Modeling hospital closure relative to organizational theory: The applicability of ecology theory's environmental determinism and adaptation perspectives

Abstract

The writers present a set of hypotheses testing the strength of organizational ecology theory's environmental determinism perspective and the adaptation perspective. Some of these hypotheses are analayzed relative to data on hospital closures in the United States between 1980 and 1985. Initial empirical analyses indicate that environmental determinism's liability of smallness holds relative to hospital closure, but the liability of newness doesn't hold. There are no published accounts where the liability of newness hypothesis hasn't held in research on other industries. The writers speculate that the inverse relationship between a highly changing health care environment and the liability of newness of hospitals may be because newer hospitals are better able to tap into the ongoing changes of the today's turbulent health care delivery environment in the United States. Also, analysis findings show that the environmental interdependence orientation of the adaptation models has some explanatory power in that hospitals with greater community support have much lower closure rates. Consideration of the more organization action oriented framework of the adaptation perspective is called for over the environmental determinism perspective that has been promoted in recent publications. The writers suggest that the more community sponsored a hospital is, the less likely its survival will hinge solely on standard environmental selection criteria, and that the ability of a hospital's administration to correctly adapt to environmental fluctuations is critical, especially in today's turbulent health care delivery environment in the United States.