Taking Context More Seriously: Managerial Networking and Performance in American and Korean Hospitals

Abstract

While extensive literature on public management has suggested that management matters for performance, the role of national context in this mechanism has been significantly understudied. This article examines whether and how the impact of management on performance varies across national settings by conducting a comparative analysis of U.S. and Korean hospitals. Based on a parallel hospital manager survey and archival database in the two countries, we find that managerial networking contributes to performance in both U.S. and Korean hospitals, but its functional form varies between the two countries. These findings imply that management is the key to enhancing performance, but the effective strategy can vary depending on the national context. This study highlights the role of national context and advances the field of comparative public administration.

Keywords:

• comparative public administration
• healthcare
• managerial context
• managerial networking
• organizational performance

Acknowledgments

We thank Kenneth J. Meier and four anonymous reviewers for helpful comments and suggestions. We are also grateful to the participants of the Public Management Conference, Texas A&M University, May 20–21, 2016.

Notes

1 In addition to managers’ external management, the literature has emphasized the importance of internal management—that is “the coordination of people and resources in a structured setting to accomplish public objectives” (O’Toole & Meier, 2009, p. 503). Favero et al. (2016), for example, focus on key elements of internal management, such as setting challenging but feasible goals, building trust through credible commitments, providing feedback, and eliciting employee participation. By using New York City school data, they find that internal management matters in performance.

2 Following Aldrich (1979), Rainey defines homogeneity-heterogeneity as “the degree to which important components of the environment are similar or dissimilar” (2009, p. 95).

3 In addition to the Ministry of Health and Welfare, two additional institutions, the National Health Insurance Service (NHIS) and the Health Insurance Review & Assessment Service (HIRA) regulate and oversee hospitals while conducting reviews and assessment of medical fees in the Korean healthcare system.

4 It is worth mentioning that the number of foreign residents in South Korea has significantly increased, and foreigners, those who have lived in Korea over six months, can join the national health insurance and enjoy the benefits.

5 Based on the Medical Act, general hospitals in Korea are required to have more than 100 beds and seven specialties (for hospitals with 100–300 beds) or nine specialties (for hospitals with over 300 beds). Tertiary hospitals are highly specialized hospitals with more than 100 beds and 20 specialties.

6 In the original form of hospital evaluation, the highest grade was 1 and the lowest grade was 5. Since the lower number indicates the better performance, we reversed the values for easier interpretation.

7 It should be noted that the composition of the subdimensions differs depending on the individual diagnosis while a similar formula is used to create quality ratings. For example, the quality rating in pneumonia is measured by appropriate initial antibiotics, non-smoking education rate, and pneumonia bacteria vaccinate rate, whereas the quality rating in AMI (acute myocardial infarction) is measured by aspirin at discharge, PCI (percutaneous coronary intervention) within 90 minutes of arrival, prescription for a statin at discharge, and 30-day mortality of heart attack patients.

8 The Bureau of the Census report indicates that 52.8% of U.S. residents have private insurance, either employment-based or self-financed. Moreover, since the ACA requires uninsured residents to purchase private insurance through its established exchanges, interacting with insurance companies can be important for hospital managers to attract more clients under the specific health plans (Smith & Medalia, 2014).

9 It should be noted that survey responses were collected at different managerial levels in the U.S. and Korean contexts. While the top managers of U.S. hospitals were respondents, middle managers in Korean hospitals were asked to rate their top manager’s management. Although the job levels of respondents are different, both surveys measure top managers’ managerial practices using relatively identical questions. In addition, Korean middle managers who participated in the survey have worked in their current hospital more than ten years on average. This suggests that respondents are likely to have significant information about their top managers’ management as well as their organizations. The Korean hospital survey had two respondents, personnel manager and financial manager. We used the mean of the two managers to create the networking variable.

10 Some of the controls vary depending on context. For instance, staff capacity is measured by the ratio of skilled nurses to all nurses in the United States, while the variable is measured by the ratio of skilled doctors to all doctors in Korea. However, most controls have the same formula in both national settings.

11 In the United States, nurses can be categorized as either registered nurses (RNs) or licensed practical nurses (LPNs) based on their educational preparation. RNs complete an associate’s degree (ADN), a diploma program, or a baccalaureate degree (BSN), while LPNs complete a state-approved program. RNs have an expanded set of duties and supervise LPNs (Shi & Singh, 2019).

12 In Korea, patients have a choice between normal medical treatment service and premium medical treatment service. Premium medical services are provided by doctors with an established amount of experience or by professors in medical universities. Patients must pay an additional fee to use the premium services.

13 Although different regulation and insurance systems create different levels of market competition across countries, patients in both the United States and South Korea are able to shop around for healthcare to some extent. In the United States, patients can see any provider without a referral although the scope of provider markets can differ based on their insurance plan and insurance networks. Patients in Korea have universal access to healthcare based on a national insurance system, and this allows them to go to any hospitals they want.

14 As a robustness check, we considered other environmental factors such as urbanicity (urban vs. rural hospitals); the results remain the same for both the U.S. and Korean models.

Additional information

Notes on contributors

Miyeon Song

Miyeon Song is an assistant professor of public administration and policy at the University of South Carolina. Her research interests include public management, government performance, bureaucratic politics, and comparative public administration.

Ohbet Cheon

Ohbet Cheon is an assistant professor of healthcare management at David D. Reh School of Business, Clarkson University. Her research focuses on public management, performance management, health disparities, and policy instruments in health care services.

Young Han Chun

Young Han Chun is a professor of public administration in the Graduate School of Public Administration at Seoul National University. Much of his research focuses on topics regarding organization theory, public management, and policy instruments.