Dissertation Title:  "'Everything for Everybody'? An Examination of Organizational Scope in the Hospital Industry"

In light of contemporary characterizations of the American hospital as an “everything for everybody” institution, this dissertation examines organizational scope in the hospital industry through the lens of the patient problems hospitals address. Following an introductory chapter, in chapter two I examine the emerging perspective that the optimal design of health care organizations depends on the specific characteristics of patient conditions. I do so specifically by examining whether the efficiency benefits of volume (scale) and operational focus (scope of services) depend on the degree of patient comorbidity. Using data from a sample of U.S. hospitals, I find evidence that the average efficiency benefits of volume and focus are diminishing in the level of patient comorbidity.

In chapter three I examine the relationship between operational focus and performance in cardiovascular care, taking into consideration the frequent comorbidities cardiovascular patients have. Drawing on corporate research on related diversification and distinguishing between direct and complementary spillovers, I examine the extent to which the marginal quality benefits of focus in cardiovascular care depend on the degree to which a hospital “co-specializes” in related—based on the frequency of comorbidity—areas (complementary spillovers). The results provide evidence of such complementarities in hospital specialization.

In chapter four I draw on complex systems theory to examine overall patterns of comorbidity in light of the complementarities found in chapter three. Specifically, I conceptualize comorbidity as a network of disease in which network ties are determined by the frequency of co-occurrence. I explore this system using the tools of network analysis and draw two conclusions. First, comorbidities among hospital patients exhibit clear patterns, which may be characterized with a “core/periphery” structure. Second, clustering patterns in the network suggest that even for conditions where comorbidities suggest a broader scope (such as cardiovascular disease), the optimum likely stops short of “everything for everybody” organizations.

Chapter five concludes the dissertation with some thoughts about the implications of the research presented for existing health care organizations, and possible future areas of inquiry.