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Related Experiment Videos

Does restructuring hospitals result in greater efficiency?--An empirical test using diachronic data.

Jeffrey Braithwaite1, Mary T Westbrook, Donald Hindle

  • 1Centre for Clinical Governance Research in Health, University of New South Wales, Sydney, Australia. j.braithwaite@unsw.edu.au

Health Services Management Research
|January 28, 2006
PubMed
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Hospital restructuring for cost efficiency is common, but this study found little evidence to support it. Changes in hospital structure did not consistently improve efficiency and sometimes led to decreased performance.

Area of Science:

  • Health Services Management
  • Hospital Administration
  • Healthcare Economics

Background:

  • Hospitals frequently undergo restructuring, often justified by the pursuit of increased cost efficiency.
  • The impact of different organizational structures on hospital cost efficiency remains a critical area of investigation.

Purpose of the Study:

  • To investigate the relationship between hospital structural changes and cost efficiency in Australian teaching hospitals.
  • To evaluate whether specific organizational models (traditional-professional, clinical-divisional, clinical-institute) influence hospital cost efficiency.

Main Methods:

  • A 5-6 year study of 20 major Australian teaching hospitals.
  • Hospitals were classified by structure (TP, CD, CI) and cost efficiency (average cost per case, AN-DRG weighted, inflation-adjusted).

Related Experiment Videos

  • Analysis compared efficiency before, during, and after structural changes.

    • Main Results:

    • No significant efficiency differences were observed in the first two years after restructuring from traditional-professional (TP) to clinical-divisional (CD) or clinical-institute (CI) structures.
    • Hospitals transitioning from CD to CI structures showed a significant decrease in efficiency, potentially linked to the frequency of change.
    • Overall, hospitals that changed structure showed similar efficiency trends and outcomes to those that did not change.

    Conclusions:

    • The study challenges the assumption that hospital restructuring inherently improves cost efficiency.
    • The type and frequency of structural changes may have varied impacts on hospital performance.
    • Evidence does not strongly support restructuring as a guaranteed method for enhancing hospital cost efficiency.