Patient Centered but Employee Delivered: Patient Care Restructuring, Turnover and Organizational Outcomes in Hospitals

Ariel Avgar University of Illinois at Urbana-Champaign

Rebecca K. Givan Cornell University

Mingwei Liu Rutgers University

* Authors contributed equally to this paper. Names appear in alphabetical order.

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Abstract This article examines organizational outcomes associated with the use of patientcentered-care (PCC), an increasingly prevalent alternative approach to patient care delivery, which focuses on enhancing patient input and voice alongside better coordination of frontline work. A patient-centered approach in healthcare is somewhat analogous to a high performance work systems approach in manufacturing. More specifically, using data from 173 hospitals in the United Kingdom, this article tests the authors’ hypotheses that PCC has a positive effect on the quality of patient care and on patient perceptions of their care. In addition, the authors test the hypothesis that employee turnover intentions partially mediate the relationship between PCC and quality of care and patient satisfaction outcomes. Analysis of the data provides support for the argument that the restructuring of delivery of care practices from an institutional focused pattern to one that places patients and their needs at the center does have positive consequences for both quality of care, measured through reported errors, and patient perceptions of care. The use of PCC practices reduces medical errors and increases patient ratings of their satisfaction and the dignity and respect they received. The paper also supports the hypothesis that PCC positively affects a central employee outcome—namely intentions to quit the organization. Finally, the authors provide partial support for the hypothesis that employee turnover intentions partially mediate quality of care outcomes associated with PCC. Turnover intentions partially mediated the relationship between PCC and medical errors.

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Over two decades of industrial relations and human resource management research have established a clear linkage between the organization of work and specific work practices and a variety of performance outcomes (see for example Batt, 1999; MacDuffie, 1995; Huselid 1995; Ichniowski, Shaw, and Prennushi, 1997; Youndt et al., 1996; Katz, Kochan, and Weber, 1985). Indeed, existing workplace scholarship has made substantial advances in delving inside the ‘black box’ and determining which particular practices improve outcomes and some of the underlying mechanisms behind these relationships (Givan et al., forthcoming; Ichniowski et al., 1997; MacDuffie, 1995). Nevertheless, there are still settings, such as the healthcare industry, in which the insights and lessons learned about the organization of work and organizational outcomes have not yet been fully explored and empirically tested. Although the healthcare industry is one of the fastest growing sectors of the economy in many developed and developing countries and employs a substantial portion of the workforce, research on the link between work practices and organizational, employee and patient care outcomes in this setting is still vastly underdeveloped (for a similar claim see Preuss, 2003; West et al., 2002). This paper seeks to address this gap by examining the effects of the reorganization of methods used to deliver patient care on clinical and employee outcomes. More specifically, we study the effects of patientcentered methods of delivering care on medical errors, patient perceptions of care and the mediating role of employee turnover intentions. Despite the growth and centrality of healthcare as an industry in much of the industrialized world, hospitals and other healthcare organizations are in a state of crisis (Porter and Teisberg, 2006; Weinberg, 2003; Clark, 2002; Lee and Alexander, 1999).

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Faced with the soaring costs of providing healthcare services alongside intense competitive pressures, healthcare organizations are struggling to provide high quality patient care while also remaining financially viable (Weinberg, 2003; Porter and Teisberg, 2006). Concerns for the quality of care provided by healthcare organizations in the United States have received extensive public and academic attention. Thus, for example, in a frequently cited 2000 report by the Institute of Medicine (IOM) it was estimated that as many as 98,000 patients die each year as a result of medical errors (Kohn et al., 2000). More recently, the IOM reported that as many as 1.5 million patients are harmed each year as a result of medication errors (Aspden et al., 2007). 1 Unfortunately, the U.S is not alone in this respect (Department of Health 2000, 2001; National Audit Office, 2005). A report by the British National Patient Safety Agency indicates that in the twelve months prior to March 2008, there were over 76,000 medication errors reported in acute hospitals in England and Wales, and over 80,000 errors in treatment or procedures. Patient safety incidents resulted in 3,471 deaths in the UK in this time period (National Patient Safety Agency National Reporting and Learning System, 2008). In an effort to address this crisis and improve the quality of patient care, hospitals and other healthcare organizations have been experimenting with a variety of different work and patient care delivery reorganization initiatives (Aiken et al., 2002a; Walston et al., 2000; Lee and Alexander, 1999; Alexander et al., 1996; Pierson and Williams, 1994). Many of these initiatives represent a shift towards, what some have referred to as, a high

In fact, the IOM has sponsored a series of well publicized reports that all deal with the quality of care challenges inherent to the healthcare system in the United States and some of the potential ways to meet them.

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performance work systems (HPWS) model for healthcare (see for example Westphal et al. that are unique to this arena. Bergeson and Dean. which do not necessarily fit the traditional HPWS constructs and frameworks developed in other settings... Batt. West et al. from an institutional and physician focus emphasizing professional roles and hierarchies to an emphasis on patient needs and preferences (Wolf et al. Flach et al. there are still many insights developed in these settings that have not yet been fully tested in the healthcare setting (for a similar claim see Preuss.. Epstein et al. 2004). 2002.. 1997. 5 . 2008. These are essentially changes to the actual organization of work and to the processes used to deliver patient care. for example. 2006. shifting. 2000). such as HPWS. 1999 for a discussion of work innovation in the telecommunications industry). hospitals have also attempted to restructure the philosophy underlying the manner in which they deliver care to their patients. Thus. there are workplace innovations.. healthcare organizations have been seeking to benefit from a workplace model that has been both more prevalent and more intensely researched in the manufacturing and some service sector settings (see for example Scotti et al. Although some research has applied the discussion regarding innovative work practices from the manufacturing to service sectors (see Batt. Furthermore. such as the one addressed in this paper. 2005. alongside pure work practice restructuring. Walston et al. 2006). 2007. Thus. Many of the initiatives being implemented by hospitals target both the organization of frontline workers and the overall approach to delivering patient care.. 2003)..

