Impact of environment on state university hospital performance. An explanatory model.

This article, by means of a path model, shows the impact of environment on state university hospital performance. The state environment is shown to affect systematically the intensity of local competition, the reputation of the medical school, the financial independence of the parent university, the allocation of indigent care dollars, the nature of governance and management, and the performance of the hospital. Results show that while certain environments are predictably more supportive of universities and university hospitals, these environments tend also to attract health care competition. Competition is shown to pressure hospitals into greater efficiency, but competition is shown also to hurt viability. But a hospital management that pays attention to the hospital environment is shown to help both efficiency and viability. The model explains respectively 37% and 46% of the variance in hospital efficiency and viability.