All ETDs from UAB

Advisory Committee Chair

Robert Weech-Maldonado

Advisory Committee Members

Carlos A Camargo, Jr

Stephen J O'Connor

Bisakha Sen

Jerry M Trimm

Document Type

Dissertation

Date of Award

2014

Degree Name by School

Doctor of Philosophy (PhD) School of Health Professions

Abstract

The dissertation examined the role of Freestanding Emergency Departments (FSEDs) in the current United State health care system. The study collected the primary data on FSEDs in the United States and analyzed the factors associated with the hospitals operating FSEDs and its effect on hospital financial performance. The relationship of presence of FSEDs in the market and Medicare expenditure per person was also studied. The Resource Dependency Theory was used to study the effect of market and organizational factors on the hospital decision to operate an FSED. Panel data from 2002 to 2011 was analyzed using logistic multivariate regression with year and state fixed effects, with standard error correction for clustering at hospital level. Partial evidence was found to support the hypothesis that environmental munificence and complexity were related to hospital's decision to operate an FSED. Organizational size, higher financial performance, and affiliation with hospital system were also significantly related to hospital operating FSEDs. Based on Transaction Cost Economic Theory, we hypothesized that hospitals may use FSED as a vertical integration strategy to lower transaction costs, and as a consequence increase their financial performance. The relationship between hospital operating FSED and financial performance was analyzed by market share as mediation factor. The results showed that the relationship between hospital operating FSEDs and financial performance, measured as operating margin, was positive and significant. The aforementioned relationship was partially mediated by market share. Finally, the presence of FSEDs in the market was found to be positive and significantly associated with the higher total Medicare expenditure per person.

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