First. West et al.. and Prennushi. 2002). Huselid. and the associated work reorganization that it entails. and Gobeille. our data show that 6 . MacDuffie. In order to address these questions. 1995. Kochan. 2006. improve the quality of care provided? Second. which has examined the effect of work practice innovation and human resource management practices on performance outcomes for over two decades (Ichniowski. Kochan. this paper addresses two underlying research questions. much less attention has been given to the study of innovative approaches to the delivery of patient care (Davis et al. Katz. Katz. emergency readmissions. we use a unique dataset combining hospital performance data with patient and employee level data.. Using data from 173 hospitals in the United Kingdom. This article examines the effects of patient-centered-care. and patient satisfaction in hospitals and the mediating role of employee turnover intentions. on medical errors. an increasingly prevalent alternative approach to patient care delivery. and Weber. the paper tackles two fundamental healthcare issues—namely factors influencing quality of patient care and the role of employee turnover.. 1985. As will be demonstrated below. 1997. does employee turnover mediate this direct effect? In doing so. Shaw. 1995.Although scholars have recently begun to examine the effects of work practice innovation on patient outcomes (see for example West et al. if such practices do improve patient outcomes. 1983). does the restructuring of patient care delivery practices. This is in clear contrast to the well-established research on work and processes reorganization in the manufacturing sector. 2005). which focuses on enhancing patient input and voice alongside better coordination of frontline work.

West et al focused on three primary human resource practice areas: training. 1994). 2003. The authors found strong support for a negative and significant relationship between the three HR practices studied and mortality rates (p. 2002. specify the mechanisms by which human resource management practices might affect mortality.. West et al.. The authors collected survey data from human resource executives in 81 hospital trusts (of a population of 137). however.patient centered care reduces medical errors and increases patient satisfaction and that this relationship is mediated by the reduction in frontline staff turnover intentions. and employee appraisals. In addition to the three human resource management areas studied by West et al (2002). employee participation. 2000. Nevertheless. Aiken et al. 2006. West et al.. 2009. West et al (2006) extended this earlier research by examining the relationship between HR practices associated with HPWS and patient mortality rates in 52 hospitals in England. The authors did not. Preuss. 7 . thereby moving from a single practice focus to a complementarity or systems approach. in this study the authors examined decentralization. more recent research has examined the relationship between some work arrangements. The Organization of Work and Quality of Care: Existing Evidence The direct assessment of work practices and performance has lagged behind similar inquiries in other industries.. 1305). Borrill et al. teamwork.. Performance data was collected on actual patient care measures focusing on mortality rates as a function of various medical procedures. such as the use of teams and other coordination patterns and patient care indicators (see for example Gittell et al. West and colleagues (2002) provided one of the first comprehensive analyses of the link between work practices and healthcare related performance outcomes.

empirical findings on this relationship help to identify appropriate outcome variables of interest and..5 percent lower than heart attack mortality rates in nonunion hospitals. The presence of unions in health organizations does not fall under the traditional literature on work practices and performance. Ash and Seago (2004) found that heart attack mortality rates in hospitals with unionized RNs were 5. In addition. the authors maintain that the union effect on productivity and patient care in these hospitals was principally because unions facilitate communication and collaboration. 993).employment security. more importantly. This evidence suggests that other work related practices that promote communication and collaboration may increase the quality of patient care as well. across occupational groups and between managers and employees (Ash and Seago. staffing related practices and compensation (West et al. 2006: 986). the mechanisms by which work arrangements may affect performance outcomes. the authors found that improved patient care outcomes were not the consequence of higher union wages and better working hours. The authors report regression analysis that supports the negative relationship between the use of a bundled set of high performance practices and patient mortality rates (p. Evidence on the effects of workplace practices on organizational outcomes in healthcare is also available from studies of the relationship between unionization and organizational performance. Rather. In a recent study of mortality rates for heart attack patients in 344 hospitals in California. the authors find support for an individual practice effect on patient mortality. Notably. 2004). However. This analysis broadens the independent variables but retains the emphasis on a single dependent variable—namely mortality rate. 8 .

there is still limited evidence on possible indirect effects or mediating constructs. the majority of the research thus far has examined work practices in a vacuum without assessing them in the context of a broader pattern and reorganization of patient care delivery. In addition. existing research. these studies are limited in a number of key respects. This said.. such as patient satisfaction. This early research on work practices and performance in healthcare is parallel to earlier HPWS work in the manufacturing setting which focused primarily on productivity (production speed) and wastage as the key performance indicators (for example Ichniowski et al. like the majority of general human resource practices and performance research. has focused on one central performance indicator—patient mortality rates. often after cardiovascular procedures.This body of research provides an important foundation for the relationship between human resource practices and performance in healthcare. although a direct effect between work practices and outcomes has been established. and employee outcomes and other measures of quality of care. In importing theoretical and empirical frameworks from other settings. This research on work practices and outcomes in healthcare suggests that there are crucial implications for how work is organized in this setting and that different patterns of work can have a substantial effect on quality of care outcomes. 1997). First. employee work organization and 9 . there is a clear need to incorporate additional indicators. As will be illustrated below. HR and IR scholars have tended to focus on the traditional forms of work reorganization in other settings thus placing most of the emphasis on how frontline employees work with less attention to how patients are cared for. Although this outcome is of great significance. Finally and most importantly for the purposes of this paper. such as employee outcomes.

