The effects of physicians on operational and financial performance in United States hospitals: staffing, human capital and knowledge spillovers

Purpose: The authors examine how physician staffing, human capital and knowledge spillovers are related to multiple dimensions of hospital operational and financial performance at the organizational level. Design/methodology/approach: The authors use a data set assembled from multiple sources for more than 1,300 US hospitals and employ hierarchical linear regression to test this study’s hypotheses. The authors use multiple quality, efficiency and financial measures of performance for these hospitals. Findings: The authors find that higher levels of staffing, skills and knowledge spillovers associated with physicians were positively associated with multiple dimensions of hospital performance. The authors find linear and nonlinear relationships between experience and performance, with the relationships primarily negative, and nonlinear relationships between spillovers and quality performance. Practical implications: Hospital managers should consider increasing physician staffing levels if possible. In addition, the overall Final MIPS Score from the Centers for Medicare and Medicaid Services might be included as a factor in determining which physicians practice in a hospital. Finally, if possible, encouraging physicians to practice at multiple hospitals will likely be beneficial to hospital performance. Originality/value: This study’s findings are original in that they explore how physician-specific staffing and human capital, which have received comparatively little attention in the literature, are related to several different dimensions of hospital-level operational and financial performance. To the best of the authors’ knowledge, this paper is also the first to examine the relationship between the construct of physician knowledge spillovers and hospital-level operational and financial performance.