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Performance Measurement and Compensation Practices in Hospitals: An Empirical Analysis in Consideration of Ownership Types

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  • Maik Lachmann
  • Rouven Trapp
  • Felix Wenger

Abstract

Against the background of regulatory initiatives that put hospitals under increasing financial pressure, we explore performance measurement and compensation practices in hospitals through a multiple case study. We extend previous research by comparing practices among different ownership types (i.e. public, non-profit, and private) and by providing initial evidence on compensation schemes for the clinical staff. Our empirical investigation is embedded in the ‘stewardship–agency axis’ that allows the development of theoretical arguments about the interdependencies between ownership and performance measurement systems (PMS). We distinguish two primary levels of analysis – the types of measures implemented and their linkage with compensation and decision-making. Our findings suggest that the types of measures are primarily affected by regulatory pressures, while powerful internal actors considerably influence the linkage between these measures and compensation. Consistent with our theorised patterns, cross-case analyses indicate differences between ownership types concerning the performance dimensions that are prioritised and the linkage of performance measures with compensation of the clinical staff. Together, these findings provide evidence on the interdependent effects of the regulatory environment, the type of ownership and internal actors on a hospital's PMS. We also provide some tentative explanations for these findings based on insights from institutional and behavioural theory.

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  • Maik Lachmann & Rouven Trapp & Felix Wenger, 2016. "Performance Measurement and Compensation Practices in Hospitals: An Empirical Analysis in Consideration of Ownership Types," European Accounting Review, Taylor & Francis Journals, vol. 25(4), pages 661-686, October.
    • Handle: RePEc:taf:euract:v:25:y:2016:i:4:p:661-686
    DOI: 10.1080/09638180.2014.994541
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    1. Magdalena Kludacz-Alessandri, 2016. "Non-financial dimensions of measurement and assessment in the performance model for hospitals," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 17(1), pages 93-121.

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