Hospital Integration and Vertical Consolidation: An Analysis of Acquisitions in New York State

While prior studies tend to view hospital integration through the lens of horizontal consolidation, I provide an analysis of its vertical aspects. I examine the effect of hospital acquisitions in New York State on the distribution of market share for major cardiac procedures across providers in target markets. I find evidence of benefits to acquirers via business stealing, with the resulting redistribution of volume across providers having small effects, if any, on total welfare with respect to cardiac care. The results of this analysis--along with similar assessments for other services--can be incorporated into future studies of hospital consolidation.

Cohort Turnover and Productivity: The July Phenomenon in Teaching Hospitals

The impact of labor turnover on productivity has received a great deal of attention in the literature on organizations. We consider the impact of cohort turnover -- the simultaneous exit of a large number of experienced employees and a similarly sized entry of new workers -- on productivity in the context of teaching hospitals. In particular, we examine the impact of the annual July turnover of house staff (i.e., residents and fellows) in American teaching hospitals on levels of resource utilization (measured by risk-adjusted length of hospital stay) and quality (measured by risk-adjusted mortality rates). Using patient-level data from roughly 700 hospitals per year over the period from 1993 to 2001, we compare monthly trends in length of stay and mortality for teaching hospitals to those for non-teaching hospitals, which, by definition, do not experience systematic turnover in July. We find that the annual house-staff turnover results in increased resource utilization (i.e., higher risk-adjusted length of hospital stay) for both minor and major teaching hospitals and decreased quality (i.e., higher risk-adjusted mortality rates) for major teaching hospitals. Further, these effects with respect to mortality are not monotonically increasing in a hospital's reliance on residents for the provision of care. In fact, the most-intensive teaching hospitals manage to avoid significant effects on mortality following this turnover. We provide a preliminary examination of the roles of supervision and worker ability in explaining the ability of the most-intensive teaching hospitals to reduce turnover's negative effect on performance.

Fluid Tasks and Fluid Teams: The Impact of Diversity in Experience and Team Familiarity on Team Performance

In this paper, we consider how the structures of tasks and teams interact to affect team performance. We study the effects of diversity in experience on a team's ability to respond to task changes, by separately examining interpersonal team diversity (i.e., differences in experience across the entire team) and intrapersonal team diversity (i.e., whether individuals on the team are more or less specialized). We also examine whether team familiarity - team members' prior experience working with one another - helps teams to better manage challenges created by task changes and greater interpersonal team diversity. Using detailed project- and individual-level data from an Indian software services firm, we find that the interaction of task-change with intrapersonal diversity is related to improved project performance, while the interaction of task-change with interpersonal diversity is related to diminished performance. Additionally, the interaction of team familiarity with interpersonal diversity is related to improved project performance in some cases. Our results highlight a need for more nuanced approaches to leveraging experience in team management.Diversity, Knowledge Work, Project Flexibility, Task Change, Team Familiarity

Technological Development and Medical Productivity: The Diffusion of Angioplasty in New York State

A puzzling feature of many medical innovations is that they simultaneously appear to reduce unit costs and increase total costs. We consider this phenomenon by examining the diffusion of percutaneous transluminal coronary angioplasty (PTCA) -- a treatment for coronary artery disease -- over the past two decades. We find that growth in the use of PTCA led to higher total costs despite its lower unit cost. Over the two decades following PTCA's introduction, however, we find that the magnitude of this increase was reduced by between 10% and 20% due to the substitution of PTCA for CABG. In addition, the increased use of PTCA appears to be a productivity improvement. PTCAs that substitute for CABG cost less and have the same or better outcomes, while PTCAs that replace medical management appear to improve health by enough to justify the cost.

