US Health Care Industry Research Articles

Stakeholder enrolment and business network formation: a process perspective on technology innovation

Entrepreneurial healthcare firms rarely possess all requisite resources to successfully develop and deploy knowledge-intensive technological innovations. It is critical for such firms to understand, manage, and cultivate networks of partners to gain access to essential strategic resources and to shape the viability of resultant networks in a mutually beneficial way. Firms accomplish this through an intentional process of stakeholder enrolment under conditions of risk and uncertainty. This paper examines a multi-year case study about the development and deployment of a personal health management system (PHMS) within the US healthcare industry in order to illustrate how organisational goals shape stakeholder enrolment processes and how outcomes affect the way in which networks form, adapt, and evolve. This study integrates and draws upon business network adaptation and stakeholder enrolment processes to present a theoretical framework for conceptualising and understanding entrepreneurial networks for technological innovations.

No Pipe Dream: Achieving Care That Is Accountable for Cost, Quality, and Outcomes.

The April 2015 passage of the Medicare Access and Children's Health Insurance Program Reauthorization Act is accelerating the move of the US health care industry from traditional fee-for-service provider payments to alternative payment methods that are focused on value rather than volume of services. Medicaid, private employers, and consumer groups are also developing similar payment models. Learning from the experience of the 27 early accountable care organizations in North Carolina, such as Cornerstone Health Care, will help to accelerate the transformation that will be necessary across the health care delivery ecosystem in our state.

Transparency in healthcare: Where does it stand?

In a typical free market, consumer behaviour stays true to core economic principles related to supply and demand; however, in the US healthcare industry, certain economic principles apply, which influence consumers in a unique manner. Given the complexity of healthcare pricing and consumption, consumers are often ‘left in the dark’ when dealing with the true monetary cost of receiving treatment from a healthcare provider – whether it be for preventive reasons, an illness or injury or the delivery of a newborn child. To add another layer of complexity, there are also varying levels of price elasticity, depending on the condition, which also influence consumer behaviour. In fact, healthcare in the US is the only industry in which the ‘cost of care’ from the three main stakeholders – payers, providers and patients – is almost always different. The purpose of this paper is to explain how price and quality transparency affects consumer decision-making in the healthcare setting, to provide a background on various initiatives (state/federal/third party) that have taken place (or will take place) related to transparency, and ultimately provide recommendations to healthcare leaders on steps that can be taken to succeed in an increasingly transparent environment. By understanding healthcare consumerism and decision-making, healthcare providers can better prepare for value-based care, and understand and align healthcare charges to the true cost of care with the goal of more closely aligning with key stakeholders (patients and payers).

Re-examining high reliability: actively organising for safety

In the 15 years since To Err is Human was published,1 the US healthcare industry has worked diligently to improve patient safety. Although progress has been made in reducing hospital-acquired...

Presidential parties, monetary regimes, and health care returns

Purpose – The purpose of this paper is to investigate the absolute and risk-adjusted stock return performance of the US health care industry conditional upon the presidential administration’s political party and the Federal Reserve’s monetary policy stance. It evaluates this return behavior across the 60-year time period from 1954 to 2013, and sub-divides this entire period into the pre-Medicare period (1954-1964), Medicare period (1965-1984), and Medicare-plus-high-health-care-inflation period (1985-2013). Design/methodology/approach – The study uses monthly returns to the health care industry and overall market, characterizing each sample month as either having a Republican or Democratic president and either a contractionary or expansionary monetary policy regime determined by whether the Federal Reserve is increasing or decreasing interest rates, respectively. It incorporates univariate and multivariate analysis to quantify the return behavior of both the health care industry and the overall market during the entire period and all three sub-periods. Additionally, it utilizes a common four-factor multivariate regression model and associated hypothesis testing to characterize risk-adjusted excess returns (i.e. α) to the health care industry during the entire period and all three sub-periods. Findings – The health care industry has earned robust, positive risk-adjusted returns with the magnitude of the returns sensitive to the political party of the administration and the monetary policy regime. The authors find that prior to 1965 (1954-1964), when the president was a Republican, during times of monetary contraction, health care earned an excess risk-adjusted return. There was no association between Democratic administrations and excess health care returns prior to 1965. In contrast, the authors find that after 1965 this relationship changes. The authors find that returns to health care were positive for Republicans during times of monetary expansion and positive for Democrats during monetary contraction. The authors also find this relationship has become more pronounced after 1984. Originality/value – The study extends prior literature, which has shown that the health care industry is a priced factor in the US stock market and that it provides significant risk-adjusted returns in the recent past. Uniquely, this study shows that the excess returns to health care vary considerably over the past 60 years, and that these excess returns are quite sensitive to political policy, proxied by the presidential administration party, and monetary policy, as measured using Fed discount rate changes. These findings have implications for management and shareholders of highly regulated and subsidized industries and firms.