2008. Proponents of the PCC model maintain that one of the causes of poor quality of care is the lack of patient engagement and coordination of care inherent to the traditional physician or institution centered model of care (Robinson et al. Theory Development The Effects of Patient-Centered-Care and Quality of Care and Patient Satisfaction In the search for effective methods to address issues regarding both quality of care and financial viability. should be studied in tandem. healthcare system (Corrigan et al. Wolf et al. primarily the physicians. 2001).. Bergeson and Dean.. 2004). At the heart of the PCC approach to healthcare is a clear departure from the physician or institution centered model. and the organizations in which treatment is provided (see for example Robinson et al. One of the notable exceptions in terms of the separation between changes to the arrangement of work and those implemented in the delivery of care is the relatively recent introduction of patient-centered-care (PCC) practices in healthcare intended both to shift the underlying philosophy of care and the organization of work needed to do so. 2000). 2008. without linking the way patients are cared for with the way front line staff is organized to do their work.S. Flach et al.patient care delivery are integrally related and. Mead and Bower. Epstein et al. 2008. For the most part. healthcare organizations have sought out new ways to deliver patient care and to organize frontline work. Furthermore. these two approaches have been adopted separately. In 2001... as argued in this paper.. which places almost all the power and authority regarding patient care in the hands of the treating professionals. the IOM included PCC as one of the six measures central to the rebuilding of the U. the IOM 10 . 2006.. 2005.

More specifically. 2002.. PCC therefore provides a unique opportunity to examine the outcomes associated with the combined restructuring of both methods for treating patients and the organization and structure of the work conducted by frontline staff and physicians in hospitals. PCC calls for improved coordination between different professional groups (physicians and nurses for example) and across organizational units (for recent research on the positive healthcare outcomes associated with coordination see Gittell et al. 11 . 2006). the PCC model is designed to redistribute the decision making power in the provider-patient relationship and provides the latter with greater voice and input in the development of treatment options and in their execution (see for example Robinson et al. This approach echoes a renewed focus on customer service and satisfaction in other service sector contexts (see for example Batt. and desires (Robinson et al. 2005). needs. Thus.. Wolf et al. 1999). Lemieux-Charles and McGuire. Alongside the transformation in the philosophy underlying the delivery of care in hospitals that adopt PCC. 2008. 2008.has maintained that this model of patient care is inextricably linked to the design of work (Corrigan et al. 2008). Batt. PCC is founded on the notion that information should be shared between physicians and patients and. this model also entails restructuring of the workplace practices that facilitate the interaction between frontline staff and clinicians.. In addition. one of the central dimensions of the PCC model is the organization of work around interdisciplinary teams (Wolf et al. 2008. 2001: 118) Thus. Davis et al... transforming the relationship between the hospital and the patient requires. The overarching goal of the PCC model is to provide care that is most conducive to patients’ preferences. arguably.. a transformation in the organization of work for frontline staff. 2008)..

which focuses on altering the involvement of employees. Unlike the HPWS model in other settings. 2005. then.. which. make up PCC as a delivery of patient care construct. for a similar dimensions see IOM. 2001). PCC has received virtually no attention in the industrial relations or human resource management scholarship. involvement and coordination and an emphasis on productivity and performance outcomes are very similar to the innovations currently pervading healthcare. We contend that patient-centered care is. staff engagement. that decision making is based on patient involvement so that viable treatment or medication options take into account patient preferences and perspectives (Davis et al. 2005. (3) patient education or information systems. [Insert Table 1 about here] 12 . Corrigan et al. the focus on quality through specific “production” processes. in many ways. PCC entails the facilitation of input and participation both from frontline staff and also from the patients they care for. Each of these core dimensions is intended to shift fundamental aspects of how healthcare organizations operate and provide care for patients. and (5) patient emotional support (Davis et al. The most frequently cited PCC dimensions are (1) access to care. (2) patient engagement in care or patient preferences. implemented together. is potentially a dramatic change in both the structure and process of work.. (4) coordination of care.more importantly. The existing PCC literature has identified five dimensions. Despite the clear implications for the way in which hospital staff work. parallel but not identical to the high performance work system (HPWS) approach in manufacturing and other service sector settings. It calls for a shift in how workers are organized and in the manner in which they execute their work. 2001: 49). Specifically. PCC..

2000. This is in contrast to the deep knowledge in the field about equivalent processes in manufacturing. the focus on increased patient education is designed to enhance patient understanding of their conditions. is specifically related to the manner in which frontline staff are organized in order to deliver care. Furthermore. For example.. Specifically.. despite the increase in the use of PCC based methods of delivering care.. Stewart et al (2000) reported a significant statistical relationship between patient-centered communication practices and clinical outcomes. For example..As is evident. there is almost no attention to this form of work organization in industrial relations and human resource management scholarship. 13 . 2008). four of these PCC dimensions are intended to alter the traditional relationship between hospital patients and those who provide them with care. Transforming healthcare in this manner is supposed to improve the quality of care provided to patients and increase their associated satisfaction levels (see for example Wolf et al. Interestingly. coordination of care. one of the five PCC dimensions. 2008. patients’ perception of patient centeredness was statistically and clinically related to improved recovery and fewer diagnostic tests and referrals (see Stewart el al. That said. 2008). the evidence regarding its effectiveness in improving the quality of care provided and in increasing patient satisfaction is limited (Charmel and Frampton. As noted. despite PCC’s implications for the study of the workplace. for additional empirical evidence on the effects of PCC see Wolf et al. and the growing knowledge about similar processes in other parts of the service sector. treatment option advantages and disadvantages etc. 2008). there is some empirical evidence which supports a positive relationship between the adoption of PCC and improved quality of care outcomes. Wolf et al.

