Study identifies indicators of hospital failures
More than 500 hospitals have failed since 1983, the first year health care institutions were forced into the prospective payment system, which required hospitals to take care of their patients’ problems on a fixed-fee basis.
Three Auburn (AL) University researchers ow say you can predict which hospitals are likely to close in the future by examining some basic variables. John S. Jahera, PhD, a professor in Auburn’s department of finance, says the researchers’ goal was to develop an early warning system for hospitals in decline.
"Can we find some way to identify the institutions in difficulty and take corrective action?" he says.
How many and for how long?
The answer, they found, is yes. Using discrim-inate models widely used in the corporate world, Jahera and colleagues Sharon Oswald and Lorraine R. Gardiner both professors of management at Auburn came up with a set of variables important in determining a hospital’s health. These variables differ somewhat between nonprofit and for-profit hospitals, but they all seem to boil down to a few things:
• How many patients can a hospital treat?
• How many do they treat?
• How long does it take to treat each patient?
• How many employees get involved in each patient’s care?
The researchers suggest that healthy hospitals, in general, operate like grocery stores: The merchandise comes in and doesn’t sit on the shelf for too long; that is, patients get treated and go home fast.
Hospital size is not necessarily a factor in predicting an institution’s future health, but Jahera says it does impinge on other variables. Small hospitals don’t offer as many services as large hospitals, and thus the census can be affected.
And hospitals whose services are heavily weighted toward the emergency department are more likely to be treating large numbers of patients who have limited insurance, Jahera says, negatively affecting the bottom line.
Unhealthy hospitals face some unsavory options if they hope to survive cutting the staff, for example. Jahera says that’s one reason hospitals are turning to automation.
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