Health information technology adoption: effects on patient safety and quality of care

The adoption of healthcare information technology (HIT) has been advocated by various groups as critical for addressing the growing crisis in the US healthcare industry. This study aims to understand differences in patient outcomes between healthcare providers that do and that do not adopt HIT. This is accomplished by examining the relationships between the adoption of HIT in US acute care hospitals and two risk-adjusted patient outcomes: patient safety and quality. The new contribution of the study lies in the fact that it uses nationally representative data and it incorporates a large number of technologies.

PPPM health care - United States style: political, profitable, and profligate medicine

Health care in the United States costs at least 50% more per capita than in the European Union countries - upwards of 20% of the US Gross Domestic Product (GDP) - yet many measures indicate the health care outcomes in the US are inferior to countries spending much less. The reasons for this involve politics, profits, and wasteful practices that have evolved over decades. The politics of US health care are clear in the Affordable Care Act (ACA or Obamacare). Both its history (following previous attempts at health care reform, e.g., by President Clinton in 1993) and its structure (nearly 1000 pages as Public Law 111-148 of the 111th Congress) are evidence of the Balkanization of health care which has evolved in the US. Perhaps only the US Tax Code exceeds the ACA in complexity and fragmentation - a testament to the influence of special interests (aka lobbyists representing insurance companies, hospitals, drug and device manufacturers, and health care professionals such as doctors) in the development of health care policy in the US. None of these groups has the interest of the patient (i.e., the health of the US populace) as its primary goal. The profit motive has infiltrated all aspects of US health care. From reimbursement of doctors for the number of tests ordered and procedures performed (rather than for providing the most effective and efficient patient care), to financial incentives of the drug and device manufacturers to create new and expensive products (which are not necessarily better for the patient), to incentives of for-profit hospitals to provide inexpensive rather than effective care, to huge profit margins for health care insurers (whose management salaries, administration, and shareholders' profits may reach 30% of the premiums paid by the patient consumer) - all aspects of US health care are guided by profits rather than the patient's welfare. Wasteful practices in health care delivery abound in the US. Examples include the wasteful fragmentation evidenced by (1) the lack of a universal health care information system, (2) the multiple insurers (numbering in the hundreds in some regions), each with differing reimbursement policies and procedures, and (3) the proliferation of disposable devices (which usually provide a handsome profit margin for the manufacturers and marketers - often over 100%). The fact that a universal health care delivery system was off the table immediately in the initial health care reform discussions that led to ACA/Obamacare indicates that too many parties with substantial financial incentive to maintain the present inefficient but profitable (for the US health care industry) system were able to influence the politicians in Washington DC. Ironically, Medicare (universal health care for people 65 years of age and older, implemented 50 years ago) is the one aspect in US health care delivery that no one wishes to change - but this fact is lost in the priority of profit over patient in the present reform of US health care. Other countries would do well to avoid the costly mistakes (costly in terms of both poor outcomes and high expense) being made in US health care delivery.

