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Factors affecting physician loyalty and exit: a longitudinal analysis of physician-hospital relationships.

The article examines forces that influence physicians to change the percentage of their admissions to a hospital (loyalty) and to cease admitting patients to a hospital altogether (exit). Because physicians are both members of a hospital and consumers of its services, their admitting patterns can be described using models of employee commitment and consumer buying behavior. We test several hypotheses drawn from these literatures using data on physician admissions at hospitals over a two-year period. Results indicate that admitting patterns are explained primarily by convenience and inertia process characteristic of consumer behavior. On the other hand, factors believed to influence organizational commitment (e.g., decision-making involvement, conflict, economic investments) have little effect on loyalty and exit. The findings question the utility of hospital strategies to improve the climate of physician-hospital relations, and suggest several qualifications for research on the commitment of professionals.

There has been a great deal of research interest in ways to develop close physician-hospital relationships. Scott (1982) and Shortell (1985) outlined different types of arrangements for structuring the work of professionals in organizations. Alexander, Morrisey, and Shortell (1986) and Burns, Andersen, and Shortell (1989, 1990) described the structural mechanisms used by hospitals to integrate or control physicians, or both, such as hospital-based positions, salaries, and managerial roles. Several surveys identified physicians' preferences for different hospital attributes in deciding where to admit their patients (Okorafor 1983; Sheldon 1986). Finally, industry consultants outlined various hospital strategies for "bonding" and joint-venturing with members of the medical staff (Health Care Advisory Board 1987).

Much of this research interest has been stimulated by the advent of prospective payment and increased competition for patients. As a result of these changes, physician and hospital incentives regarding length of stay, treatment costs, and even site of treatment are no longer similar (Glandon and Morrisey 1986). Physician-hospital interdependence has switched from a symbiotic to a competitive basis (Hawley 1950; Burns, Andersen, and Shortell 1990). In response, hospitals are seeking ways to control or influence their physicians' utilization behavior and to integrate them more closely into hospital affairs.

Recent evidence questions the benefits of greater physician-hospital integration, however. Alexander and Morrisey (1988) report that physician involvement in hospital administration fails to reduce hospital costs and may even increase them. Burns, Andersen, and Shortell (1990) find that such involvement also fails to improve physician satisfaction or reduce physician-hospital conflict.

This article seeks to extend the latter findings by examining the effects that closer physician-hospital relationships have had on the physician's continued utilization of the hospital. Specifically, this study examines whether or not greater social-psychological involvement in the hospital, measured by participation in decision making and low levels of physician-hospital conflict, promotes physician loyalty and reduces physician exit. As an alternative perspective, the article examines whether loyalty and exit influenced more by utilitarian considerations, measured by the physician's economic investments in the hospital and by the convenience of the facility. Prior research suggests that economic/convenience factors influence the selection of new hospital affiliations and the number of patients admitted over time (Wholey and Burns 1991). We develop several hypotheses for each of these perspective and evaluate them in multivariate, longitudinal models of physician loyalty and exit. We then interpret our findings in light of hospital efforts to promote close ties with physicians and recent research on organizational commitment.

Conceptualizing Physician Loyalty and Exit

Relationships between physicians and hospitals are conceptualized here as instances of individual-organization linkages in which individuals psychological and material inducements in exchange for their contributions of effort, that is, inducements-contributions contracts (March and Simon 1958). These psychological contracts are generally viewed as committing individuals to the relationships, evidenced by loyalty and continued membership in the organization (Northcraft and Neale 1990, 462; Allen and Meyer 1990; Oliver 1990).

The organization literature typically views loyalty and exit as the attitudinal and behavior components, respectively, of organizational commitments (see Mowday, Porter, and Steers 1982, Chapter 2). Attitudinal commitment involves a strong belief in the goals and values of the organization, a willingness to exert effort on the organization's behalf, and the intention to remain with the organization. Behavioral commitment involves the set of actions (e.g., low absenteeism and turnover) that behind individuals more closely to the organization. Behavioral commitment is strongly influenced by and, in turn, reinforces the degree of attitudinal commitment (Hulin, Roznowski, and Hachiya |985).

