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1) In a paper (1,000-1,250 words), compare and contrast the major

elements of the reports by Coyne et al. and Messina et al., listed in the Module 2 Readings.

3) Prepare this assignment according to the APA guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.

Hospital Cost and Efficiency: Do Hospital Size and Ownership Type Really Matter? Coyne, Joseph S, DrPH ; Richards, Michael Thomas ; Short, Robert, PhD ; Shultz, Kim ; Singh, Sher G ; et al. Journal of Healthcare Management 54.3 (May/Jun 2009): 163-74; discussion 175-6. Abstract The primary research queston ±his s±udy addresses is whe±her size and ownership ±ype make a diference in ±he eFciency and cos± resul±s o² hospi±als in Washing±on S±a±e. A ²ur±her queston is on wha± ²ac±ors migh± explain such diferences. The da±a source is ±he hospi±al ³nancial da±a repor±s Washing±on hospi±als submi± ±o ±he Washing±on Depar±men± o² Heal±h. The sample was res±ric±ed ±o no±-²or-pro³± and governmen±-owned hospi±als, given ±ha± ±hese ownership ±ypes are predominan± in Washing±on S±a±e, and ±here are only ±wo inves±or-owned hospi±als. The measures o² eFciency and cos± represen± ±he generally accep±ed ³nancial indica±ors derived ²rom ±he heal±hcare ³nancial managemen± li±era±ure. These ³ndings deserve ²ur±her s±udy on a regional or natonal level. A more scient³c s±udy o² ±he eFciency and cos± o² hospi±als by size and ownership ±ype would be impor±an± ±o con±rol ²or case mix, scope o² services, and payer mix. The primary research question this study addresses is, do size and ownership type make a difference in the efficiency and cost results of hospitals in Washington State? A further question is, what factors might explain such differences? The data source is the hospital financial data reports Washington hospitals submit to the Washington Department of Health. The sample was restricted to not-for-profit and governmentowned hospitals, given that these ownership types are predominant in Washington State, and there are only two investor-owned hospitals. The measures of efficiency and cost represent the generally accepted financial indicators derived from the healthcare financial management literature. Cost and efficiency in these hospitals are analyzed using five efficiency ratios and five cost measures. The results are significant for five of the ten measures studied. Measured by occupancy percentage, small and large not-for-profit hospitals appear to achieve higher efficiency levels than government-owned hospitals do, but the larger hospitals of both ownership types report greater efficiency than that achieved by smaller hospitals. In terms of costs, small, not-for-profit hospitals report comparable costs to those of the largest hospitals, likely because 70 percent of the small not-for-profits are critical access hospitals. These findings deserve further study on a regional or national level. A more scientific study of the efficiency and cost of hospitals by size and ownership type would be important to control for case mix, scope of services, and payer mix. Such studies can generate important findings about the relationship of hospital size and ownership type to efficiency and cost. Conducted on a
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national level, such studies would provide policymakers with the empirical data they need to make decisions regarding the types of hospitals to encourage or discourage in the future. Hospital size has long been an area of discussion and debate in the U.S. healthcare industry. Questions have consistently focused on cost management or efficiency in large versus small hospitals. A persistent question among researchers is whether efficiencies are associated with larger facilities through economies of scale, or if there are alternate scenarios that play a significant part in hospital cost and efficiency. PRIOR STUDIES Researchers have used a wide variety of performance measures to compare hospital performance by organization size. In an earlier study, Coyne (1982) examined performance differences between system and independent hospitals using two cost measures (cost per case and payroll per patient day) and two efficiency measures (admissions per bed and full-time equivalents [FTEs] per occupied bed). Griffith, Alexander, and Jelinek (2002) examined cash flow, asset turnover, mortality, complications, length of inpatient stay, cost per case, occupancy, change in occupancy, and percent of revenue from outpatient care. When considering the content validity, reliability, sensitivity, and independence of all nine variables, the authors found that all measures except the two occupancy measures are good gauges of hospital performance. Pink and colleagues (2006), with a technical advisory group, created a financial indicators report specifically for critical access hospitals (CAHs). It includes 20 ratios found to be useful by the chief financial officers of CAHs for measuring profitability, liquidity, revenue, cost, and utilization. Griffith and colleagues (2006) analyzed Medicare data from more than 2,500 hospitals for a five-year period ending in 2003 that showed only a few of their nine measures exhibited signs of improvement, with most indicating volatility or only modest improvements. Prior hospital performance research findings have been inconclusive in regard to hospital size, such that further study is needed. Yafchak (2000) examined the possibility that hospitals gain economies of scale as size increases. He found that prior to 1994 there were diseconomies of scale in nonteaching hospitals, and that from 1989 to 1997 there were economies of scale, overall, in larger hospitals. Ozcan and Luke (1993) found that hospital ownership and percentage of Medicare were the factors most associated with hospital efficiency, and facility size was consistently and positively related to efficiency due to economies of scale. This article analyzes the cost and efficiency by size of not-for-profit and government-owned hospitals in the state of Washington. Five efficiency ratios and five cost measures were used. The primary research question is, do size and ownership type make a difference in the efficiency and cost results of hospitals in Washington state? A further question addressed is, what factors might explain the results of this analysis and provide some recommendations for managerial policies and practices in hospitals? METHODS Measures and Data