The development and deploymentof electronic personal health records

The purpose of this study is to examine the impact of strategic position on the ability of an entrepreneurial firm to successfully develop and deploy electronic personal health records technology within the US healthcare industry. This study uses an in-depth longitudinal case study methodology. The study contributes by juxtaposing a longitudinal view of how the focal firm proposed and acted on different strategic positions in an attempt to achieve development and deployment success. In doing so, the study also elaborates on Porter's recognition that firms need to make trade-offs when choosing a strategic position, as the purposeful limitation of service offerings can protect against the degradation of existing value creating activities. The authors' study highlights the enormous challenge of facilitating the adoption and diffusion of technology enabled interventions in the US healthcare ecosystem. Future research that combines both interdisciplinary and multi-level investigation and analysis is sorely needed to develop a more sophisticated understanding of the phenomenon and to encourage the development and deployment of useful technology enabled interventions within the US healthcare industry. While the fragmented nature of the healthcare industry provides opportunities for entrepreneurial firms, such complexity within the ecosystem should not be underestimated as a reason for concern for small firms. Total economic burden due to chronic diseases and other healthcare-related expenses is massive for the USA. Consequently, prevention and early detection of future disease states has become a core component of the current healthcare reform debate. EPHRs are considered one core component of a broader healthcare strategy to improve health outcomes and lower costs. By deepening our understanding of how best to develop and deploy such interventions, society will surely benefit. The longitudinal nature of the authors' study provides a unique opportunity to understand the dynamic interrelationships between context, position, and performance within the US healthcare industry.

Healthcare industry equity risk premium and book-to-market anomaly in the US stock market

Using daily data from CRSP and COMPUSTAT, this paper first confirms the cointegrated relation between the returns of equities in the US healthcare industry and the returns of market portfolio. Then we break down the risk premia of stocks of the healthcare sector into ten subgroups and reveal an anomaly compared to the Fama-French three-factor model. We find significantly negative coefficients of the risk loadings of the book-to-market ratio. Such anomaly is robust in the White heteroskedasticity-consistent control group and differently weighted market portfolio. As a unique countercyclical sector, growth stocks with lower book value in the healthcare industry are pertinent to stable portfolio performance. We also find non-zero Fama-French alpha in several subgroups, which implies the existence of unknown factors to explain the returns of healthcare assets.

The spectrum of medical errors: when patients sue.

Inarguably medical errors constitute a serious, dangerous, and expensive problem for the twenty-first-century US health care system. This review examines the incidence, nature, and complexity of alleged medical negligence and medical malpractice. The authors hope this will constitute a road map to medical providers so that they can better understand the present climate and hopefully avoid the “Scylla and Charybdis” of medical errors and medical malpractice. Despite some documented success in reducing medical errors, adverse events and medical errors continue to represent an indelible stain upon the practice, reputation, and success of the US health care industry. In that regard, what may be required to successfully attack the unacceptably high severity and volume of medical errors is a locally directed and organized initiative sponsored by individual health care organizations that is coordinated, supported, and guided by state and federal governmental and nongovernmental agencies.

Compulsion: The Key to Us Health Care Reform

To meet the twin goals of cost containment and universal coverage, health care legislators in the US will eventually have to come to grips with the concept of 'compulsion'. This is the main tenet of this paper, which also addresses what compulsion might mean as applied in the context of recent US health care legislation and its implications for the US health care industry. Missing the opportunity to embrace compulsion more fully may lead to cost containment not being achieved, thus threatening the sustainability of the reforms contained in the recently Patient Protection and Affordable Care Act.

Does CEO optimism affect strategic process?

