The effect of competitive environments on university hospital-medical faculty/staff relationships

The change in reimbursement and turbulence in the external environment are elements of uncertainty to all hospitals, including university hospitals. The organizational character of the university hospital presents it with substantial challenges as it strives to continue to meet its traditional role in society. Changes in policy may indeed be enacted with specific outcomes in mind--but they may result in totally unexpected longer-term effects on the institutions affected. This article--an attempt to develop a model and a set of propositions through which such changes can be analyzed as they affect the university hospital and its relationship to its medical faculty/staff--focuses primarily on the effects of such changes on the delivery of clinical services. While individuals viewing the same problem from different perspectives could reach other conclusions regarding academic activities and community services, the approach may be useful as an analytic tool for these areas of concern as well. For the sake of simplicity and because patient care is important both clinically and financially to the university hospital, it was chosen as the critical variable on which to focus the analysis. The analysis was predicated on the interaction of two perspectives from the general area of exchange theory. While each can contribute to an understanding of the dynamics of organizational change, their complementary nature allows one to analyze organizational environments from a more inclusive perspective. It is suggested that changes in policy that result in changes in organizational performance should utilize frameworks that integrate perspectives--focusing on commonalities, identifying differences and, in essence, triangulating on the management of critical relationships--to ensure successful implementation of the policy change. In this way, the analytic framework developed in this article should be useful as a close reflection of organizational reality. Prospective payment, price competition, alternative sources of care, and the oversupply of physicians threaten to change the balance of influence among the university hospital's influential actors. Depending on the decisions made, any of the four goals of the university hospital (patient care, education, research, and community service) may have to be modified or eliminated. The university hospital's historical role as the last resort for the severely ill, developer of new basic and clinical knowledge, and provider of indigent care may be in jeopardy. While the long-term effects of PPS and competition for patients cannot be predicted, speculation can be offered regarding the possibility of changes in the traditional physician-patient and faculty/staff-university hospital relationships as both institutional and external regulators and purchasers of care exert increased control over UH physicians. Such changes may lead to an under-supply of physician educators and physician scientists as a result of a change in policy