Several organizational researches (Kanter 1977; Salancik 1977; O'Reilly and Chatman 1986) argue that loyalty has a behavioral as well as an effective component that is reflected by the exertion of extra effort and historical fidelity. The marketing literature similarly defines loyalty in behavioral term as the consumer's continued preference for a firm's product over time (Guest 1944; Jacoby and Chestnut 1978).

The behavioral approach is particularly appropriate for studying physician loyalty. Physicians are at once members of the hospital and consumers of its services. The single largest group are solo practitioners who purchase hospital services on their patient's behalf. There is also a growing minority who occupy positions as salaried, hospital-based practitioners but who still admit patients. Hospital administrators typically view both sets of physicians as the primary market-the group that needs to be enticed to bring their business (admissions) to the institution. Physician loyalty may thus be akin to consumer loyalty, evidenced by brand (hospital) adherence and repeat purchasing (admitting) behavior.

This study models developed in both the organizational and the marketing literatures to explain physician behavior over time. Such models have been used only infrequently, to examine physicians' attitudinal commitment (Mercer, Hernandez, and Bilson 1985) and turnover (Mick, Sussman, Anderson Selling, et al. 1983).

The study measures the volume and share of each physician's admissions to hospitals in one country over a two-year period and investigates who related questions: (1) What influences physicians to change their loyalty to each hospital where they continue to practice? and (2) What influences physicians to exit a hospital altogether? Following Kanter (1977) and Guest (1944), loyalty is defined as behavioral fidelity to an organization, and is measured as the change over a two-year period in the percentage of the physician's admissions at each hospital utilized. Because a majority of physicians maintain and utilize admitting privileges at several hospitals, we examine whether physicians shift their practices between primary and secondary hospitals. Following Hirschman (1970) and Mick, Sussman, Anderson-Selling, et al. (1983), exit is defined as the behavioral expression of organizational dissatisfaction (voluntary turnover), and is measured as the complete cessation of admissions to a hospital and relocation of one's hospital practice elsewhere (Burns et al. 1990). Exit is thus an extreme form of declining loyalty. We have used this distinction to examine whether loyalty and exit are separate process (see Angle and Perry 1981).

Theoretical Perspective and Hypotheses

Two major approaches have bee used to explain commitment (see Morris and Sherman 1981; Stevens, Beyer, and Trice 1978). In the first approach, commitment is based on instrumental or utilitarian considerations for continued participation (e.g., prior investments in the organization, perceived constraints or cost to leaving it. In the second approach, commitment is based on social and psychological involvement in the organization (e.g., decision-making participation, organizational dependability, and conflict). For each approach, we outline the theoretical perspective and associated research findings; Table 1 summarized the specific hypotheses to be tested. [Tabular Data 1 Omitted]


Economic Investments and Dependence

According to Becker and Carper (1956), commitment results largely from prior investments in the organization and perceived constraints on leaving the organization. Such factors as an individual's age, organizational position, and mobility contribute to the development of "side bets" or accrued benefits that are forfeited when the individual leaves the organization (Becker 1960).

Hypothesis 1. Compared to young doctors, middle-aged physicians should be more loyalty and less likely to exit. Such physicians are likely to have greater tenure with hospital and greater perquisites (Stevens, Beyer, and Trice 1978; Glisson and Durick 1988); they also may enjoy fewer opportunities to acquire new training, credentials, and alternatives hospital privileges (March and Simon 1958; Hrebiniak and Alutto 1972; Angle and Perry 1981). Similar forces should lead elderly physicians (age 65 +) to remain loyal to the hospital in which they practice. Elderly physicians winding down their practices may be most likely to exit, however.

Hypothesis 2. Physicians accupying organizational positions as salaried, hospital-based practitioners should be more loyal and less likely to exit. Physicians frequently seek such positions because of increased competition from other doctors and concerns about income security. Researchers suggest that organizational position (e.g., job level) is often associated with higher pay, responsibility, and other |inducements' that elicit greater commitment (Sheldon 1971; Hrebiniak 1974). Hospitals often offer such positions in the hope of increasing physicians commitment and utilization of the institution.

Hypothesis 3. Physicians should be less loyal to a hospital and more likely to leave when they greater exit options. Exit options are a function of admitting privileges at alternative hospitals to which physicians can admit their patients (Burns, Andersen, and Shortell 1989). Greater job mobility decreases the individual's investments in the organization and the perceived cost of leaving it (March and Simon 1958).