PurposeAlthough management researchers have long recognized that cognitive and behavioral constructs can influence strategic process, there have been surprisingly few empirical studies exploring their actual influence. More specifically, there have been no reported findings examining how an executive's general tendency to expect positive outcomes (i.e. optimism) shapes their strategic process. The purpose of this paper is to examine if optimism serves as a cognitive bias that short‐circuits the strategic process, or more specifically results in a greater use of incrementalism versus a comprehensive rational process.Design/methodology/approachThis is an initial study to explore the relationships between optimism and strategic process. The authors opted for a large cross‐sectional sample of chief executive officers (CEOs) in the for‐profit sector of the US healthcare industry, distributed 810 surveys, and received a 21 percent response rate. The authors' methods incorporated the well‐established Life Orientation Test for optimism, and interaction effect regression models, correlations, and ANOVAs were used to test relationships.FindingsIt was found that at the time of the study, executives were more optimistic than average. It was further found that higher optimism is associated with less rational (and more incremental) strategic decision‐making processes. Organizational size also had an interaction effect on the optimism‐strategic process relationship.Research limitations/implicationsThe authors operationalized only a few variables in this initial study. A more comprehensive study, utilizing many more variables and exploring optimism for the top management team (beyond just the CEO) is being incorporated into subsequent studies.Practical implicationsIf disposition (e.g. optimism) is associated with strategic processes, then a better understanding of executive's dispositions could be used to better align CEOs with organizational types and stage of life cycle.Originality/valueThis is the first study of its kind to begin to explore the association between dispositional optimism and strategic processes.

Healthcare Reforms in the US: A Multi-Billion Opportunity for Indian Firms

The US health care industry is a complex entity with significant contrasts. Despite its leadership position in health care spending and medical research, over 45 million of the US population continue to be uninsured and cannot afford even basic medical care. To understand this paradox, one needs to take a look at the history of health care in the US. As early as in the 1920's, US hospitals evolved into modern scientific institutions and along with this development came the beginning of health insurance, as a prepaid hospital plan, for covering sickness. This model was quickly embraced by the large workforce based organizations such as the auto and the railroad companies and employer sponsored health insurance plans became the de facto health benefit operating model in the US. During the 1960's, as medical research began to cover a range of illnesses, cost of medical care increased, thereby making health insurance also unaffordable to the public. To address this, the US government created the Medicare and Medicaid social programs in 1965. Medicare extended health coverage to almost all Americans aged 65 or older and Medicaid provided access to health care services for low income and poor persons and people with disabilities.

Healthcare Reforms in the US: A Multi-Billion Opportunity for Indian Firms

The US health care industry is a complex entity with significant contrasts. Despite its leadership position in health care spending and medical research, over 45 million of the US population continue to be uninsured and cannot afford even basic medical care. To understand this paradox, one needs to take a look at the history of health care in the US. As early as in the 1920's, US hospitals evolved into modern scientific institutions and along with this development came the beginning of health insurance, as a prepaid hospital plan, for covering sickness. This model was quickly embraced by the large workforce based organizations such as the auto and the railroad companies and employer sponsored health insurance plans became the de facto health benefit operating model in the US. During the 1960's, as medical research began to cover a range of illnesses, cost of medical care increased, thereby making health insurance also unaffordable to the public. To address this, the US government created the Medicare and Medicaid social programs in 1965. Medicare extended health coverage to almost all Americans aged 65 or older and Medicaid provided access to health care services for low income and poor persons and people with disabilities.

Ergonomics concerns and the impact of healthcare information technology

The US healthcare industry is poised on the verge of a massive expansion of its information technology infrastructure. Healthcare information technology (IT) is permeating numerous areas of healthcare delivery and fundamentally changing the nature of many healthcare jobs. When a comparable expansion in HIT use occurred in the office environment in the 1980s, little attention was paid to ergonomic design principles for computer work and the consequence was an increase in work-related musculoskeletal disorders throughout the 1990s. There are already signs of similar problems among certain groups of healthcare professionals. Consequently, it is vital that when the implementation of HIT is undertaken attention is paid to computer ergonomics programs. This review presents evidence that current patterns of HIT use may pose increased risks of work-related musculoskeletal disorders. It summarizes some of the main ergonomic design principles enshrined in standards that mitigate such problems. It points to the future expansion of ergonomics programs beyond the traditional workplace and into the realms of telecommuting. Results from this review can be used to optimize the implementation of future HIT initiatives in ways that will benefit user performance while minimizing their injury risks. Relevance to industry This review describes the rapid proliferation of HIT applications and the importance of ergonomic considerations in mitigating injury risks and optimizing the implementation of HIT systems.

