1. Data and Method
1) Data and Measures
This study employs quality of care and patient satisfaction as
organizational performance. To measure each hospital’s overall quality
of care, we adopt the Overall Quality Star Rating provided by the Center
for Medicare & Medicaid Services (CMS) each year. The score is
calculated as a weighted average for five sub-measure groups: mortality,
safety, readmission, patient experience, and timely and effective care.
The rating spans from 1 star to 5 stars. The level of patient
satisfaction with a hospital is measured by an overall star rating from
the Hospital Consumer Assessment of Healthcare Providers and Systems
(HCAHPS) survey, which is also provided by the CMS every year. This
survey offers scores of 29 items to assess the patient experience of
each hospital. We measure patient satisfaction with an overall rating of
1 to 5 stars.
Patient engagement is measured as an indicator variable, taking a value
of one if a hospital has an established patient and family advisory
council (PFAC) and taking a value of zero otherwise. The data comes from
the American Hospital Association (AHA) Annual Hospital Survey.
Hospitals’ physical and financial resources are measured as the logged
values of the total fixed assets and the logged values of the net
patient revenues, respectively (Barney, 1991; Short et al., 2002). Data
used for both measures are from the RAND Hospital Data. Human resources
are measured as the number of full-time equivalent (FTE) physicians,
dentists, and FTE registered nurses (Su et al., 2009; Lee et al., 2023).
Both variables are normalized using the total number of beds in each
hospital, and the data are from the AHA survey. To measure the social
and institutional resources, we adopted a percentage of the non-white
population in each county. By adopting this measure, we can capture the
level of social input from the minority population to the hospitals.
Our analyses also use multiple hospital- and county-level variables to
control heterogeneity. Table 1 shows the measures of each variable and
the data sources. Hospital size is measured as the number of beds in
each hospital. Whether a hospital is a major or minor teaching
affiliation organization, the shares of patients covered by Medicaid or
Medicare programs and the Case Mix Index (CMI) are controlled. Regarding
county-level differences, we measure the community demand for financial
assistance with healthcare services as the logged value of the
unreimbursed and uncompensated care costs. We also include the total
population, percentage of individuals older than 65, income level, and
uninsured rate in each county. The population and income data are from
the U.S. Census and the U.S. Bureau of Economic Analysis, respectively.
Table 1. Variables and Measure