Hypothesis 4. Physicians should exhibit greater loyalty and less exit behavior when they are more satisfied with the hospital. Satisfaction increases the individual's investment in the organization and lessens the desirability of leaving it (March and Simon 1958). Behavioral commitment may also be a joint product (i.e., interaction) of satisfaction and available exit options.

Hypothesis 5. Following March and Simon (1958), physicians should exhibit less loyalty and greater exit behavior when they are dissatisfied with the hospital and have several alternative hospitals to which they can admit patients. These two factors increase the utility of other, in-place job alternatives and thus the likelihood of exit (March and Simon 1958, 93; Mobley 1977). Research provides some support for the main effects of job alternatives and satisfaction (Rusbult et al. 1988; Withey and Cooper 1989) but less for their interactive effect on turnover (Hulin, Roznowski, and Hachiya 1985).

Convenience and Inertia

Convenience and inertia have been proposed as mechanisms explaining customer behavior in the economics and marketing literatures, respectively. They are consistent with an exchange framework that examines the utilization motives of physicians and the benefits they seek in exchange for their ongoing patronage of the hospital.

Hypothesis 6. Physicians are less loyal and more likely to exit from hospitals located farther away from their offices. Health economists argue that physicians are "income maximizing economic agents" who purchase hospital services in such a way to maximize their net income, productivity, and leisure time (Feldstein 1983, 219; Pauly and Redisch 1973). Physicians thus should gravitate to those hospitals that maximize their convenience and income by minimizing the time-costs of travel to treat their patients.(1)

Indeed, physicians typically mention in surveys that the hospital's location strongly influences their decision on where to admit patients (Sheldon 1986). Cross-sectional analyses of physicians' admitting patterns verify these reports. Burns, Wholey, and Huonker (1989) find that geographic proximity is a strong determinant, marking whether or not a physician utilized a hospital as well as the number and proportion of patients the physician admits to the hospital. Of course, their findings do not indicate whether (1) hospitals are popular because physicians are located near them, or (2) physicians locate their offices near popular hospitals, i.e., the hospitals where they want to admit (Dranove, White, and Wu 1989). They do find, however, that the effects of proximity are evident not only in the physicians' use of their primary hospital but in thee use of secondary hospitals as well. This latter result suggests that hospitals are popular because physicians' offices are nearby; since these hospitals are not the physician's first choice, it is likely that the physician locate his or her office nearby in order to use them.

Hypothesis 7. Physicians are more loyal and less likely to exit hospitals where they have admitted a high proportion of their patients in the prior year. Marketing studies of consumer loyalty emphasize the role of reinforcement (or inertia) in shaping purchasing behavior (Jacoby and Chestnut 1978; Jeuland 1979). These studied propose stimulus-response theories of habit formation to explain brand loyalty: the more often a behavior is reinforced (such as buying a specific product or admitting to a particular hospital), "the higher the inherent likelihood of repeating it, to the point of habitualization (stable loyalty toward a brand)" (Kahn and Meyer 1987). Research indicates that short-term reinforcement or inertia models explain repeat purchasing behavior for several classes of products (Massey, Montgomery, and Morrison 1970, Chapter 3; Kahn, Kalwani, and Morrison 1986). This finding leads to the next hypothesis.

Hypothesis 8. At the hospital level, physicians should exhibit greater loyalty and less likelihood of exit at the hospitals where they concentrated their practice in the prior year. Reinforcing processes, then, may also characterize the physician's aggregate pattern of admissions and hospital loyalties. The more physicians concentrate their practice among a handful of hospitals, the more likely they are to continue doing so.


Decision-Making Involvement

Researchers suggest that decision-making involvement builds organizational commitment. Salancik (1977) argues that participation increases the individual's felt responsibility toward the organization. Participation constitutes a |binding choice' in that it is explicit, irrevocable, volitional, and public. Steers (1977) suggests that decision-making involvement represents a socializing experience that promotes the formation of organizational attachments.

Hypothesis 9. Physicians should be more loyal and less likely to exit when they are involved in hospital governance.

