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Understanding the Impact the Hospital Readmission Rate Program and Value Based Purchasing Has Had on the Financial Viability of Academic Health Centers, 2011 to 2015

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Understanding the Impact the Hospital Readmission Rate Program and Value Based Purchasing Has Had on the Financial Viability of Academic Health Centers, 2011 to 2015 Virginia Commonwealth University VCU Scholars Compass Theses and Dissertations Graduate School 2019 UNDERSTANDING THE IMPACT THE HOSPITAL READMISSION RATE PROGRAM AND VALUE BASED PURCHASING HAS HAD ON THE FINANCIAL VIABILITY OF ACADEMIC HEALTH CENTERS, 2011 TO 2015. David Allen Virginia Commonwealth University Follow this and additional works at: https://scholarscompass.vcu.edu/etd Part of the Health and Medical Administration Commons © David Allen Downloaded from https://scholarscompass.vcu.edu/etd/6034 This Thesis is brought to you for free and open access by the Graduate School at VCU Scholars Compass. It has been accepted for inclusion in Theses and Dissertations by an authorized administrator of VCU Scholars Compass. For more information, please contact [email protected]. © David Allen 2019 All Rights Reserved Understanding the Impact the Hospital Readmission Rate Program and Value Based Purchasing has had on the Financial Viability of Academic Health Centers, 2011 to 2015. A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy at Virginia Commonwealth University. by David Whitfield Allen MS, Virginia Polytechnic Institute and State University, May 2008 BA, Virginia Polytechnic Institute and State University, May 2007 Director: Gloria J. Bazzoli, Ph.D. Bon Secours Professor Department of Health Administration Virginia Commonwealth University Richmond, Virginia August, 2019 ii Acknowledgement First, I would like to thank my parents for always supporting me, and telling me that an education is one of the most important things in life. As my dad always said, “It can never be taken away from you.” I appreciate their lifelong belief in me, and encouragement to do my best. This would not have been possible without them. I only regret that my dad cannot be here to see this accomplishment. He would be proud. I also wish to thank my mentors who believed in me and encouraged me to work toward a Ph.D., especially from Dr. Quincy Byrdsong who’s never-ending encouragement (and maybe a little pushing) gave me the final momentum to pursue this degree. I would also like to thank Dr. Paula Kusptas and the Health Professions staff for their hard work and seamless administration of the program. Thank you to all of the great faculty in this program who’s encouragement and expertise made this a great experience. My cohort also deserves a special call out. I do not think any of us knew how hard this would be, and without our great camaraderie, and maybe a little complaining, I am not sure we would have made it. Thank you to Dr. Michael McCue was great, with the fastest turnaround of anyone I have ever met, and thoughtful questions. Dr. Patrick Shay always provided great (and some of the most polite) comments and helpful references. Dr. Leroy Thacker provided great help and insights, threw in some statistics teaching, and even came by my house one rainy Saturday to help me run my data! Most of all, my advisor, Dr. Gloria Bazzoli, deserves the most credit. I am not sure a better advisor exists. She always provided great comments and fast feedback, and did her best to slow me down and to work through the process. I thought a few times I might have driven her crazy, but she always kept helping! To my family, friends, and work colleagues. A huge thanks to you who might have suffered through this process more than anyone else. I am sure they will be the most excited for me finishing this so they no longer need to hear about it. Thanks to Leslie Brown and Jean Giddens for being supportive managers, and giving me time to tackle this crazy process of being a full time student while working. Your support made this possible. Finally to my wife, son, and dog, Beamer. Beamer, thanks for keeping me company on all those late nights working on homework, discussion boards, and this dissertation. Your constant companionship will never be forgotten, and I am sorry you could not see this to the end with me. To my son, Carter Allen, thank you for the energy and laughter you provide. It helped keep me grounded in what really matters in life. I hope that this accomplishment will stand to inspire you that anything is possible with determination and hard work. To my wife, Erin Allen, thank you for all of your support in everything I do, and constant encouragement. I know you thought I was crazy when I told you I was going to purse a Ph.D., but you never discouraged me. You never even complained when I would work on homework or my dissertation late at night and on the weekends or when I asked you to read and edit all those papers! Without your rock steady presence and support, I would never have made it! Don’t worry, now I will have all my time to devote to you and Carter! On second thought, you might want me to start another program… iii Table of Contents List of Tables ...................................................................................................................vi List of Figures ................................................................................................................. vii Abstract ......................................................................................................................... viii Chapter 1: Introduction .................................................................................................... 1 The Study Problem ...................................................................................................... 1 Background .................................................................................................................. 2 Research Questions .................................................................................................... 7 Significance and Limitations of the Study .................................................................. 10 Organization of Subsequent Chapters ....................................................................... 11 Chapter 2: Literature Review ......................................................................................... 13 Academic Health Centers .......................................................................................... 13 Overview ................................................................................................................. 13 Tri-Part Mission ....................................................................................................... 14 Hospital Readmission Reduction Program ................................................................ 17 Value Based Purchasing ............................................................................................ 24 Prior Research on Hospital Profitability ...................................................................... 30 Literature Synthesis and Gap Addressed by this Study ............................................. 32 Chapter 3: Theoretical Framework ................................................................................ 34 A Background of Contingency Theory ....................................................................... 34 Contingency Theory and Performance ...................................................................... 36 The Health Care Industry and Fit ............................................................................... 38 Hospital Contingencies and a Conceptual Model for Fit and Performance Among AHCs and Non-AHCs ................................................................................................ 45 Hypotheses ................................................................................................................ 47 Control Variables ....................................................................................................... 49 Summary of Theoretical Framework .......................................................................... 52 Chapter 4: Methods ....................................................................................................... 54 Research Design ....................................................................................................... 54 Threats to Internal and External Validity .................................................................... 55 Data Sources ............................................................................................................. 60 Study Population and Sampling Strategy ................................................................... 62 Measurement of Variables ......................................................................................... 64 Hospital Profitability and Dependent Variables ....................................................... 65 iv Independent Variables ............................................................................................ 67 Control Variables .................................................................................................... 68 Variable Management ............................................................................................. 71 Analytic Methods ........................................................................................................ 71 Limitations of the Study Methods ............................................................................... 73 Summary of the Methods Chapter ............................................................................. 75 Chapter 5: Results......................................................................................................... 76 Data Preparation
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