clinical and patient perceptions. by itself. and on the wider body of literature developed outside this setting. we hypothesize that PCC will have a positive effect on both clinical outcomes as well as patient perceptions of care. Building on the existing evidence on work practices and performance in healthcare. Hypothesis 1: Greater use of patient-centered-care practices will increase the quality of care provided by a hospital. a contribution to what is currently known about PCC and its effects on outcomes. Hypothesis 2: Greater use of patient-centered-care practices will increase patient satisfaction ratings. We argue that the shift towards a method of delivering care that provides patients with greater opportunities for engagement alongside the restructuring of work so as to allow for more teamwork and cross functional coordination will have a positive effect on key organizational outcomes. The Mediating Role of Employee Turnover Intentions Our first two hypotheses above propose a direct relationship between the reorganization of patient care delivery in the form of PCC and two patient care outcomes. we wish to extend our exploration of this construct and examine the 14 . one can argue that lessons and evidence generated in the industrial relations and human resource management realms can assist in developing hypotheses regarding the effects of PCC practices on organizational outcomes. At the heart of the PCC model is a rationale parallel to the one advanced by high performance work system scholars. namely quality of care and patient satisfaction. discussed above.In addition to this evidence. Nevertheless. Providing empirical support for these hypotheses is.

2002. Huselid (1995) provided strong empirical support for the mediating role of turnover in the relationship between high performance work systems and financial performance. As reviewed above. and productivity and financial performance in 968 US firms across different industries. through employment related outcomes. Arthur. we propose that employee turnover intentions mediate the relationship between PCC and medical errors and patient satisfaction (for existing industrial relations and human resource management literature on the relationship between work restructuring and turnover see Batt. 1995. we return to the established industrial relations and human resource literature. the adoption of PCC by healthcare organizations has substantial implications for the way in which work is arranged for frontline staff and physicians. Huselid (1995) examined the relationship between HR practices associated with HPWS. The 15 . such as contingent compensation and employee participation. Primarily.implications for employee outcomes and the potential mediating role as a mechanism through which PCC affects central organizational outcomes. 1994). a greater level of cross occupational coordination is emphasized alongside increased teamwork. More specifically. The large body of existing empirical evidence provided in the industrial relations and human resource management literature on the mechanisms through which HPWS enhance organizational performance lead us to explore the mediating relationship of employee outcomes between PCC and other organizational outcomes. In order to support this overarching proposition that the improvements in outcomes for healthcare organizations are delivered. at least in part. the effect of PCC on clinical and patient satisfaction outcomes is integrally linked to effects on frontline employee outcomes. Thus. Huselid.

As noted. through a negative effect on employee turnover. among other practices. evidence 2 Correcting for possible measurement error. 656).05 percent decrease in employee turnover (p. 658). an increase of one standard deviation in use of high performance work practices was associated with a 7. Batt (2002) also found support for the role of lower turnover rates in explaining the effects of work restructuring on organizational outcomes.2 Huselid found that one of the clear mechanisms through which this organizational outcome was delivered involved the reduction in employee turnover. call centers.000 per employee (p. in part. enjoyed higher sales growth and that this relationship was mediated by lower employee quit rates (pp. He estimated that an increase in one standard deviation for HPWS practices was associated. 594-595). In her study of human resource practices in U. 16 . Huselid and Becker (1996) estimated a more modest $15. Given that our study focuses on restructuring in the healthcare setting. Batt’s service sector findings provide an important foundation for our partial mediation hypotheses outlined below.S.author’s results supported an overall positive relationship which was translated into an actual dollar figure associated with increased productivity due to the use of practices corresponding to the HPWS. much of the research regarding the effects of high performance work practices has been conducted in the manufacturing setting. with increased market value of approximately $18. Batt (2002) found that call centers that employed human resource practices that enhanced employee participation and work in teams.000 increase in market share per employee. In a study of work practices in the telecommunications industry. among other things. According to his findings. What this evidence suggests is that the direct effects of a dramatic restructuring of work were delivered.

2005). 589). hospitals are. Batt explains the relationship between the work practices examined and lower quit rates as a function of increased autonomy (p. The second underlying dimension 17 . arguably. since the reduction of medical errors and the increase of patient satisfaction is not as responsive to turnover cost reduction as sales and financial performance might be. First. Our hypothesis regarding the relationship between hospital use of PCC and lower turnover intentions rests on the two underlying dimensions of these practices. in turn. rests primarily on the reduction in the costs associated with employee turnover.. It is proposed that frontline employees are interested in working for hospitals that provide them with the processes and resources to address patient needs and concerns (for a similar general argument see West et al. Although we believe that turnover plays a similar role in mediating the relationship between PCC and medical errors and patient satisfaction. We hypothesize that PCC adoption will reduce employee turnover intentions and that this reduction will. it is also founded on the assumption that redesigning the role of frontline staff in a manner that increases involvement will enhance the ability to provide high quality service or patient care. the rationale for this relationship cannot rest on the simple cost of turnover argument. PCC represents a departure from institutionally driven patient care to an approach that places the patient at the center of the process. In addition. In doing so. The relationship between turnover and enhanced organizational outcomes. improve quality of care and patient perceptions of their care. Although PCC restructuring is not identical to the work practices examined in Batt’s research.from other service sector settings is especially important. enabling frontline staff to refocus their energies on their core mission—namely caring for patients. such as financial outcomes and sales.