Hypothesis 10. Physicians should be more loyal and less likely to exit when they are involved in hospital management. Mechanisms to increase physician participation in decision making include membership on the hospital board, membership on hospital committees, and assumption of managerial roles (Alexander, Morrisey, and Shortell 1986; Burns, Andersen, and Shortell 1989). Sheldon's (1986) survey of physicians indicates that governance and managerial participation may promote hospital loyalty. Mercer, Hernandez, and Bilson (1985) similarly report that participation in management activities increases attitudinal commitment toward the hospital.

Organizational Dependability and Conflict

Researchers also suggest that organizational dependability promotes commitment, while conflict weakens it (Hrebiniak 1974). Organizational dependability refers to the degree to which individuals perceive that their expectations and interests are being met by the organization (Buchanan 1974). Role conflict, on the other hand, involves a divergence of professional and organizational expectations concerning one's role activities. This discrepancy may threaten perceive professional independence, violate professional values, and increase the propensity to leave the organization (Rizzo, House, and Lirtzman 1970).

Hypothesis 11. Physicians who experience greater conflict with the hospital should be less loyal and more likely to exit. Physician conflict with the hospital can develop over the latter's perceived failure to satisfy professional expectations (e.g., concerning autonomy and discretion) and to cooperate with professional requests (e.g., concerning staffing and equipment). Such conflicts are likely to reduce physician commitment to the organization. In studies of group practices, Ross (1969) and Mick, Sussman, Anderson-Selling, et al. (1983) report that constraints on autonomy, conflict over practice arrangements (e.g., hours, coverage, duties), and relationship conflicts with the organization are major causes of physician turnover.

Description of the Study


This study was conducted in one urban county in the western United States between 1985 and 1987. At the beginning of this time period, the county contained over 600,000 residents served by 12 hospitals (3.9 beds per 1,000 population) operating at an average occupancy rate of 68 percent, and 1,367 physicians (228 physicians per 100,000 population).

The study analyzes changes in physician admitting behavior between July 1985 and July 1987. Sheldon (1986) suggests that 12 to 18 months is sufficient time for physicians to alter their hospital admitting patterns. Changes in admitting behavior are first described at the aggregate physician and hospital level. We then examine changes in each physician's pattern of admissions at each of the eight nonfederal general hospitals in the county used by the physician. The unit of analysis is thus the physician-hospital linkage.


Data used to construct the dependent measured (loyalty, exit) and several of the independent variables are collected by the state's Department of Health Services. These data identify the admitting physician, hospital, admission date, and discharge date for discharges from the eight nonfederal general hospitals in the county. Patient admissions are aggregated (summed) for each physician at each hospital for two time periods: July 1985-1986 and July 1986-1987. Aggregating over a complete year eliminates fluctuations in physician practices due to seasonal factors (e.g., an influx of tourists).

Within the first time period, we calculated the proportion of the physician's total admissions, or practice share, at each hospital (Hypothesis 7) and the Herfindahl index of concentration of the physician's admissions (Hypothesis 8). The Herfindahl index is the sum of the squared proportions of the physician's total admissions at each of the eight hospitals. We also calculated the physician's total hospital admissions in the first period and the change in total admissions between periods as control variables. Across the two time periods, we calculated the two dependent variables: physician loyalty (change in practice share at the hospital) and exit (cessation of admissions to the hospital). Loyalty is a continuous measure; exist is a binary indicator (1 = cessation, 0 = no cessation).

Data on the other independent and control variables are taken from a separate survey of the same physicians conducted in 1985 (see Burns, Andersen, and Shortell 1989, 1990, for a full description). Of the 1,367 physicians in the county, 737 (55 percent) responded to the survey. Of these, 121 physicians had moved, retired, or not engaged in patient care activities during the previous year and were excluded. We excluded an additional 33 physicians who practiced in federal hospitals and 68 physicians who admitted no patients (e.g., radiologists, anesthesiologists, pathologists), yielding a sample size of 515 for the analyses. The vast majority of these physicians provided information on decision-making involvement, satisfaction, and conflict for both their primary and secondary hospital affiliations (969 total physician-hospital linkages). There was no evidence of response bias based on sex or specialty, with the exception of a high response by pediatricians.(2)

Physician age was initially measured in the survey questionnaire by a trichotomous scale (under 45, 45-64, 65 and over). We test Hypothesis 1 using two dummy variables, one for middle-aged (45-64) and one for elderly (65 +) physicians. We also include dummy variables for physician gender (1 = female) and four specialties as statistical controls (surgery, internal medicine, obstetrics/gynecology, and pediatrics; generally/family practitioners are the excluded contrast); no specific effects are hypothesized. Previous evidence suggest that their effects on loyalty and exit are mediated by other variable specified in the model, such as practice setting and number of hospital privileges (Burns, Andersen, and Shortell 1990).

