The Moderating Effect of Organization Culture on Competition Intensity and Hospital Quality

The Moderating Effect of Organization Culture on Competition Intensity and Hospital Quality

Tor Guimaraes (Tennessee Tech University, USA), Maria do Carmo Caccia-Bava (University of Sao Paulo, Brazil) and Melissa Geist (Tennessee Tech University, USA)
DOI: 10.4018/IJHISI.2020070103


This study empirically tests the relationship between hospital competition intensity and its quality, and the moderating impact of hospital culture on this relationship. An emailed questionnaire collected data from 239 American hospital CEO's to validate the measures and test the hypothesized relationships. The results corroborated the importance of competition intensity as determinant of hospital quality and the positive moderating impact of hospital organization culture as measured here. Future research should expand this model to include other potential determinants of hospital quality such as economic conditions and hospital size. Also, future research should explore other potential moderators and mediators for inclusion in a more elaborate model. While hospitals administrators cannot control the intensity of their competition, and are forced to do everything they can to improve hospital quality (including establishing a helpful organization culture), understanding how to measure these constructs and manage their relationships should be very useful.
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Compared to patients’ desire for hospital care quality, at the provider organization level, the enthusiasm for hospital quality seems somewhat reduced. There are numerous studies addressing the determinants of hospital quality (Missios & Bekelis, 2018; Montgomery et al., 2013; Stimpfel et al., 2016). Some studies focusing on hospital Board level managers indicate a low prioritization of hospital quality issues on the Board’s agenda and not all hospitals have quality on their agenda (Jha & Epstein 2010; Joshi & Hines, 2006). Some studies reported that quality issues were not consistently and sometimes never addressed (Mastal et al., 2007; Prybil et al., 2010). Many studies addressing Board time spent on quality and patient safety, reported that less than half of the total time was spent on such issues (Baker et al., 2010; Jha & Epstein, 2010; Jiang et al., 2008; Jiang et al., 2009; Levey et al., 2007; Prybil et al., 2010) and a majority of Boards reported spending 25% of their time or less on hospital quality issues (Baker et al., 2010; Jha & Epstein, 2010; Jiang et al., 2009; Poniatowski et al., 2005; Prybil et al., 2010; Vaughn et al., 2006).

Similar to health care quality, the importance of competition in any business sector is also widely recognized. Competition can be defined as the process of controlled rivalry between firms striving to make sales and profits. Without competition, an organization has little incentive to lower prices or improve its products and services. Among hospitals, competition has been found to have a healthy effect in hospital performance. Seiler et al. (2015) analyzed the causal impact of competition on managerial quality and hospital performance including quality. They found that higher competition results in higher management quality and improved hospital performance.

Last, organization culture has been considered important for company prosperity by many authors since the early 1980s (Peters & Waterman, 1982; Davis, 1984). According to Büschgens et al. (2013), the literature was based on two major propositions: first, cultures reflect the values and actions of the senior leaders; second, cultures are important determinants of firm performance.

Based on the importance of these three areas, the primary objectives of this study are to empirically test the relationship between hospital competition intensity as a determinant of hospital quality, and the moderating impact that hospital culture is likely to have on this relationship. The next section discusses the proposed model in greater detail, its main constructs, and the justification for the two proposed hypotheses.

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