In an industry plagued by recruitment and retention challenges alongside the inherent need for highly skilled employees. Clark et al. Ash and Seago. among other things.. the ability of providing increased employment stability is of central importance and will. 2008. to the associated tenure levels and organizational stability (p. The reduction in employee turnover is likely to directly affect the two outcomes examined (quality of care and patient perceptions of their care) by increasing employee skill level and organizational stability. we propose that healthcare professionals will prefer to work in hospitals that facilitate this organization of work. 2001. Similarly. We therefore hypothesize that alongside the direct effects of PCC on clinical and patient satisfaction outcomes. Existing healthcare research has documented the relationship between turnover rates and quality of care in hospitals and other healthcare organizations (see for example Plomondon et al. 440). see Waldman et al. What this review indicates is that the reorganization of work has both direct and indirect effects on a variety of organizational outcomes. translate into increased quality of care (Charmel and Frampton. 18 . for a discussion regarding the substantial negative costs associated with turnover in healthcare organizations. it is proposed.. which will translate into a reduction in turnover intentions.associated with PCC is enhanced interdisciplinary coordination and teamwork alongside greater discretion on the part of frontline staff. we argue that the adoption of PCC will reduce employee turnover intentions. 2004). 2007. 2002(b). Aiken et al. 2004). Ash and Seago (2004) speculated that the positive relationship between union status and mortality rates after heart surgery was due.. In their study of the effects of nurses’ unions on quality of care.. Here too. which in turn will increase employee tenure levels and organizational stability.

employee survey data for the years 2003-2005 and patient survey data for the years 2001-2005. Hypothesis 3: Greater use of patient-centered-care practices will have a negative effect on employee turnover intentions. inpatients. All NHS hospitals are required to report a variety of performance indicators using a number of different methods. are delivered. Using these multiple sources. Support for this proposition will reinforce the claim made throughout this paper that the restructuring of patient care practices have direct implications for frontline staff. In putting together our dataset. we have triangulated self-reported performance data with third-party administered staff and patient surveys. As a fairly centralized public healthcare system. we constructed a master data set from several years of publicly available data. like PCC. survey and audit data publicly available.e. Hypothesis 4: Employee turnover intentions will partially mediate the relationship between PCC use and quality of care and patient satisfaction.proposed above. through their effects on employee level outcomes. outpatients. the NHS makes most of its performance. Furthermore. there is an indirect effect operating through the reduction of employee turnover intentions. at least in part. Since the performance measures and survey questions evolved over time. The initial data set included hospital performance data for the years 2001-2005. Data and Methodology Data The data used to test the four hypotheses outlined above was compiled from the British National Health Service (NHS). and different categories of patients (i. and patients in 19 . it will support the argument that the outcomes associated with patient care redesign.

We triangulated this trust reported data with survey data from patients and employees—both key stakeholders in healthcare organizations. 1997). 2006. and 2005. Wright et al. which focus on a single area such as pediatrics. which included inpatient survey data of 2001.the emergency department) were surveyed across these years. orthopedics or ophthalmology). Some trusts operate hospitals on multiple sites (although usually no more than two or three) but remain a single organization with a unitary management structure. The management reported its status on a broad range of criteria. and Ichniowski et al. we used data from different matched years to conduct our analyses. 2003. we used a subset of the data compiled. Due to the somewhat devolved nature of the National Health Service (see Greer..a trust is a single organization and is the key administrative unit of the National Health Service. 2003. 2004). In our analysis for this paper. there is also a procedure for inspecting each trust every few years to ensure that the actual functioning matches the self-reporting. to staff absenteeism rates. from treatment times for specific medical issues. Bloom and Van Reenen. and performance data of 2001 and 2003.. Both sets of data are 20 . the data we use is confined to English hospitals. This data alone is similar to data sets used by many scholars in that it combines a single respondent survey with performance data (eg. A hospital trust is the unit of analysis. The performance data used here (all collected prior to a major transition in the inspection and rating regime in 2006) were collected annually from each trust’s management team. Although there were initial concerns about accuracy of reporting procedures (see Givan 2005). employee survey data of 2003 and 2005. The data was collected from 173 acute and teaching hospitals (excluding specialist hospitals.

rather than attitudes or perceptions. We believe that these two measures capture important aspects of the patient experience.000 respondents each year. we contend that patients are the only stakeholders truly equipped to A copy of the employee survey instrument used can be found at: http://www. The survey is nationally coordinated and implemented by each NHS trust. Response rates have generally been around 44% for emergency department patients with about 55.uk/_db/_documents/04007747. Earlier research has used patient surveys to measure primarily patient satisfaction as a dependent variable (see for example Vahey et al.3 The individual data is not publicly released. Indeed.from national surveys using consistent survey questions and methods over time.healthcarecommission. We utilize the patient data to measure practices. according to a common sampling framework. The staff survey has a response rate of slightly over 50% with approximately 60. Our patient data come from an annual patient survey.4 The unique nature of our dataset allows us to utilize patient perceptions items for both the quality of the care that they received and for the ‘respect and dignity’ with which they were treated.cfm 3 21 .. 2004). The framework that we utilize requires this analysis of patient perceptions of their care alongside clinical and quality of care outcomes.org.000 patients each year.org.healthcarecommission. and 59% for outpatients with approximately 140. we follow the directive of a widely cited editorial in the British Medical Journal that “the best way of measuring patient centeredness is an assessment made by the patient themselves” (Stewart 2001: 444). we use the aggregated staff survey data for each healthcare trust.uk/healthcareproviders/nationalfindings/surveys/patientsandthepubli c/patientsurveyresults.pdf 4 A copy of the patient survey instrument used can be found at: http://www. and since the healthcare organization is our unit of analysis.000 trust employee respondents for each year used.

much of the current scholarship on work practices and performance uses data from one management respondent matched with additional comparable performance data often derived from public filings for publicly traded companies. we derive patient data from two sources. Finally. Second. rather than assuming that a policy has been implemented as stated by a high level manger.the aggregate data on certain clinical measures from the performance dataset. and (2) the 22 . is unique in its inclusion of employee perception data both on the use of specific managerial practices and on attitudes and satisfaction in general. and survey data from patients themselves on their experience in the hospital. which also includes certain single response items. and c) employee intentions to quit. as a percentage of live discharges (age and sex standardized)(%). As the survey items below indicate. Variables and Measures Our hypotheses outline three dependent variables: a) clinical care. b) patient satisfaction. some of the data from the patients clearly measure inputs (such as whether hospital staff disagreed about procedures) and not outcomes. as well as patient perception data. There are a number of primary advantages to using this multi-source data. First. and on employee perceptions thereof. Our data. Our data provides us with data both on structures and procedures that are in place. In examining clinical outcomes we use measures for: (1) emergency readmissions to hospital within 28 days of discharge (all ages). by utilizing data from multiple sources. we avoid some of the pitfalls of research which relies on a single management respondent to provide data on all management practices.comment on the presence or absence of these practices. Our use of employee data to examine whether work practices are in place allows us to reach the point of implementation.