To assess the effect or organizational position, the survey asked physicians whether their practice was primarily solo, group, HMO, or hospital based. Eleven percent of physicians indicated that they were hospital-based practitioners. Analyses of the discharge data revealed that over half admitted patients to more than one hospital and, thus, were appropriate to include in a study of loyalty and exit Hypothesis 2 is tested using a dummy variable for hospital-based practitioner. Dummy variables denoting group and HMO practice settings are included as controls (solo practice is the excluded contrast). To assess the availability of alternative hospitals (exit options), the survey asked physicians to indicate the hospitals where they had privileges. We test Hypothesis 3 using a continuous measure of the number of hospital privileges.

Hospital convenience (Hypothesis 6) is measured here in terms of the geographic distance from the physician's office to each of the eight hospitals, using office addresses supplied by the state medical association. Two additional hospital measure are included as controls: the number of hospital beds and a dummy variable denoting private ownership (1 = nonprofit and investor-owned; public ownership is the excluded contrast). According to Pauly and Redisch (1973), size and ownership reflect convenience factors such as the range of available facilities and the potential for physician control of hospital resources. These are identified using the AHA's Annual Guide (American Hospital Association 1986).

The survey also asked physicians to describe their decision-making involvement, satisfaction, and conflict experienced at their primary and secondary hospitals (i.e., where they admitted the greatest and second-greatest number of patients). While these measures are available for only two of the eight hospitals a physician might use, these two linkages account for nearly all of a physician's total hospital admissions. With regard to decision-making involvement, we constructed two dummy variables indicating membership on the hospital's board of directors and/or executive committee (Hypothesis 9: governance involvement), and on the hospital's quality assurance and/or utilization review committees (Hypothesis 10: managerial involvement). Physician satisfaction (Hypothesis 4 and 5) and physician-hospital conflict (Hypothesis 11) are derived from 50 survey terms, which yielded one index of satisfaction and ten indexes of conflict over various issues (see Burns, Andersen, and Shortell 1990 for a description of the items and their loadings on the various issues). The satisfaction measure is a continuous scale; the conflict measures are dummy variables indicating the presence of conflict experienced over that issue.


We use least-squares multiple regression to examine physician loyalty and logistic regression to study physician exit. One problem arises because not every physician admits to all eight hospitals. The discharge data include 935 physicians who do admit to the eight nonfederal general hospitals in the county, yielding a total of 7,480 potential physician-hospital linkages. The vast majority of physicians, however, admit to only two or three hospitals. Strategies that include or exclude cases (linkages) where a physician does not admit introduce bias into the estimates (Berk 1983; Maddala 1983). We corrected for this bias using a two-step procedure (Berk 1983). First, we regressed a binary variable indicating utilization of the hospital on the independent and control variables using a profit model and the full sample.(3) Predicted values from the probit are used to calculate a hazard rate for every physician-hospital linkage. The hazard rate is [[Lambda].sub.ij] = [f([z.sub.ij]) / (1 - F([s.sub.ij]) where Zij is the opposite of the predicted value from the profit, f is the normal probability density function, and F is the cumulative normal probability density function. This hazard rate measures the likelihood that a physician-hospital linkage will not be observed and thus will be discarded in the analyses. Second, we excluded all cases where no linkage was observed and included [Lambda] ij in the estimated regression models as a selection term (Lambda) to correct for the bias caused by the exclusion.