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The Relationship between Patient Satisfaction and Inpatient Admissions across Teaching and Nonteaching Hospitals Daniel J. Messina, PhD, FACHE, LNHA ,senior Vice president and chief operating officer, Central State Healthcare System, Freehold, New Jersey; Dennis J. Scotti, PhD, FACHE, FHFMA, Alfred E. Driscoll Professor, Healthcare and Life Sciences Management, Fairleigh Dickinson University, Teaneck, New Jersey; Rodney Caney, PhD, founder, Press Caney Associates, South Bend, Indiana; And Cenevieve Pinto Zipp, EdD, PT, chair and associate professor, Graduate Programs in Health Sciences, Seton Hall University, South Orange, New Jersey The need for healthcare executives to better understand the relationship between patient satisfaction and admission volume takes on greater importance in this age of rising patient expectations and declining reimbursement. Management of patient satisfaction has become a critical element in the day-to-day operations of healthcare organizations pursuing high performance. This study is guided by two principal research questions. First, what is the nature of the relationship between patient satisfaction (as measured by scored instruments) and inpatient admissions in acute care hospitals? Second, does the relationship between patient satisfaction (as measured by scored instruments) and inpatient admissions differ between teaching hospitals and nonteaching hospitals? Although not suggestive of direct causation, the study findings revealed a statistically significant and positive correlation between patient satisfaction and admission volume in teaching hospitals only. In contrast, a nonsignificant, negative correlation was seen between patient satisfaction and admission in nonteaching hospitals. In the combined teaching and nonteaching sample, a statistically significant, negative correlation was found between patient satisfaction scores and admission volume. With financial performance being driven in part by admission volume and with patient satisfaction affecting hospital patronage, the business case for a strategic focus on patient satisfaction in teaching hospitals is clearly evident. The article concludes with a set of recommendations for strengthening patient satisfaction and organizational performance. ********** In today's healthcare marketplace, providers increasingly compete against one another for business. In the late 1980s, healthcare executives were confronted with the realization that they could not just increase charges to generate revenue, but rather they had to contain costs as well. Providers now compete on business factors other than price, such as quality, service, reputation, and other nonmonetary attributes. Ettinger (1998) stressed that successful competition relies on the provider retaining awareness of who it wants to serve, what value it creates for the customer, and how it ,,viii create that value operationally. In the end, the provider needs to be strategic rather than tactical and proactive rather than reactive. Providers must shift their focus externally to the consumers' requirements rather than their own.
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The need for research regarding patient satisfaction and market share is evident in this age of declining reimbursement and rising patient expectations. Monitoring patient satisfaction has become a standard operating procedure in most healthcare organizations, especially with new Medicare reporting requirements under the HCAHPS program. While patient satisfaction has been widely studied, a gap exists between the impact of customer satisfaction and organizational performance (Kovner and Neuhauser 2004). The purpose of this research is to study the relationship between patient satisfaction and inpatient admissions among teaching and nonteaching hospitals. The use of inpatient admissions in this study functions as an indicator of volume rather than as a surrogate measure of hospital size. According to Simone (1999), academic healthcare institutions represent an eclectic mix of traditional academia, hospital operations, multiple academic layers, and patients. Today's teaching hospitals, compared with the nonteaching hospitals, are complex organizations trying to perform an often conflicting array of responsibilities. This complex environment can be organizationally and politically challenging to individuals working in such an environment and, as this study begins to explore, may affect patient satisfaction. Furthermore, a teaching hospital's central mission is to provide specialized tertiary care that supports its central objective of training new physicians. In contrast, nonteaching hospitals are organizations that provide general medical-surgical care in an environment that is not focused on training and educating physicians. Two principal research questions frame this study. First, what is the nature of the relationship between patient satisfaction (as measured by scored instruments) and inpatient admissions in acute care hospitals? Second, does the relationship between patient satisfaction (as measured by scored instruments) and inpatient admissions differ between teaching hospitals and nonteaching hospitals? LITERATURE REVIEW Although teaching and nonteaching hospitals alike continue their struggle to capture admissions and, ultimately, market share, research on the relationship between patient satisfaction and volume of admissions has been somewhat limited. A prominent aspect of the relatively sparse body of literature on patient satisfaction as a driver of performance is the difficulty in quantifying customer satisfaction's direct impact on financial indicator outcomes. Accordingly, substitute measures, such as market share or service volume, are often employed as surrogate indicators of organizational performance. Woodside, Frey, and Daly (1989) provided early evidence to support the premise that patient satisfaction may directly affect volume. The authors conducted an exhaustive literature review of service quality and satisfaction measurement. Based on this review, they developed a framework of relationships among service quality, customer satisfaction, and behavioral intention for service purchases. Service quality, customer satisfaction, and behavioral intention data were collected from patients discharged from two hospitals. Overall customer satisfaction was associated (r = 0.85, p = 0.05) with behavioral intention to return to both hospitals. Despite some question of the generalizability of a two-hospital study, the research does provide substantial evidence for a meaningful relationship between overall customer satisfaction and behavioral intention for buying a major service. A further, recent example of the link between patient satisfaction and
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