7 (4) coordination of care (sometimes in a hospital. Strongly agree=5) 7 The six survey questions are: a.932).5 Patient satisfaction is measured using survey items regarding: (1) inpatient overall ratings of care. we are using this variable to measure the extent of errors and near misses. The measurement of patient centered care incorporates measures for the five core dimensions discussed above. Did a member of staff tell you about any medication side effects to watch for when you went home? e. (2) patient engagement in care (were you involved as much as you wanted to be in decisions about your care and treatment?). b. Finally. and (2) inpatient overall ratings of respect and dignity.929). did they have enough opportunity to do so?). Did a member of staff tell you about any danger signals you should watch for after you went home? f. I often think about leaving my current employer.percentage of employees that have seen errors and near misses that could hurt patients or staff in the last month. When you had important questions to ask a nurse. Did this happen to you?) (reverse coding). However. We added them together to get a global measurement of errors and near misses. did you get answers that you could understand? b. 6 The survey question is “to what extent do you agree with the following? a. Did the doctors or nurses give your family or someone close to you all the information they needed to help you recover? 5 23 . Cronbach’s alpha = 0.. Did a member of staff explain the purpose of the medicines you were to take at home in a way you could understand? d. As soon as I can find another job. (Strongly disagree=1. c. we use a scale measuring employee intentions to quit (Cronbach’s alpha = 0.e. i. with regards to employee turnover. (3) patient education (six items. and (5) emotional support (did you find someone on the hospital staff to talk to The survey measured the percentage of employees that have seen errors and near misses that could hurt patients in the last month and the percentage of employees that have seen errors and near misses that could hurt staff in the last month separately. did you get answers that you could understand? c. (1) access to care (if your family or someone else close to you wanted to talk to a doctor. I will leave my current employer. I will probably look for a new job in the next year. and we would rather overestimate than underestimate errors and near misses. This approach exaggerates the percentage of employees that have seen errors and near misses (some percentages are therefore over 100%). a member of staff will say one thing and another will say something quite different.6 The independent variable used in this study is patient-centered-care practices and processes. When you had important questions to ask a doctor.

.. 293) and Cheng (2003. β was a vector of slope coefficients. a fixed effects model is more appropriate when the inferences will apply only to the cross-sectional units in the sample. we took the maximum of the two scores. However.. Thus.. 8 Factor analysis shows a single factor for these dimensions. where Yit represented one specific outcome. employment. T . N . According to Greene (2003. In our analysis..43). Modeling We employed an unobserved effects model to estimate the relationships between patient centered care practices and medical. which increases the possibility of inconsistent estimates. t = 1. we chose fixed effects models or Doctors and nurses were surveyed separately on this question. p. the appropriate model is the random effects model.905. there is a trade-off between efficiency and consistency when making a decision between the two models... and uit was idiosyncratic disturbances.about your worries and fears?). Given our sample and purpose of analysis. while a random effects approach is more appropriate when the inferences will extend to observations outside the sample. The model took the following form: Yit = Xit β + ci + uit i = 1. p.. and patient outcomes. To keep consistency. Nonetheless. ci can be treated as either a fixed effect or a random effect. it assumes that ci is uncorrelated with X it . 8 24 . X it was a vector of patient centered care practices for trust i at time t. The Cronbach’s alpha of the patient centered care scale is 0. ci represented unobserved effect of trust i. although a random effects model provides more efficient estimates.

patient ratings of care. based on the F test or the Lagrangian Multiplier test respectively. errors and near misses that could hurt patients or staff) are positively related with employee turnover intentions and negatively related with patient ratings of care and respect and dignity. patient centered care is significantly and positively correlated with emergency readmissions to hospital. Medical errors (i.43 (the full score is 100) and 4. patient and employee satisfaction may enhance each other.05 respectively. and significantly and negatively correlated with errors and near misses that could hurt patients or staff and employee turnover intentions.e. i. In addition.e. which provides a method to test whether the cost of inconsistency in the random effects model exceeds the gain in efficiency.random effects models based on the results of the Hausman test (1978). These negative relationships between employee turnover intentions and patient ratings of care and respect and dignity may indicate positive interactions between employment and patient outcomes. The average score and standard deviation of patient centered care is 71. In addition. standard deviations. we also tested whether a fixed effects model or a random effects model was a better choice than the pooled OLS regression approach. and bi-variate correlations for the variables used in the study. [Insert Table 2 about here] 25 . and patient ratings of respect and dignity. Results Table 2 reports the means.