Table 2 provides an aggregate description of physician admitting patterns to the eight hospitals, along with a profile of the bed size and ownership of these hospitals. The admitting patterns are described in terms of the total number of admissions by all physicians to that hospital and the average share of all physician's practices at that hospital. These aggregate data are further classified by time period (1985-1986, 1986-1987) and by whether or not the hospital is the physician's primary facility. [Tabular Data 2 Omitted]

The data indicate great variation among hospitals in the percentage of their total admissions accounted for by physicians using the hospital as their primary facility. Primary affiliations supply a greater percentage of a hospital's admissions among the larger-sized and public hospitals. There is also some indication that physician loyalty is greater in these facilities.

Overall, physicians appear to heavily concentrated their admissions at one hospital. The share of the physician's admissions at his or her primary facility ranges from .72 tot .95, but only from .08 to .16 at secondary hospitals. Thus, in terms of their hospital practice, physicians behave more as members of a single hospital than as consumers of several hospitals. While physicians may retain and even use admitting privileges at several hospitals, they tend to be quite reliant on one hospital.

Table 3 presents the univariate statistics for the independent and dependent variables.[4] In support of the foregoing assertions, these data indicate that physicians tend to have privileges at an average of four hospitals but heavily concentrate their admissions (mean Herfindahl index = .651). While the share of the physician's admissions appears much lower (mean = .352), this figure represents the average physician loyalty across all hospitals used.

The means for the dependent variables in Table 3 indicate a small rise in physician loyalty (1.3 percent increase in practice share) and a sizable rate of exit (termination of 13.4 percent of hospital affiliations) across the two time periods. The exit rate is much higher than the 3-9 percent turnover figures reported among group practice physicians (Ross 1969; Konrad et al. 1976; Mick, Sussman, Anderson-Spelling, et al. 1983). Such comparisons are misleading, however, since physicians admit to more than one hospital but typically belong to only one group practice. The 13.4 percent exit rate suggests that physicians are concentrating their admissions in a smaller number of hospitals. Such a claim is bolstered by the fact the termination of hospital affiliations greatly exceeds the initiation of new affiliations (4.5 percent). [Tabular Data 3 Omitted]


The first column in Table 4 presents estimates from the least-squares regression of the independent and control variables on physician loyalty; only the effects of the independent variables are presented. The results suggest that convenience and inertia factors are important determinants of loyalty. Consistent with our expectations regarding convenience, physicians in offices located father away (Hypothesis 6) exhibit significantly lower hospital loyalty. Consistent with our expectations regarding inertia, physician loyalty is greater among physicians who concentrate their hospital practice (Hypothesis 8). The negative effect of the physician's share of admissions at the hospital during the prior year is opposite our prediction (Hypothesis 7).

Further analyses nevertheless provide some support for Hypothesis 7. Practice share exerts a significant positive effect (p < .01) on loyalty when we control for the interaction of practice concentration and practice share. The interaction term is also significant (p < .01) and exhibits a negative sign. Physicians with concentrated practices display low loyalty (i.e., a drop in practice share during period 2) toward hospitals where they admitted a high share of their patients in period 1, and high loyalty (i.e., a rise in practice share during period 2) toward hospitals with a low share of their patients in period 1. To explain this interaction, we examined physicians with high practice concentration (67 percent or more) and extreme practice shares (high share = 80 percent or more, low share = 5 percent or less) in period 1. A handful of these physicians (N = 12) account for both the highest and the lowest loyalty scores: the practice share of their primary hospital falls while the share of their secondary hospitals rises. That is, they switch loyalties (admissions) from the primary to the secondary hospital. While we cannot identify the reasons for shifting loyalties among all 12 physicians, 5 of the 12 belong to HMOs while the remainder are evenly distributed across the other practice settings. This suggests that changing hospital-HMO contractual relationships may partially explain the sudden dramatic shifts in loyalty observed among these physicians.

Investment factors exert little effect on loyalty. With the exception of practice setting, none of the effects is even marginally significant (p < .10). Moreover, the consequence of hospital-based practice on loyalty is negative, contrary to Hypothesis 2. The direction of the remaining effects also exhibits several inconsistencies. First, middle-aged physicians appear less loyal than younger physicians, while the elderly physicians appear more loyal. Second, the number of hospitals at which the physician has admitting privileges exerts a positive impact on loyalty, contrary to Hypothesis 3. Third, both satisfaction and the interaction term [dissatisfaction time the number of privileges (exit options)] positively affect loyalty.

