HMO premiums are estimated to be 3.2% higher than they would have been absent any hospital merger activity during the 1990s. In 2003, we estimate that because of hospital mergers private insurance rolls declined by approximately .3 percentage points or approximately 695,000 lives with the vast majority of those who lost private insurance joining the ranks of the uninsured. Our estimates imply that hospital mergers resulted in a cumulative consumer surplus loss of over $42.2 billion between 1990 and 2001. It is estimated that all but a modest$95.4 million of the loss in consumer surplus is transferred from consumers to providers.

Did the HMO Revolution Cause Hospital Consolidation?

During the 1990s US healthcare markets underwent a significant transformation. Managed care rose to become the dominant form of insurance in the private sector. Also, a wave of hospital consolidation occurred. In 1990, the mean population-weighted hospital Herfindahl-Hirschman Index (HHI) in a Health Services Area (HSA) was .19. By 2000, the HHI had risen to .26. This paper explores whether the rise in managed care caused the increase in hospital concentration. We use an instrumental variables approach with 10-year differences to identify the relationship between managed care penetration and hospital consolidation. Our results strongly imply that the rise of managed care did not cause the hospital consolidation wave. This finding is robust to a number of different specifications.

The Welfare Consequences of Hospital Mergers

In the 1990s the US hospital industry consolidated. This paper estimates the impact of the wave of hospital mergers on welfare focusing on the impact on consumer surplus for the under-65 population. For the purposes of quantifying the price impact of consolidations, hospitals are modeled as an input to the production of health insurance for the under-65 population. The estimates indicate that the aggregate magnitude of the impact of hospital mergers is modest but not trivial. In 2001, average HMO premiums are estimated to be 3.2% higher than they would have been absent any hospital merger activity during the 1990s. In 2003, we estimate that because of hospital mergers private insurance rolls declined by approximately .3 percentage points or approximately 695,000 lives with the vast majority of those who lost private insurance joining the ranks of the uninsured. Our estimates imply that hospital mergers resulted in a cumulative consumer surplus loss of over $42.2 billion between 1990 and 2001. It is estimated that all but a modest$95.4 million of the loss in consumer surplus is transferred from consumers to providers

Management practices and the quality of care in cardiac units

Importance:- To improve the quality of health care, many researchers have suggested that health care institutions adopt management approaches that have been successful in the manufacturing and technology sectors. However, relatively little information exists about how these practices are disseminated in hospitals and whether they are associated with better performance. Objectives:- To describe the variation in management practices among a large sample of hospital cardiac care units; assess association of these practices with processes of care, readmissions, and mortality for patients with acute myocardial infarction (AMI); and suggest specific directions for the testing and dissemination of health care management approaches. Design:- We adapted an approach used to measure management and organizational practices in manufacturing to collect management data on cardiac units. We scored performance in 18 practices using the following 4 dimensions: standardizing care, tracking of key performance indicators, setting targets, and incentivizing employees. We used multivariate analyses to assess the relationship of management practices with process-of-care measures, 30-day risk-adjusted mortality, and 30-day readmissions for acute myocardial infarction (AMI). Setting:- Cardiac units in US hospitals. Participants_ Five hundred ninety-seven cardiac units, representing 51.5% of hospitals with interventional cardiac catheterization laboratories and at least 25 annual AMI discharges. Main Outcome Measures:- Process-of-care measures, 30-day risk-adjusted mortality, and 30-day readmissions for AMI. Results:- We found a wide distribution in management practices, with fewer than 20% of hospitals scoring a 4 or a 5 (best practice) on more than 9 measures. In multivariate analyses, management practices were significantly correlated with mortality (P = .01) and 6 of 6 process measures (P < .05). No statistically significant association was found between management and 30-day readmissions. Conclusions and Relevance:- The use of management practices adopted from manufacturing sectors is associated with higher process-of-care measures and lower 30-day AMI mortality. Given the wide differences in management practices across hospitals, dissemination of these practices may be beneficial in achieving high-quality outcomes. Interest in quality improvement in health care during the past 10 years has been associated with a handful of important successes.1- 3 However, improvements in the quality of care have been slower than many would have hoped for,4- 8 and quality is still highly variable across organizations.9 Although significant effort has been focused on the use of evidence-based medicine—clinical practices that lead to better care—an interest in organizational strategies and management practices that enable and incentivize high-quality health care is emerging.10- 15 One of the most active areas of interest is in the use of management practices with origins in manufacturing, including, for example, “Lean” methodologies developed at Toyota16 or the use of balanced scorecard approaches that originated in the technology sector.17 These management approaches can be characterized as a set of formalized tools, the use of which is intended to improve quality through multiple pathways, such as eliminating inefficient and variable practices; engaging providers in a collaborative, team-based approach; and structuring mechanisms for setting targets and tracking progress. However, the evidence on the potential effectiveness of these approaches in health care is relatively weak13,18 and consists primarily of single-site studies.19- 21 To address this gap in knowledge, we present a new framework and instrument for defining key management dimensions and for measuring them on a large scale in health care organizations. We describe the variation in management practices among a large sample of hospitals; assess its association with processes of care, readmissions, and mortality for patients with acute myocardial infarction (AMI); and suggest specific directions for the testing and dissemination of health care management approaches

Determinants of Information Technology Outsourcing Among Health Maintenance Organizations

We extend transaction cost economics by examining the effect of relaxing two of its underlying assumptions. First, transaction cost economics relies on an assumption of risk neutrality. We argue that organizations transactions vary in the risk they impose on an organization and that organizations are more likely to embed riskier transactions within a hierarchy. Second, transaction cost economics assumes that transactions are independently organized. We argue that organizations have an underlying propensity to organize transactions through hierarchy or contracting and that this underlying propensity is related to an organization’s capabilities, such as absorptive capacity. The analysis shows that transaction organization is a function of transaction risk. Transaction risk, rather than uncertainty or firm asset specificity, is the most important factor determining transaction organization. And, the analysis shows that transaction organization is a function of an organization’s absorptive capacity and technological diversity. This means that transactions within an organization are interdependent