On the relations between focus, experience, and hospital performance.

Background: In the United States, a long-standing debate has existed over advantages/disadvantages of general versus specialty hospitals. A recent stream of research has investigated whether general hospitals accrue performance benefits from a focus strategy; a strategy of specializing in certain clinical conditions while remaining a multiproduct firm. In contrast, a substantial and long-standing body of research on hospitals has been concerned with the absolute volume of cases in a service area as an indication of experience based largely on the idea that absolute volume confers learning opportunities.

Purpose: We investigated whether hospital focus and experience in a service area have complementary effects or are largely substitutive for hospital performance.

Methodology/approach: Key data sources were patient discharge records and hospital discharge profiles from California's Office of Statewide Health Policy and Development for years 2010-2014. We specified hospital focus as the proportion of total cardiology-related discharges and hospital experience as the cumulative volume of cardiology-related discharges for each hospital. Performance was specified using quality (inpatient mortality and 30-day readmission) and efficiency (length of stay and cost) patient-level performance metrics. We analyzed the data using logistic and log-linear ordinary least squares regression models.

Results: Study results generally supported our hypotheses that focus and experience are related to better quality and efficiency performance and that the effects are largely substitutive for hospitals.

Conclusion: Our study extends the literature by finding that hospitals exhibit distinct and stable patterns regarding their positioning on focus and experience and that these patterns have important implications for hospitals' performance in terms of quality and efficiency.

Practice Implications: Many general hospitals in the United States may be stretched too thin across service areas for which they lack necessary patient volumes for clinical proficiency. A viable alternative is to select a limited set of service areas on which to focus.