Finally, none of the social-psychological involvement measures exerts a significant effect on loyalty. The effect of governance involvement is positive, as expected, while managerial involvement has no bearing at all. The ten conflict measures are nearly evenly split in terms of positive and negative effects on loyalty; none are significant.

Of course, the effects of our independent variables may be confounded by the presence of both primary and secondary hospital affiliations in the sample. We controlled for this possibility by including a dummy variable indicating primary hospital affiliation in the multiple regression model. The new model does not alter the pattern of effects observed in Table 4 ([R.sup.2] = .117). The effect of primary affiliation exerts a strong, positive impact on hospital loyalty (results not presented).


We next used logistic regression techniques to estimate the effects of the independent and control variables on physician exit. The results from the regression analysis are presented in the second column of Table 4. Once again, the convenience and inertia factors appear to be important determinants of commitment. In support of Hypothesis 6, physicians are more likely to terminate their admissions to hospitals located farther away from their offices. In support of Hypothesis 7, physicians are less likely to exit hospitals where they admitted a larger share of their patients in the prior year. Hypothesis 8 suggested that physicians are also less likely to terminate their admissions when their hospital practices are concentrated; we observe just the opposite effect. Additional analyses again reveal a significant interaction effect (p < .01) of practice share and concentration on exit. Physicians with highly concentrated practices are more likely to terminate their admissions to hospitals that are only marginally used (average practice share = 10 percent). [Tabular Data 4 Omitted]

There is much less support for the effects of investment on physician exit. Of the first five hypotheses, only Hypothesis 1 is partially supported. Middle-aged physicians are less likely than younger physicians to terminate admissions to a hospital. Although insignificant, several other coefficients are in the expected direction. Elderly physicians are more likely to exit (Hypothesis 1), while hospital-based practitioners (Hypothesis 2) and satisfied physicians (Hypothesis 4) are less likely to exit. The coefficients for the remaining investment effects are small and in the wrong direction.

There is also little support for the hypothesized effects of social-psychological involvement. Both measures of decision-making participation exhibit insignificant effects (Hypotheses 9 and 10). Only the effect of managerial involvement is in the expected direction. Of the ten measures of conflict, only one exerts a marginally significant (p < .10), positive effect on exit (Hypothesis 11). Physicians who experience conflict over the hospital's support of quality care are more likely to terminate their admissions to the facility.


We have examined physician commitment to hospitals over time using two behavioral measures: practice loyalty and exit. We have attempted to explain the variation among physicians in their behavioral commitment from perspective suggested by the health care and organizational literatures. There is no evidence that the behavioral commitment of physicians to the hospitals they utilize is determined by either of the two major approaches used to explain employee commitment: the investment or economic side-bet approach (Becker 1960; Becker and Carper 1956), and the social-psychological involvement approach (Stevens, Beyer, and Trice 1978). Instead, the evidence suggests that physician commitment is explained best by a different set of utilitarian or instrumental criteria not usually studied by organization researchers: convenience and inertia.

The negative effect of office distance on loyalty and the positive effect on exit suggests that physicians are motivated largely by convenience or time. Longer travel distance to the hospital means fewer patients seen and thus lower income. The positive effect on loyalty of practice share and concentration suggests that they are also strongly subject to inertia. The high autocorrelations among our admitting variables (number of admissions to the hospital, r = .92; share of admissions at the hospital, r = .83) supports the view that physicians repeat their admitting patterns from year to year.

It is likely that convenience factors reinforce the effects of inertia. The convenience of seeing most of one's patients in a single hospital located near one's office may make the status quo quite attractive to a physician. Indeed, maintaining the status quo may be much more important than using exit or declining loyalty to signal any dissatisfactions to hospital administration (Hirschman 1970; Rusbult et al. 1988). This would explain why the conflict measures do not heavily influence physician loyalty or exit.

These findings are both somewhat expected and somewhat surprising. On the one hand, given their training and socialization, we might expect physicians' loyalty to be influenced less by organizational factors (such as decision-making involvement or role conflict) and more by such factors as time and convenience. We might also expect their loyalty to be affected by additional professional considerations not measured here (e.g., the location of referral networks, patient preferences, and financial incentives provided by the hospital). On the other hand, given their heavy reliance on one hospital, we might expect the behavior of physicians to parallel that of other employees. Our data indicate that physicians act like full-time employees in terms of sending the vast majority of their patients to one hospital and exhibiting modest turnover rates (13.4 percent in our study). However, factors found previously to influence commitment exert no significant effects here. Our findings thus suggest that physicians utilize hospitals not as loyal employees but as loyal consumers purchasing services on their own (or their patients') behalf.

