Study shows hospital administrative intensity affects health care improvements

For hospital administrators, there’s a sweet spot between being too hands-on and being too hands-off when it comes to management. In the middle ground, health care leaders can improve patient safety and patient experience outcomes by how they empower staff to make decisions.

Aravind Chandrasekaran

Aravind Chandrasekaran

TDA affiliate Aravind Chandrasekaran, PhD, Associate Professor in Management Sciences at Fisher College of Business, is using data analytics to work toward pinpointing the optimal level of administrative intensity.

“Too little or too much administrative intensity can jeopardize the effectiveness of organizational initiatives aimed at developing bottom-up decision-making processes, such as empowering nurses and involving them in strategic hospital decisions, a feature that is common in Magnet-certified hospitals,” he says.

U.S. hospitals are required by health care reimbursement policy to improve safety-related conformance and patient-experience quality simultaneously. While top-down direction from administration is considered useful in improving conformance, experiential quality concerns caregiver-patient interactions that more frequently require staff judgment. Magnet Certification is a sought-after designation that indicates an educated, empowered caregiving workforce.

For a study published in the journal Production and Operations Management, Chandrasekaran, together with Peter Ward, PhD, Richard M. Ross Chair in Management at Fisher, and Claire Senot, PhD, a former student who is now faculty at Tulane University, investigated the effects of bottom-up and top-down decision processes on an organization’s ability to improve both conformance and experiential quality. The team used rich qualitative insights from a case study at six large acute care hospitals that involved more than 50 semi-structured interviews with hospital administrators and front-line care providers. Using those insights they formed hypotheses that they then tested and refined using secondary data from 3,000 hospitals using six sources: Centers for Medicare and Medicaid Services cost reports, impact files, and hospital files; process of care metrics; satisfaction surveys; and the American Nursing Credentialing Center.

Based on the data analysis, “administrative intensity of the hospital mitigates its benefits from obtaining Magnet certification on its ability to improve both on patient safety and patient experience standards,” says Chandrasekaran. “We also find that this relationship is nuanced, and that hospitals with moderate administrative intensity can benefit the most compared to low and high intensities.”

For a 200-bed hospital, for example, results suggest that if it were a Magnet hospital, it is associated with simultaneous improvement in patient safety and experience standards only if the administrative intensity is at moderate levels (between 11% and 26% in the study’s sample) compared to high (above 26%) and low levels (below 11%). Bottom line, these numbers equate to several thousand dollars in Medicare reimbursements.

While the line may be subtle, the researchers concluded that the crucial impact of bottom-up decision-making on improvement is deeply influenced by the degree of administrative intervention. Enough—but not too much—is just right.

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