Is the quality of hospital care a function of leadership?

Multiple regression analysis was used to evaluate the relationship between hospital quality and independent variables of interest. While past studies have analyzed hospital efficiency to evaluate organizational performance, this study is unique because it evaluates the relationship between quality and efficiency. The study incorporates an independent variable, "efficiency," calculated using a variable returns-to-scale, input-oriented, data envelopment analysis methodology. This article provides an innovative approach to measuring cost and quality as the federal government attempts to realign scarce health care resources to better meet local community needs. Data for 143 hospitals in 2000 were analyzed using multiple regression and data envelopment analysis to evaluate hospital quality. These results have managerial implications related to improving hospital quality as well as enhancing organizational performance. The study has policy implications on the relationship between quality and efficiency and supports current initiatives related to pay-for-performance in the health care industry. This study clearly documents the positive relationship between quality and efficiency, which supports the premise that hospital leadership through the effective allocation of resources and development of high-performance work processes is important to improve quality of care.