The Effect of Organizational Context on Individual Performance

Several observers have suggested that highly skilled workers convey little in the way of competitive advantage for firms due to their mobility. Implicit in this view is the belief that organizations are not important in determining the performance of such individuals. In this study, we address this issue by examining skilled individuals who work within multiple organizations roughly simultaneously. Specifically, we consider the performance of cardiac surgeons, many of whom perform operations at multiple hospitals during the course of a given year. Using patient mortality as an outcome measure, we find that the quality of a surgeon's performance at a given hospital improves significantly with increases in his or her annual procedure volume at that hospital but does not significantly improve with increases in his or her volume at other hospitals. Our findings suggest that surgeon performance is not fully portable across hospitals (i.e., some portion of performance is firm specific). We consider the implications of our results for settings beyond health care.

Variation in Experience and Team Familiarity: Addressing the Knowledge Acquisition-Application Problem

Prior work in organizational learning has failed to find a consistent effect of variation in experience on performance. While some studies find a positive relationship between these two variables, others find no effect or even a negative relationship. In this paper, we suggest that the differences in prior findings may be due to the failure to separate the processes of knowledge acquisition and knowledge application. While variation in experience may permit the acquisition of valuable knowledge, additional mechanisms may be necessary to enable the subsequent application of that knowledge in a team setting. We hypothesize that team familiarity - prior experience working with team members - may be such a mechanism. We use detailed project- and individual-level data from an Indian software services firm to examine the effects of team familiarity and variation in market experience on multiple measures of performance for over 1,100 software development projects Consistent with prior work, we find mixed results for the effect of variation in experience on performance. We do, however, see evidence of a moderating effect of team familiarity on the relationship between these two variables. Our paper identifies one mechanism for uniting knowledge acquisition and knowledge application and provides insight into how the management of experience accumulation affects the development of organizational capabilities.Experience, Knowledge, Software, Team Familiarity, Variation

The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery

During the past two decades, several public and private organizations have initiated programs to report publicly on the quality of medical care provided by specific hospitals and physicians. These programs have sparked broad debate among economists and policy makers concerning whether, and to what extent, they have improved or harmed medical productivity. We take advantage of a cross-sectional time series of different hospitals to address two fundamental questions about quality reporting. First, we examine whether report cards affect the distribution of patients across hospitals. Second, we determine whether report cards lead to improved medical quality among hospitals identified as particularly bad or good performers. Our data are from the longest-standing effort to measure and report health care quality the Cardiac Surgery Reporting System (CSRS) in New York State. Using data for 1991 through 1999, we find that CSRS affected both the volume of cases and future quality at hospitals identified as poor performers. Poor performing hospitals lost relatively healthy patients to competing facilities and experienced subsequent improvements in their performance as measured by risk-adjusted mortality.

The Effects of Cardiac Specialty Hospitals on the Cost and Quality of Medical Care

The recent rise of specialty hospitals -- typically for-profit firms that are at least partially owned by physicians -- has led to substantial debate about their effects on the cost and quality of care. Advocates of specialty hospitals claim they improve quality and lower cost; critics contend they concentrate on providing profitable procedures and attracting relatively healthy patients, leaving (predominantly nonprofit) general hospitals with a less-remunerative, sicker patient population. We find support for both sides of this debate. Markets experiencing entry by a cardiac specialty hospital have lower spending for cardiac care without significantly worse clinical outcomes. In markets with a specialty hospital, however, specialty hospitals tend to attract healthier patients and provide higher levels of intensive procedures than general hospitals.

Fluid Tasks and Fluid Teams: The Impact of Diversity in Experience and Team Familiarity on Team Performance

In this paper, we consider how the structures of tasks and teams interact to affect team performance. We study the effects of diversity in experience on a team\u27s ability to respond to task changes by separately examining interpersonal team diversity (i.e., differences in experience across the entire team) and intrapersonal team diversity (i.e., whether individuals on the team are more or less specialized). We also examine whether team familiarity—team members\u27 prior experience working with one another—helps teams to better manage challenges created by task changes and greater interpersonal team diversity. Using detailed project- and individual-level data from an Indian software services firm, we find that the interaction of task change with intrapersonal diversity is related to improved project performance, whereas the interaction of task change with interpersonal diversity is related to diminished performance. Additionally, the interaction of team familiarity with interpersonal diversity is related to improved project performance in some cases. Our results highlight a need for more nuanced approaches to leveraging experience in team management