MODELING CONTROL IN THE HOSPITAL ORGANIZATION: A SOCIAL SYSTEM IN TRANSITION

Abstract

Diagnosis related groups (DRGs), as a newly-implemented prospective payment system, has brought about profound changes in the way health care is delivered and financed. Thus, the implementation of DRGs provided an opportunity to examine critically the introduction of a new system of control. A model of control was developed and utilized to examine the nature and functioning of the control system in two hospital organizations. The case-study approach relied predominantly upon moderately-scheduled interviews with administrators, physicians, nurse, technicians, medical records personnel, and other selected individuals. Analysis of interview data required close examination of the choices that individuals made in communicating with each other about DRGs. The overall goal of this research was to organize the findings into an interpretation of the system of control. The conclusion that can be drawn from the findings reported in this research is that administrators utilized cooptation through their selection of strategies for communicating directives, monitoring behaviors, and communicating incentives and penalties. Both administrators\u27 and physicians\u27 perceptions of degree of control confirmed the existence of the state of tension between formal authority and social power which Selznick (1953, 1948) cites as a condition that leads to the formulation of cooptation as a mechanism for organizational control