Does innovation influence the performance of healthcare organizations?

Abstract

Innovation is a widely studied field. It is extremely important for any organization wishing to achieve and maintain a competitive advantage in the market, even though assessing the impacts of innovation represents a challenge due to the difficulty of isolating and measuring it. Furthermore, healthcare institutions are facing an increasing need for innovation in order to become competitive and offer new treatments for patients. Surprisingly, little is known about the nature of innovativeness in healthcare organizations and its relationship with performance. The aim of this research is to analyze whether the several types of innovation influence the relevant measures of performance in healthcare institutions, researching empirically the innovativeness–performance relationship. The study is based on a quantitative analysis on 34 Portuguese hospitals, collecting detailed information about the innovation portfolio of each one. Factor analysis and hypothesis testing were applied. Moreover, the hospitals were classified by type of property and geographical region they belong to, and statistical comparative tests were performed to test the existence of statistical differences. It was found that organizational innovation is correlated with process innovation and service innovation. Furthermore, service and process innovations influence operational performance. However, we cannot conclude that innovation in healthcare units has an overall impact on their financial performance. The results of this study may help hospital administrators to make better decisions with regard to their innovation policy design.