Neeraj Puro1, Nancy Borkowski2, Scott Feyereisen3, Larry Hearld4, Nathaniel Carroll4, James Byrd5, Dean Smith6, Akbar Ghiasi7. 1. College of Business, Florida Atlantic University, Boca Raton, Florida. 2. School of Health Professions, University of Alabama at Birmingham, Birmingham, Alabama. 3. College of Business, Florida Atlantic University. 4. School of Health Professions, University of Alabama at Birmingham. 5. Collat School of Business, University of Alabama at Birmingham. 6. School of Public Health, Louisiana State University Health Sciences Center, New Orleans, Louisiana; and. 7. H-E-B School of Business and Administration, University of the Incarnate Word, San Antonio, Texas.
Abstract
EXECUTIVE SUMMARY: Financial distress is a persistent problem in U.S. hospitals, leading them to close at an alarming rate over the past two decades. Given the potential adverse effects of hospital closures on healthcare access and public health, interest is growing in understanding more about the financial health of U.S. hospitals. In this study, we set out to explore the extent to which relevant organizational and environmental factors potentially buffer financially distressed hospitals from closure, and even at the brink of closure, enable some to merge with other hospitals. We tested our hypotheses by first examining how factors such as slack resources, environmental munificence, and environmental complexity affect the likelihood of survival versus closing or merging with other organizations. We then tested how the same factors affect the likelihood of merging relative to closing for financially distressed hospitals that undergo one of these two events. We found that different types of slack resources and environmental forces impact different outcomes. In this article, we discuss the implications of our findings for hospital stakeholders.
EXECUTIVE SUMMARY:Financial distress is a persistent problem in U.S. hospitals, leading them to close at an alarming rate over the past two decades. Given the potential adverse effects of hospital closures on healthcare access and public health, interest is growing in understanding more about the financial health of U.S. hospitals. In this study, we set out to explore the extent to which relevant organizational and environmental factors potentially buffer financially distressed hospitals from closure, and even at the brink of closure, enable some to merge with other hospitals. We tested our hypotheses by first examining how factors such as slack resources, environmental munificence, and environmental complexity affect the likelihood of survival versus closing or merging with other organizations. We then tested how the same factors affect the likelihood of merging relative to closing for financially distressed hospitals that undergo one of these two events. We found that different types of slack resources and environmental forces impact different outcomes. In this article, we discuss the implications of our findings for hospital stakeholders.
Authors: Berkeley Franz; Cory E Cronin; Vanessa Rodriguez; Kelly Choyke; Janet E Simon; Maxwell T Hall Journal: BMC Health Serv Res Date: 2021-12-11 Impact factor: 2.655