We recognize that our study, and hence its conclusions, are subject to several limitations. First, we have examined primarily fee-for-service physicians rather than salaried hospital medical staff. Second, we have studied physicians in only one county of the country. Third, we have examined only two years of admitting data. Given the high reliance of physicians on one hospital and the effects of inertia, several more years of data may be needed to observe the behavioral components of commitment we are interested in. Longer-term data are also needed to observe changes in physician office location (hospital proximity) and the effect of these changes on physician loyalty. Fourth, we have not included measures of attitudinal commitment, which may be an important intervening variable between our independent and dependent variables (Hulin, Roznowski, and Hachiya 1985.

Our results nevertheless bear some sober implications for hospital efforts to improve the climate of physician-hospital relationships. Strategies to improve physician satisfaction or to reduce tensions with the medical staff, or both, may not be successful in terms of increased admissions. Physicians with greater levels of social-psychological commitment to a hospital in terms of admitting patients, or even to remain loyal to that hospital in terms of admitting patients, or even to remain with the hospital. Administrators desiring greater admissions through improved physician-hospital relationships may wish to focus instead on programs that increase convenience to the physician and save the physician's time. Such programs should begin by encouraging physicians new to the community to locate their offices near the hospital.

We do not mean to suggest, of course, that the climate of physician-hospital relationships is unimportant. Poor relations with physicians may involve significant externalities, such as lower morale and higher turnover among nurses. Poor relations may also affect the hospital's ability to attract new physicians and new sources of admissions. Finally, poor relation may harm physician-hospital communication and the quality of joint decision making.

Our results also suggest some reservations about current research on organizational commitment, and some possible modifications. First, they suggest that models of employee commitment may be less applicable to professionals than to other workers. Researchers studying the commitment of such professionals as doctors, lawyers, and scientists may wish to consider the utility of other perspectives offered by economics and marketing in developing their hypotheses. These perspectives may be more appropriate for analyzing the loyalty of independent consultants. Second, models of employee commitment may apply less to the behavioral than to the attitudinal components of professional loyalty. Attitudinal studies of physicians have yielded support for some of the hypotheses not substantiated here (Mercer, Hernandez, and Bilson 1985). Third, contrary to Angle and Perry (1981), our findings suggest that both exit and practice loyalty are influenced by convenience and inertia. Among professionals, exit and loyalty may be more similar processes than among employee groups.


(1)Additional factors that increase hospital convenience for physicians include

the range of hospital services, the availability of subspecialists on staff, and the quality of hospital personnel (Mercer, Hernandez, and Bilson 1985). The effects of these factors on physician commitment are partially controlled in the model by hospital bed size and ownership variables (see "Data Sources and Measures"). They are not tested as formal hypotheses due to a lack of adequate measures and the small number of hospitals, which limits the number of hospital-level variables that can be specified in the models. Other determinants of a physician's admitting patterns, such as the patient's time-costs of travel and the cost of hospital care (Luft, Garnick, Mark, et al. 1990), are not tested for similar reasons. (2)The different response rates by specialty introduce bias to the extent that certain specialties are less loyal or more likely to exit. Analyzes of variance revealed no differences across specialties in terms of change in practice share (F = .21, p > .95) or physician exit (F = 1.05, p > .39). (3)The predictors in the model include physician age, sex, dummy variables for the different specialties and practice settings, number of privileges, office distance, hospital bed size, and ownership. The sample included all physicians who admitted patients in the two time periods. (4)Descriptive statistics for the control variables and correlations among many of the independent and control variables are presented elsewhere (Burns, Andersen, and Shortell 1990: Table 3). A full correlation matrix is available from the first author; there were few problems of multicollinearity (average absolute r = .09).


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Author:Burns, Lawton R.; Wholey, Douglas R.
Publication:Health Services Research
Date:Apr 1, 1992
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