HEALTH MAINTENANCE ORGANIZATION ENVIRONMENT: AN EMPIRICAL STUDY OF THE RELATIONSHIP OF EXTERNAL CONTEXT AND PERFORMANCE

The research project is an extension of a series of administrative science and health care research projects evaluating the influence of external context, organizational strategy, and organizational structure upon organizational success or performance. The research will rely on the assumption that there is not one single best approach to the management of organizations (the contingency theory). As organizational effectiveness is dependent on an appropriate mix of factors, organizations may be equally effective based on differing combinations of factors. The external context of the organization is expected to influence internal organizational strategy and structure and in turn the internal measures affect performance (discriminant theory). The research considers the relationship of external context and organization performance.^ The unit of study for the research will be the health maintenance organization (HMO); an organization the accepts in exchange for a fixed, advance capitation payment, contractual responsibility to assure the delivery of a stated range of health sevices to a voluntary enrolled population. With the current Federal resurgence of interest in the Health Maintenance Organization (HMO) as a major component in the health care system, attention must be directed at maximizing development of HMOs from the limited resources available. Increased skills are needed in both Federal and private evaluation of HMO feasibility in order to prevent resource investment and in projects that will fail while concurrently identifying potentially successful projects that will not be considered using current standards.^ The research considers 192 factors measuring contextual milieu (social, educational, economic, legal, demographic, health and technological factors). Through intercorrelation and principle components data reduction techniques this was reduced to 12 variables. Two measures of HMO performance were identified, they are (1) HMO status (operational or defunct), and (2) a principle components factor score considering eight measures of performance. The relationship between HMO context and performance was analysed using correlation and stepwise multiple regression methods. In each case it has been concluded that the external contextual variables are not predictive of success or failure of study Health Maintenance Organizations. This suggests that performance of an HMO may rely on internal organizational factors. These findings have policy implications as contextual measures are used as a major determinant in HMO feasibility analysis, and as a factor in the allocation of limited Federal funds. ^

COMPARISON OF THE ORGANIZATIONAL STRUCTURES AND EFFECTIVENESS OF THE INVESTOR-OWNED AND VOLUNTARY MULTIHOSPITAL SECTORS

Objectives. The central objective of this study was to systematically examine the internal structure of multihospital systems, determining the management principles used and the performance levels achieved in medical care and administrative areas.^ The Universe. The study universe consisted of short-term general American hospitals owned and operated by multihospital corporations. Corporations compared were the investor-owned (for-profit) and the voluntary multihospital systems. The individual hospital was the unit of analysis for the study.^ Theoretical Considerations. The contingency theory, using selected aspects of the classical and human relations schools of thought, seemed well suited to describe multihospital organization and was used in this research.^ The Study Hypotheses. The main null hypotheses generated were that there are no significant differences between the voluntary and the investor-owned multihospital sectors in their (1) hospital structures and (2) patient care and administrative performance levels.^ The Sample. A stratified random sample of 212 hospitals owned by multihospital systems was selected to equally represent the two study sectors. Of the sampled hospitals approached, 90.1% responded.^ The Analysis. Sixteen scales were constructed in conjunction with 16 structural variables developed from the major questions and sub-items of the questionnaire. This was followed by analysis of an additional 7 structural and 24 effectiveness (performance) measures, using frequency distributions. Finally, summary statistics and statistical testing for each variable and sub-items were completed and recorded in 38 tables.^ Study Findings. While it has been argued that there are great differences between the two sectors, this study found that with a few exceptions the null hypotheses of no difference in organizational and operational characteristics of non-profit and for-profit hospitals was accepted. However, there were several significant differences found in the structural variables: functional specialization, and autonomy were significantly higher in the voluntary sector. Only centralization was significantly different in the investor owned. Among the effectiveness measures, occupancy rate, cost of data processing, total manhours worked, F.T.E. ratios, and personnel per occupied bed were significantly higher in the voluntary sector. The findings indicated that both voluntary and for-profit systems were converging toward a common hierarchical corporate management approach. Factors of size and management style may be better descriptors to characterize a specific multihospital group than its profit or nonprofit status. (Abstract shortened with permission of author.) ^