Strategic change in hospitals: an examination of the response of the acute care hospital to the turbulent environment of the 1980s.

Changes in strategies of hospitals responding to the turbulent health care environment of the 1980s are examined both in the aggregate and from the perspective of the individual hospital. The Miles and Snow typology is used to determine strategy type. Both investor-owned and not-for-profit hospitals were well represented in the broad mix of hospital types sampled. In addition, freestanding hospitals and members of multihospital systems were present in the sample. Last, hospitals of all sizes were included. Strategic change was evaluated by classifying hospitals by strategy type in each of two consecutive five-year time periods (1976 through 1980 and 1981 through 1985). Changes in reimbursement policies, the emergence of new technologies, changing consumer expectations, and new sources of competition made the environment for hospitals progressively more turbulent in the latter period and provided an opportune setting to evaluate strategic change. Results showed that a significant number of hospitals did change strategy as the environment changed, and in the direction anticipated. Logistic regression was used to determine whether prior strategy, type of ownership, system membership, or size would predict which hospitals would change strategy as the environment changed: only prior strategy was found to be a predictor of strategy change.