Privatization of Public Hospitals and its Impact on Community Orientation

Document Type

Article

Publication Date

11-30-2017

Publication Title

Academy of Management

Volume

2014

Issue

1

Abstract

Public hospitals have long been major players in U.S. health care delivery, but they typically operate in a more challenging environment than private hospitals and yet they are expected to engage in community orientation activities. During the past few decades, some public hospitals have chosen privatization as the strategy for survival. The purpose of this study was to investigate the impact of privatization on the degree of community orientation. This study used a national sample of non-federal acute care public hospitals in 1997. These hospitals were tracked through 2009, resulting in 6,554 hospital-year observations. The independent variable “privatization” was defined as conversion from public status to either private not-for-profit or private for-profit status. The dependent variable “community orientation” was measured as the composite score of nine dichotomous items (range 0-9) from the AHA annual survey. Negative binomial fixed-effects regression models were used to estimate the relationships. Our results indicated that compared to hospitals that remained public, privatized hospitals were more likely to have a higher degree of community orientation (IRR = 1.23, p < .001). A breakdown by ownership type showed that hospitals that privatized to for-profit status (IRR = 1.51; p < .001) and those that privatized to not- for-profit status (IRR = 1.17, p <.001) were more likely to have a higher degree of community orientation compared to hospitals that remained public. Furthermore, the difference in community orientation between hospitals that privatized to for-profit and those that privatized to not-for-profit status was statistically significant (p < .001).

Keywords

Community orientation; Privatization; Public hospitals

Disciplines

Business | Business Administration, Management, and Operations | Community-Based Research | Social and Behavioral Sciences | Sociology

Language

English

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