Analysis of our data provides partial support for our hypothesized PCC effect on quality of care. p<0.01. Our findings also provide strong support for Hypothesis 3 as demonstrated by equation 5. the regression results of patient-centered-care against errors and near 26 . [Insert Table 3 about here] As seen in Table 4. which we have used as a proxy for quality of care. [Insert Table 4 about here] Finally.001) and patient ratings of respect and dignity (b=0. PCC did significantly reduce observed medical errors that could harm patients or staff (b=-0. p<0. First. As seen in Table 3.001). we also tested the mediating effect of employee turnover intentions on medical errors and patient satisfaction ratings. Hypothesis 2 is fully supported given the significant and positive relationships between patient-centered-care and patient ratings of care (b=0. patient satisfaction. this positive relationship may be due to the fact that emergency readmissions could measure the effectiveness of patient education rather than the quality of clinical care provided.638.Tables 3. in contrast to our hypothesis.846. a higher level of PCC adoption was statistically and significantly related to a reduction in employee intentions to leave the hospital. our results indicate a positive relationship between patient centered care and emergency readmissions to hospitals (b=0. p<0. Thus. and employee intentions to quit. which shows the negative relationship between patient-centered-care and employee turnover intentions (b=-0. p<0. using Baron and Kenny’s (1986) recommended procedures. p<0. 4 and 5 document the effects of patient centered care on clinical outcomes.081.01).001).822.001). On the other hand. As will be discussed in the conclusion below. thus providing support for Hypothesis 1.

as shown in equations 3b and 4b in Table 4. [Insert Table 5 about here] Conclusions and Discussion This paper has provided support for the argument. Therefore. patient ratings of care. patient centered care is negatively related to employee turnover intentions. we found that employee turnover intentions were a significant predictor of errors and near misses that could hurt patients or staff (b=17. p<0. Analysis of our dataset partially supports our 27 . measured through reported errors.8. and patient ratings of respect and dignity show significant effects for all of the three dependent variables (see equations 2a.630 (see equations 2a and 2b in Table 3). However.001) and the negative effect of patient centered care on this dependent variable was reduced from 0. which in many cases has remained theoretical. that the restructuring of delivery of care practices from an institutionally focused pattern to one that places patients and their needs at the center does have positive consequences for both quality of care. which supports our hypothesis that employee turnover intentions partially mediate the relationship between patient-centered-care and medical errors. 3a. the mediating effects of employee turnover intentions on patient satisfaction ratings were not supported.822 to 0.misses that could hurt patient or staff. and patient perceptions of care. Third. when patient centered care and employee turnover intentions were entered into the equations simultaneously. Second. employee turnover intentions do not have significant effects on patient ratings of care or patient ratings of respect and dignity. and 4a in Table 3). as is shown in equation 5 in Table 5.

delivering on the gains associated with this shift. Our findings also support the hypothesis that in addition to increasing patient perceptions of care. These findings are especially relevant given both of the fundamental healthcare challenges raised at the outset of this paper—namely providing high quality patient care and remaining financially viable. are. In an industry plagued by a drastic shortage in skilled professionals and high turnover rates. our evidence regarding the relationship between PCC and turnover intentions and the subsequent effect on medical errors has practical implications for the 28 . which is a persistent challenge in many healthcare systems. while these practices are focused on placing the patient at the center. These findings highlight the importance of employee outcomes in mediating efforts to improve the quality of patient care through delivery of care innovations. In other words.hypothesis regarding the quality of care and demonstrates that the use of PCC practices reduces medical errors that could hurt patients or staff and increases patient ratings in terms of their satisfaction and the dignity and respect they received. Our findings that PCC has a statistically significant effect on improved patient perceptions and on the reduction of reported medical errors provided much needed empirical support regarding the benefits of practices that have been widely adopted in many developed countries. we provided partial support for the hypothesis that employee turnover intentions partially mediate quality of care outcomes associated with PCC. associated with employee related outcomes. Furthermore. Reducing medical errors. PCC positively affects a central employee outcome—namely intentions to quit the organization. and increasing positive patient perceptions of care are essential in addressing both of these challenges. at least in part.

our paper provides support for Batt’s (2002) findings regarding the 29 . Our findings contribute to this body of literature in two central ways. decreases turnover intentions. as noted above. hospitals can adopt patient care methods that provide some gains to patients.. according to these results. for example. Thus. these findings illustrate the need to examine delivery of care innovations based on their implications for multiple stakeholders (for a detailed discussion regarding the need to address multiple stakeholder needs in healthcare see Givan et al. despite the size and rapid growth of the healthcare industry. which in turn has some positive spillovers on the quality of healthcare delivered within the organization. Our paper’s theoretical framework builds on the solid foundation of industrial relations and human resource management literature. For example. PCC. Testing theoretical frameworks developed and examined in traditional manufacturing and service sector settings in the healthcare context is of significant independent value. employees and the organization. these findings suggest that despite the existence of multiple stakeholders central to organizational survival. as indicated by lower error rates.manner in which healthcare organizations can deliver care and increase employee and patient related benefits. there is still not a great deal of industrial relations and human resource management research in this area. which has provided extensive empirical evidence for the strong link between the manner in which work is organized and key organization and individual level outcomes. in examining the relationship between PCC practices and hospital outcomes we sought to reexamine Batt’s (2002) evidence regarding the mediating role of turnover in the service sector setting. First. forthcoming). Put differently. Thus.

PCC was significantly and positively related to patient emergency readmission to the hospital. More specifically. A second and related contribution of our paper is the assessment of a context specific workplace innovation that combines a shift in how work is organized and how patient care is delivered. On the one hand. Similar to Batt’s findings regarding high involvement practices. Despite the differences in both our independent and dependent variables. however. this paper highlights the need for greater cross fertilization between the traditional industrial relations and human resource management research and the emerging body of literature on innovations in the healthcare arena. PCC affects the involvement and integration of both employees and the customers they service—namely patients—in the process and structure of work. as reported above and in contrast to our hypothesis. we find that PCC delivers some of its gains through its effect on employee turnover. We believe that in addition to the contribution inherent to the application of industrial relations and human resource management models in the healthcare setting. this result weakens the argument regarding the benefits associated with the adoption of PCC and its associated work arrangements and emphasizes the need for additional 30 . Unlike many of the workplace innovations studied in other contexts. the findings reported above suggest that there is potential value in examining the relevance of innovations developed in this unique setting for other contexts. we believe that these findings demonstrate the fruitful potential associated with integrating established IR and HR frameworks in the healthcare setting. These conclusions should be qualified.mediating role of employee turnover. given the mixed results regarding effect of PCC on one of the quality of care indicators examined. Taken together.

