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Objective: To assess a widely recognized multihospital system taxonomy., Data Sources: The original taxonomy was based on American Hospital Association (AHA) Annual Survey Data for the years 1994 and 1995 and a reexamined version, on 1998 AHA data., Study Design: We assess the appropriateness of using data designed to capture local hospital/system interrelationships to develop a taxonomy of multihospital systems. DATA ABSTRACTION METHODS: The original and reexamined taxonomies used dichotomous measures of service availability, physician practice ownership, and managed care offerings., Principal Findings: The data and measures used to formulate the taxonomy are not appropriate for classifying multihospital systems at the company level., Conclusions: Taxonomic studies of multihospital systems are very much needed; future taxonomic studies should make clear distinctions between systems at local versus company levels.

Objective: This study examines the formation of local hospital systems (LHSs) in urban markets by the end of 1992. We argue that a primary reason why hospitals join LHSs is to achieve improved positions of market power relative to threatening rivals., Data Sources/data Collection: The study draws from a unique database of LHSs located in and around metropolitan statistical areas (MSAs). Data were obtained from the 1991 AHA Annual Hospital Survey, updated to the year 1992 using information obtained from multiple sources (telephone contacts of systems, systems lists of hospitals, published changes in ownership, etc.). Other measures were obtained from a variety of sources, principally the 1989 Area Resources File., Study Design: The study presents cross-sectional analyses of rival threats and other factors bearing on LHS formation. Three characteristics of LHS formation are examined: LHS penetration of urban areas, LHS size, and number of LHS members located just outside the urban boundaries. LHS penetration is analyzed across urban markets, and LHS size and rural partners are examined across the LHSs., Principal Findings: Major hypothesized findings are: (1) with the exception of the number of rural partners, all dependent variables are positively associated with the number of hospitals in the markets; the rural partner measure is negatively associated with the number of hospitals; (2) the number of doctors per capita is positively associated with all but the rural penetration measure; and (3) the percentage of the population in HMOs is positively associated with local cluster penetration and negatively associated with rural system partners. Other findings: (1) average income in the markets is negatively associated with all but the rural penetration measure; (2) LHS size and rural partners are both positively associated with nonprofit system ownership; and (3) they are also both negatively associated with the degree to which their multihospital systems are geographically concentrated in a single state., Conclusions: The findings generally support the argument that LHS formation is the product of hospital providers attempting to improve positions of power in their local markets.

Using a sample of 3,000 urban hospitals, this article examines the contributions of selected hospital characteristics to variations in hospital technical efficiencies, while it accounts for multiple products and inputs, and controls for local environmental variations. Four hospital characteristics are examined: hospital size, membership in a multihospital system, ownership, and payer mix (managed care contracts, percent Medicare, and percent Medicaid). Ownership and percent Medicare are consistently found to be related significantly to hospital efficiency. Within the ownership variable, government hospitals tend to be more efficient and for-profit hospitals less efficient than other hospitals. Higher percentages of Medicare payment are negatively related to efficiency. While not consistently significant across all five of the MSA size categories in which the analyses are conducted, possession of managed care contracts, membership in a multihospital system, and size all are consistently related positively to hospital technical efficiency. These variables are also all significant when the hospitals are examined in a combined analysis. Percent Medicaid was not significant in any of the analyses. Implications for policy and the need for methodological work are discussed.

Using a national data base of urban hospitals, the effect of ownership (government, nonprofit, and for-profit) on the technical efficiency of hospitals was examined. Efficiency scores were computed using a method called data envelopment analysis. Controlling for environmental and hospital characteristics, for-profit hospitals were found somewhat less frequently and government hospitals consistently more frequently in the efficient category. When examining highly inefficient hospitals as a percentage of those receiving inefficient scores, for-profit hospitals appeared to be highly inefficient relative to the other ownership forms. Government and nonprofit hospitals were somewhat indistinguishable from one another regarding their percentages of highly inefficient scores. For-profit hospitals also tended to use supply and capital asset (hospital size) inputs less efficiently, and service and labor inputs more efficiently than hospitals in the other ownership categories.

