An organizational field approach to resource environments in healthcare: comparing entries of hospitals and home health agencies in the San Francisco Bay region.

OBJECTIVE

To draw together insights from three perspectives (health economics, organizational ecology, and institutional theory) in order to clarify the factors that influence entries of providers into healthcare markets. A model centered on the concept of an organizational field is advanced as the level of analysis best suited to examining the assortment and interdependence of organizational populations and the institutional forces that shape this co-evolution. In particular, the model argues that: (1) different populations of healthcare providers partition fiscal, geographic, and demographic resource environments in order to ameliorate competition and introduce service complementarities; and (2) competitive barriers to entry within populations of providers vary systematically with regulatory regimens.

DATA SOURCES

County-level entries of hospitals and home health agencies in the San Francisco Bay Area using data from the American Hospital Association (1945-1991) and California's Office of Statewide Health Planning and Development (1976-1991). Characteristics of the resource environment are derived from the Area Resource File (ARF) and selected government censuses.

METHODS OF ANALYSIS

A comparative design is applied to contrast influences on hospital and home health agency entries during the post-World War II period. Empirical estimates are obtained using Poisson and negative binomial regression models.

RESULTS

Hospital and HHA markets are partitioned primarily by the age and education of consumers and, to a lesser extent, by urbanization levels and public funding expenditures. Such resource partitioning allows independent HHAs to exist comfortably in concentrated hospital markets. For both hospitals and HHAs, the barriers to entry once generated by oligopolistic concentration have declined noticeably with the market-oriented reforms of the past 15 years.

CONCLUSION

A field-level perspective demonstrates that characteristics of local resource environments interact with interdependencies of provider populations and broader regulatory regimes to affect significantly the types of provider organizations likely to enter a given healthcare market.