Modern Management Practices and Hospital Admissions

Abstract

We investigate whether the modern management practices and publicly reported performance measures are associated with choice of hospital for patients with acute myocardial infarction (AMI). We define and measure management practices at approximately half of US cardiac care units using a novel survey approach. A patient's choice of a hospital is modeled as a function of the hospital's performance on publicly reported quality measures and the quality of its management. The estimates, based on a grouped conditional logit specification, reveal that higher management scores and better performance on publicly reported quality measures are positively associated with hospital choice. Management practices appear to have a direct correlation with admissions for AMI--potentially through reputational effects--and indirect association, through better performance on publicly reported measures. Overall, a one standard deviation change in management practice scores is associated with an 8% increase in AMI admissions.

Keywords: hospital markets; hospital quality; management; public reporting.