which has implications for the generalizability of our findings. Regardless of the explanation for this result. As noted above. First. Second. In other words. our measures for PCC and for our patient perception outcomes are both derived from a single patient survey instrument. we are able to assess the effects of PCC on all employees and not just those who left the organization. this methodological limitation raises a response bias concern. Although we are confident that we are capturing separate constructs. measurement of employee intentions allows us to capture the effects of PCC on a broader set of employees. this is a unique system 31 .research. our study does not examine actual turnover. it is possible that the positive effect on patient readmissions is not an indicator of poor patient care. On the other hand. Our paper does have a number of additional limitations that should also be noted. We used employee intentions of turnover instead. which should be addressed in future studies. in contrast to earlier research on the mediating role of employee turnover. On the one hand. it calls for additional research on the relationship between PCC and this quality of care indicator. despite the fact that our dataset is based on three separate sources. data from this study comes from hospitals in the UK. On the other hand. one of the dimensions of PCC is patient education. Although we believe that hospitals in the UK are confronting many of the same pressures and constraints that are affecting hospitals in other developed countries including the United States. It is possible that increased patient education leads to an increase in readmissions since patients are more aware of conditions and symptoms that require hospital treatment. Third. this is a limitation since we are not capturing objective turnover rates. but rather is a result of better-informed and educated patients.

Having acknowledged some of the paper’s central limitations. The size of the data set. We believe that the use of triangulated data provides findings which demonstrate the effects of patient centered care for the multiple stakeholders in the healthcare setting.with specific characteristics and traits that do not exist in other settings. and allows this analysis to avoid the pitfalls of narrower samples and single respondent surveys. Future research should examine the extent to which our findings hold in other counties with different national healthcare systems characteristics. 32 . which rests in the unique quality of our dataset. using the entire population of hospitals. it is important to restate one of our study’s strengths. and tens of thousands of patient and employee surveys. gives us confidence in these findings.

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e-mail. and values. adequate length of appointments. contract for care set by patient and physician 38 . or other relevant clinical information at the time of visits and/or calls (scheduled an unscheduled) Emotional Support High levels of trust between patients and physicians. education via information systems comprised of registries.Table 1. tests results. patients encouraged to add and clarify information concerning medical records. inclusion of family members Patient Education or Information Systems Underscores patients’ understanding of illness and treatment options. incorporation of electronic databases. effective communication practices between patients and physicians. needs. availability of same day appointments/walk-in appointments. computerbased guidance and communication systems. registries of patients by diagnosis or health risk. personalized longitudinal charts of risk factors. alternate means of communication with clinicians (telephone. availability of patients’ medical records. strategic coordination used to produce more physicianpatient time. off hours services. limited in office waiting time. routine use of electronic medical records Coordination of Care Use of interdisciplinary teams. etc. coordination of procedural processes related to patient referrals (both given and received). Internet. treatment decisions made jointly.). comfort with expressing fears and concerns. Five Patient Centered Care Dimensions Five Core Dimensions of PCC Description Ease with scheduling appointments. treatment reminders and alerts. publicly available information Access to Care Patient Engagement in Care Physicians openly share information and management options. clinician as “agent”. medical records Internet based and available everywhere. development of strong patient-physician relationships. decisions made considering patients’ perspectives.

56 5.073 76. Turnover intentions 7.055 6.89 1.05 *p<0.12 0. Descriptive Statistics and Correlations Mean S.916** 0. Patient ratings of care 4.66 0.14* -0.43 4.305** -0.66 1 2 3 4 5 6 72.358 2.378** -0.03 9. **p<0.370** -0. Errors & Near Misses 3.Patient ratings of respect & dignity 5.01 0.Emergency readmissions to hospital 2.D.314** 87.Table 2.11 -0.05.913 ** 39 . 1.352** 0.01 0. Patient centered care 71.364 ** ** 0.90 3.49 0.349** 0.57 -0.927** 0.

16*** 0.01 ***p<0.125 Turnover intentions R F F test Wald χ 2 LM test χ 2 Hausman test χ 2 N *p<0.05 **p<0.126 47.15*** 330 40 .37** 250 2 17.001 7.119 0.029 Errors & Near Misses Eq.Table 3.630*** 0.144 0.031 7.1 (pols) 0.96** 0.822*** -0.71 0.081** 0.2a (pols) Eq.2b (pols) -0.62 14.8*** 4. The Effects of Patient Centered Care on Quality of Care Outcomes Emergency Readmissions Patient-Centered-Care Eq.47 0.173 34.36*** 0.33*** 22.

654 2 0.Table 4.001 37.184 -0.846 292.744 *** 0.4b (re) 0.881 112.591 1.9 *** 447 5.01 ***p<0.22 *** 2.66 0. The Effects of Patient Centered Care on Patient Perceptions of Care Patient Ratings of Care Eq.638 *** 0.776 *** 0.05 **p<0.83 301.61 *** Hausman test χ N *p<0.37 0.4a (fe) Eq.49 *** 0.51 *** 0.053 Patient Centered Care Turnover intentions R F F test Wald χ 2 LM test χ 2 2 Patient Ratings of Respect & Dignity Eq.3a (fe) Eq.848 *** *** 1452 *** 19.22 *** 328 17.09 328 41 .34 *** 447 29.037 0.049 0.846 *** 0.3b (fe) 0.021 -1.01 *** 2.5 2.

002 Patient Centered Care R F F test Wald χ 2 LM test χ 2 2 2 0.Table 5.5 (re) -0.001 42 . The Effects of Patient Centered Care Employee Turnover Intentions Turnover Intentions Eq.05 **p<0.01 ***p<0.77 *** 39.128 31.52 N 328 *p<0.01 *** 0.55 *** Hausman test χ 2.

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