Running as fast as they can: organizational changes in home health care

During the 1980s, as the health care industry experienced what observers have dubbed a revolution, the home health industry also experienced its own transformation. Utilizing three organizational theories (neoinstitutional, resource dependency and population ecology), the authors report on a study of a probability sample of 163 home health agencies (HHAs) that were interviewed in 1986 and again in 1987 on the effects of Medicare policy changes including prospective payment (DRGs). This study tests hypotheses concerning the influence of environmental factors (e.g., state policy and characteristics of the local market) and organizational characteristics of the HHA (e.g., tax status and Medicare reliance) in explaining the propensity of HHAs to be (or become) parts of chains and/or multi-facility systems; and to develop particular types of interorganizational relations. The paper discusses the results in the context of public policy changes and the implications for future research and practice.