How do health care organizations’ characteristics affect the effectiveness of service delivery reforms?

Abstract

Poor performances in efficiency and quality in health system has been a persistent problem. Provider payment reforms have been adopted globally to incentivize better efficiency and quality of care, but the results are often mixed. Since the reforms require organizations to interpret the policies and respond accordingly, identifying how organizational characteristics affect such reforms’ effectiveness can be helpful. This dissertation presents three papers that draw on organizational behaviour theories to identify key organizational characteristics that may help explain why provider payment reforms do not achieve their intended outcomes. Chapter 2 investigates how hospitals’ management characteristics affect the effectiveness of reforms. Theoretically, hospitals’ ability to set appropriate challenging or specific goals, providing feedback, and standardizing operational processes should improve their responsiveness the reforms. The study leverages the reform of the publicly administered New Cooperative Medical Scheme (NCMS) from fee-for-service to global budget payment in a resource-limited Chinese province. The reform incentivizes lower NCMS expenditure per admission though this may inadvertently incentivize expenditure switching to out-of-pocket (OOP) sources. I use the difference-in-difference methodology to examine how the management characteristics moderate the provider payment reform effectiveness. The results show that the impact of the provider payment reform is larger for hospitals with better goal setting capacity and feedback provision, while hospitals with better process standardization was associated with shifting to out-of-pocket sources of revenue. Supporting hospitals to set goals appropriately and provide feedback may thus be useful, and policymakers may wish to monitor and penalize expenditure shifting. Chapter 3 investigates how organizational autonomy affects the reform effectiveness. The study uses the same dataset and methodology as chapter 2, and it focuses on autonomy over surplus, human resources, and procurement processes (i.e., equipment, drugs, and consumables). The study finds that organizations with autonomy over surplus and equipment are associated with higher growth of NCMS expenditure per admission, which is counter to the reform incentives. Investigation into the mechanism revealed that hospitals with autonomy over surplus may be more profit-oriented, as demonstrated by pre-intervention association with higher OOP expenditure per admission. The findings suggest that policymakers ought to carefully evaluate the extent of perverse incentives before granting autonomy and adjust incentives where necessary. Chapter 4 investigates how personnel diversity (position and tenure variety) and affective bonds (mutual support and group pride) affect reform effectiveness. The study draws on a results-based financing reform in Tajikistan that incentivizes higher volume and quality of care. Using the difference-in-difference estimator, the study examines how the explanatory variables moderate the reform effectiveness in terms of the level and variability of clinical knowledge (diagnostic accuracy of clinical vignettes for malnutrition and anemia, and hypertension) and care processes (completion of pediatric and adult checklist items). Group pride was associated with care quality improvement (greater checklist item completion and lower variability of items completed). Tenure and position variety respectively demonstrated positive and negative association with care quality improvements. Health care organization leaders may wish to improve group pride and future research can examine why the constructs’ subcomponents yielded conflicting associations. In conclusion, this dissertation identifies the opportunity to leverage organizational behaviour theories to examine health system reform effectiveness. Health system policymakers and organization leaders may also wish to adjust relevant policies and practices. In terms of management capacity, setting up peer learning networks among hospitals to support diffusion of good goal setting and feedback approaches may be beneficial. For autonomy to be effective, policymakers may wish to carefully assess the extent of perverse incentives and adjust current incentives carefully. Organizational leaders may also wish to strengthen group pride via clear communication about the organizational values and decision-making considerations, establishing fair and transparent reward structure, and training employees to be leaders. Future researchers can unpack the organizational characteristics that affect health care organizations’ responsiveness to develop more nuanced intervention targets.