The strategic behaviors of small multihospital systems have received little attention in the literature despite the fact that small systems are the predominant scale among multihospital systems. This study examines one important aspect of small-system strategic behaviors: the birth-order or evolutionary patterns of hospital acquisition. The evolutionary patterns of acquisition are compared across three strategic model types studied elsewhere: local market, investment, and historical. Using data obtained from a variety of sources, local market model systems are found, in the sequence of acquisition, to be significantly different from the other two model types in terms of relative distances of acquisitions from the initiating or parent hospital, the sizes of acquisition hospitals, the complexity of those hospitals, and the likelihood that the acquisitions are located in rural areas. Differences between parents and acquisitions are also significant, as hypothesized, for the market model system types, although they are not generally significant for the other two model types. The findings suggest that the market model represents an important strategic form that may have important implications for the restructuring of hospital markets.

This study examined the effect of group affiliation on the use of technical (length of stay, lab tests, etc.) and clinical (rendering and requesting consultations) resources by physicians practicing within a large acute care hospital. Comparisons in use were made between physicians in 1) a prepaid group practice (Colorado Permanente Medical Group [Kaiser]); 2) a fee-for-service group practice; and 3) "unaffiliated" physicians. Patient data were adjusted whenever possible for patient diagnosis and severity. In comparison to other physicians in the hospital, the prepaid group physicians utilized somewhat fewer technical resources, though the results were not statistically significant. Differences in the use of clinical resources were statistically significant, with the fee-for-service group physicians using consulting services the most and prepaid group physicians using them the least. The results indicate that 1) fee-for-service group structures may reinforce the incentives to share in consultation revenues; 2) prepaid group physicians may experience difficulty becoming integrated into the informal structures of physician practice patterns; and 3) the control of groups over the use of technical hospital resources may be substantially weakened when groups do not own or control the hospitals to which they admit their patients.

This study has attempted to determine the relationship between physician domain of practice and their quality of medical care. The study examined whether there was a quality difference in practice either 1) between general practitioners and specialists, or 2) between specialists practicing within and outside their specialty domains. The sample consisted of 454 physicians of Hawaii, involving 18 specialty categories: general practitioners (133) and specialists (321). The study finds that when the general practitioners in this study practices without limitation, their quality of care was not as good as that of the specialists. The study also found that when the specialists practiced outside their specialty areas, the relative quality of their performance declined. The latter finding was sustained even when other important practice and background variables were held constant. The study also discusses its generalizability and policy implications.

In response to significant political, governmental, and socioeconomic changes affecting the health care industry, health care organizations are forming a wide variety of loosely coupled interorganizational arrangements. In this article, loosely coupled forms are classified according to the extent to which they are designed to achieve strategic purposes. The quasi firm is defined as a loosely coupled arrangement created to achieve long-lasting and important strategic purposes. Mechanisms that are needed to ensure the continuity of quasi firms are explored, and an agenda for further research is given.

Strategic behaviors of organizations can be classified along two dimensions--growth orientations, or patterns of evolution over time, and action orientations, or strategic aggressiveness in undertaking a particular growth orientation. We create measures of growth and action orientations for small multihospital systems and test the validity of the growth and action orientation typologies, using data from a sample of small multihospital systems. Growth and action orientations do appear to exist independently of each other, and they are related to the ownership status of the systems. Not-for-profit and church-other systems exhibit similar strategic orientations, unlike those of Catholic and investor-owned systems.

The study has attempted to determine how client/colleague dependence influences medical care received by patients. We have tested physician compliance with standards of care according to the degree to which the practice is visible to, and dependent upon, colleagues. Physician performance is measured in terms of compliance with established professional standards in five areas of practice: 1) the quality of medical care; 2) appropriateness of hospital admissions; 3) appropriateness of length of hospital stay; 2) overstays and 5) understays. The sample consisted of 3316 hospital episodes from 22 general hospitals in the state of Hawaii, and the analysis was conducted via multiple-classification analysis (MCA). Specifically, it was found that from the more colleague-dependent physicians, patients received care with: 1) higher scores on an index of quality of care; 2) more justified admissions; 3) more appropriate lengths of stay; 4) fewer overstays; but 5) more understays. These results remained even after adjusting for a number of physician, client and type-of-practice variables. The findings of this study suggest the significant role that the informal structure of physician practice plays in influencing physician performance. Various sociological implications for control of professional practice are discussed in terms of 1) provision of incentives to encourage an increase in the formalization of otherwise informal physician relationships, and 2) tying formal control mechanisms to informal processes of control.