Is it resources, habit or both: interpreting twenty years of hospital strategic response to prospective payment.
The 1983 Tax Equity and Fiscal Responsibility Act (TEFRA) transformed acute care from a benevolent to malevolent environment. A dual-paradigm of resource dependency and institutional theories that balances isomorphic with economic variables has emerged to better explain hospital strategic response to the resultant constraint on resources than a traditional single paradigm approach. Using the population of non-rural, non-federal acute-care hospitals, strategic response from 1982 to 2001 is studied; distinct cost and service changes occur. Cost strategy is linked primarily to Medicare utilization, a resource dependence response. Service strategy favors high technology regardless of prospective payment diffusion, an institutional theory perspective. Strategic implications are discussed.
Balotsky
Edward R
ER
Saint Joseph's University, Haub School of Business, Department of Management, Philadelphia, PA, USA. ebalotsk@sju.edu
D000208:Acute Disease; D004469:Economics, Hospital / Q000458:organization & administration*; D005163:Factor Analysis, Statistical; D006295:Health Resources / Q000458:organization & administration*; D006801:Humans; D006278:Medicare; D011445:Prospective Payment System; D012044:Regression Analysis; D014481:United States