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The effect of experience, ownership and focus on productive efficiency: A longitudinal study of U.S. hospitals
Author(s) -
Ding David Xin
Publication year - 2014
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/j.jom.2013.10.002
Subject(s) - productive efficiency , factory (object oriented programming) , health care , business , organizational economics , quality (philosophy) , affect (linguistics) , focus (optics) , longitudinal data , marketing , operations management , psychology , industrial organization , economics , microeconomics , production (economics) , sociology , computer science , economic growth , philosophy , communication , epistemology , programming language , physics , demography , optics
Focusing on organizational learning research in healthcare settings, this paper studies how experience, ownership and focus affect productive efficiency in U.S. hospitals. Building on organizational learning theory, health economics and the focused factory concept, we propose that hospitals learn to improve productive efficiency and the relationship between productive efficiency and cumulative experience is curvilinear. We also hypothesize that clinical focus has a positive effect on productive efficiency and that nonprofit hospitals and proprietary hospitals trade off costs and quality differently. The proposed hypotheses are tested with yearly performance data for over 3700 major U.S. hospitals spanning from 1996 to 2010. We find strong support for the proposed hypotheses.