Organizational and Environmental Factors Associated with Hospital Financial Performance: A Systematic Review

Abstract

U.S. hospitals are challenged to improve their financial performance due to its ever increasing role for their survival, especially in the light of the recent legislative, and demographical developments such as Patient Protection and Affordable Care Act, value-based purchasing, and retirement of baby-boomer generation. Despite the increasing focus on financial performance, there is a lack of attention in systematic evaluation, analysis, and synthesis of the findings of the existing literature. This review aims to fill this gap by systematically aggregating 23,557 articles, applying a priori inclusion criteria, and qualitatively abstracting and quantitatively synthesizing 81 empirical studies from last 20 years (1996-2016). The quantitative assessment of investigated relationships between independent and dependent variables in these 81 studies suggest that the organizational factors as predictors and profitability measures as responses were the most frequently used variables. This review provides a valuable resource for both the practitioners and the researchers about the organizational and environmental predictors of financial performance by accounting for frequency, sign, and strength of the existing relationships. For example, out of 10 investigated relationships between teaching status and operating margin; 30% were significant and negative, and 70% were non-significant, whereas in the case of total margin out of 8 investigated relationships; 13% were significant and negative, 75% were non-significant, and remaining 13% were significant and positive. This review reveals the mixed findings and disproportionate focus on profitability measures in existing studies. It also identifies the major gaps and provides future directions.