Environmental Health—Do No Harm

With the familiar refrain of "reduce, reuse, recycle" echoing to every corner of the globe, there remains a critical question for nursing: "What can nurse leaders do to reduce the 6600 tons of medical waste the US healthcare industry generates each day?" This article details how nursing executives can help influence their hospital employers to make green-friendly choices and mobilize their staff to launch community-wide environmental protection efforts.

Has the Picture Archiving and Communication System (PACS) Become a Commodity?

The Picture Archiving and Communication System (PACS) market has been transformed by disruptive innovations from the information technology industry. The cost of storage alone has dropped by a factor of 100 within the past 10 years. Improvements in display, processing, and networking have likewise enabled PACS to be a capable replacement for film. The maturity of PACS has permeated the US healthcare industry from large academic hospitals to small outpatient imaging centers. Can PACS continue to be a platform for innovation or has it become a commodity?

Implementing Electronic Medical Record Systems

The US healthcare industry is a massive information enterprise, yet it's surprisingly inefficient when it comes to information management. Some estimates put it decades behind other industries with respect to information technology (IT) adoption and utilization. In fact, an article in the Journal of Healthcare Management described the industry as a knowledge-based enterprise that doesn't consider knowledge part of its value proposition. A 2003 report found the healthcare industry spending 2 percent of gross revenues on IT compared to 10 percent for other information-intensive industries, such as banking. The consequences of this health IT gap are matters of life and death. In 1999, the US National Academies' Institute of Medicine published a report, To Err Is Human: Building a Safer Health System, which attributed between 44,000 and 98,000 deaths per year to medical errors. Subsequent studies have confirmed a general assessment of healthcare delivery system as inefficient, unreliable, and even dangerous.

A multi-level examination of quality-focused human resource practices and firm performance: evidence from the US healthcare industry

In today's business world, the role of quality has become ever more significant for organizations to compete in a global marketplace. Based on the quality management theory, this study empirically examines the relationship between quality-focused human resource practices (QHRP) and organizational performance outcomes. Data from 69 healthcare organizations indicate a strong support for this relationship. A Human Resource (HR) system focused on quality management was directly related to multiple dimensions of organizational performance outcomes (i.e., intangible – employee satisfaction and customer satisfaction – and tangible – profit). Specifically, two measures of QHRP, knowledge management and strategic management, were found to be positively related to the financial performance of firms implementing quality management. Process management is found to be negatively related to employee satisfaction. General Human Resources were positively related to both employee and customer satisfaction. Employee focus of the firms is also positively related to employee satisfaction. In addition, employee satisfaction is also related to both customer satisfaction and financial performance while customer satisfaction is found to be positively related to employee satisfaction. The findings indicate a generally strong positive relationship with the organizational performance outcomes. The results of this study are particularly important in showing HR's contribution to the organization's bottom line.

Challenge of Hospital Emergency Preparedness: Analysis and Recommendations

In the United States, recent large-scale emergencies and disasters display some element of organized medical emergency response, and hospitals have played prominent roles in many of these incidents. These and other well-publicized incidents have captured the attention of government authorities, regulators, and the public. Health care has assumed a more prominent role as an integral component of any community emergency response. This has resulted in increased funding for hospital preparedness, along with a plethora of new preparedness guidance.Methods to objectively measure the results of these initiatives are only now being developed. It is clear that hospital readiness remains uneven across the United States. Without significant disaster experience, many hospitals remain unprepared for natural disasters. They may be even less ready to accept and care for patient surge from chemical or biological attacks, conventional or nuclear explosive detonations, unusual natural disasters, or novel infectious disease outbreaks.This article explores potential reasons for inconsistent emergency preparedness across the hospital industry. It identifies and discusses potential motivational factors that encourage effective emergency management and the obstacles that may impede it. Strategies are proposed to promote consistent, reproducible, and objectively measured preparedness across the US health care industry. The article also identifies issues requiring research.