Market Orientation in Hospital Cardiac Diagnostic Units

Introduction and Study Purpose

The costs to national economies of providing health care are considerable and have been growing at a rapidly increasing rate. This trend has been the cause of major concerns in both developed and developing countries. Some of this concern is based upon the lack of any consistent evidence to indicate that more spending on healthcare produces better health. Delivering timely and quality healthcare services requires an understanding of the driving forces behind consumer choices in selecting healthcare providers. It has been said that although the health status of individuals varies across communities, there is some relationship between a person's health status, health beliefs, attitudes, values, and behaviors.

The health care system in Hamilton, Ontario, today is in a state of technological and organizational change. The cost and quality of health care have emerged as major concerns for the health profession and the public alike. Variations in medical practice, rapid diffusion of new technologies, increasing costs of health care, and different approaches for influencing the practice of medicine — all aimed at improving quality of care and controlling costs — have had a high impact on healthcare processes. Significant deterioration in hospitals' financial positions in recent years has been precipitated by changes in managed care and pressures to create more efficient processes for the delivery of care. Costs associated with both shorter and longer inpatient hospital stays have increased. During this period, employees, managers, and customers of these organizations are experiencing the turmoil of consolidation, as well as the introduction of new services delivered by recently merged hospitals.

In this context, Hamilton Health Sciences (HHS) is struggling with lower budgets and heavier workloads. The hospitals need people who can help do more with less. It is believed that non-profit hospitals are doing some of the most important work in our society, but they can only go so far without proper funding. This study examines the effects of market orientation on customer satisfaction and the effect of employees' and managers' satisfaction on service quality at the Medical Diagnostic Units (MDUs) at Hamilton Health Sciences. The study asks whether there is a relationship between customer-focused employees and satisfied employees, whether employees' satisfaction and service quality are related, and what the relationship is between managers' and employees' perceptions of these issues.

While the priorities for any given healthcare organization will vary from region to region or country to country, improving the quality of service delivery to both internal and external customers will improve its productivity and competitive edge. Germain and Spears point out that the healthcare industry is struggling ". . . against the problems caused by reduced funding, fewer resources, higher public expectations and low staff morale; finding ways to achieve and maintain quality standards has become an important issue" (2001, p. 2).

Therefore, the purpose of this study is to explore the antecedents and processes that could determine successful implementation of market orientation within the Medical Cardiac Units at HHS — and particularly the Medical Cardiac Unit at the Hamilton General Hospital (HGH) — and to identify needs and opportunities and then seek to meet them. Particular attention is given to identifying (1) the market-oriented behaviors of individual managers, and (2) the commitment of managers to the application of market-driven strategies.

This study focuses on patient-contact employees of the MDUs at Hamilton Health Sciences. The intent is to encourage training in market-oriented concepts and to create an atmosphere of customer satisfaction. The results of the study could help to improve the relationship between employees' and managers' market orientation and employees' satisfaction at the relevant units. The surveys could help the corporation determine whether managers and subordinates are market-oriented and what levels of satisfaction managers, subordinates, and customers hold. This study is also meant to assist hospital administrators in determining whether devoting resources to developing a market orientation helps to improve overall hospital performance.

This study is comprised of fourteen chapters. In investigating the administrative direction of a cardiac department, the aim is to determine whether an MDU (medical diagnostic cardiac unit) could represent a viable future employment choice for health administration personnel and whether it constitutes a "time-constrained" healthcare marketplace for them. As defined in the relevant literature, "the medical cardiac diagnostic units provide specialized services to patients requiring diagnostic testing of the cardiac and vascular systems." The testing provides physicians in practice — including internists, surgeons, and cardiologists — with information relevant to the patient's diagnosis, prognosis, and surgical risk.

The objective of the proposed study is to review the major factors that identify the current market orientation for the administration of a Medical Diagnostic Non-Invasive Cardiac Unit. Specifically:

The first objective is to determine whether working in an environment that is ideal for increasing clinical, managerial, and cardiac knowledge is feasible. The second is to determine whether people working in a cardiac environment are truly satisfied with the cardiac procedures and the internal and external relations between management style and the personnel responsible for the daily scanning and interaction with patients. The third is to assess whether patients (customers) are satisfied with their treatments and their interactions with technologists. The fourth is to help managers improve their units by identifying ways for sustainable change through innovative continuous quality improvement and different approaches to diagnostic and care delivery that relate directly to employee market orientation. The fifth objective is to broaden knowledge and positioning in the health care field as a hospital, clinic, or departmental administrator.

HHS is a corporation with approximately 8,500 health care workers and 1,500 physicians. HHS offers a full range of acute and non-acute clinical programs and is one of the largest comprehensive academic health sciences centers in the country. The corporation consists of an operational division serving a large patient population in the south-central region. The hospitals are part of tertiary regional programs that include burns, cardiovascular, pediatrics, neuroscience, oncology, and trauma care, and they provide health care to a population base of more than 2 million people.

HHS had operating deficits of $40 million in 1999–2000 and $16 million in 2000–2001, but government funding was provided as a one-time grant to cover those deficits. The projected operating deficit was close to $10 million for the 2001–2002 fiscal year and $35 million if the hospitals were not funded in the following fiscal year (HHS CFO financial data). "The impact of an aging population and the prospects of service utilization increasing as time progresses, in the face of a shrinking funding base," will create further deficits, according to HHS reports from April 2000. While government funding decreased, the number of patients treated at HHS increased and the number of medical professionals decreased, which has created brutally increased workloads and more rapid staff turnover. Therefore, the hospitals are seriously looking to consolidate services to make better use of resources.

The Medical Diagnostic Unit at the HGH is a busy department located on the second floor of the hospital. A team of 15 technicians serves all in-patients and out-patients. Services include: basic electrocardiography, 12- and 15-lead EKG, echocardiography, stress echocardiography, 24-hour Holter monitoring, treadmill stress tests, electrophysiology studies, and vascular ultrasound. The unit serves patients with pacemakers; cardiologists, general internists, and technicians under physician supervision conduct stress tests. Interpretation of these various tests is carried out by the hospital's cardiologists and internists. The unit also provides electroencephalograph tests for patients with seizure disorders.

Organizational Overview and Scope

The four MDUs at the corporation were consolidated into one department — the Medical Imaging Department — in January 2001, but in May 2001 they became four separate cardiac diagnostic units again, now under four managers and the direction of a director of the cardiovascular program. One reason for the earlier consolidation was that a significant redesign, restructuring, and reorganization was needed. Fiscal recovery and the consolidation of resources to improve care are among the MDUs' short- and long-term goals; base funding will therefore be required to achieve financial recovery.

Teaching MDUs like those at HHS face significant challenges beyond providing high-quality and varied tests. These include delivering advanced health care services, enhancing education and research, simplifying decision-making, improving efficiencies, and dealing with fiscal realities. Services at the HHS MDUs are not planned for elimination but rather to be made more efficient through improved discharge planning, more efficient patient flow, increased training and skills, and more effective clinical and technological test-taking.

The MDU used as a sample for this research project accepts approximately 3,588 patients per year in the Echocardiography laboratory, 37,856 in Electrocardiography, 1,633 in Holter Monitoring, 2,839 in Stress Testing, and 16,102 in a diversity of cardiac and related non-cardiac diagnostic tests — for a total of 62,018 tests at this particular unit. The four units at the corporation perform approximately 167,489 invasive and non-invasive cardiovascular tests (including a small number of neurology tests) per year.

The MDU is a key element for the development of cardiac investigation and diagnosis of cardiac disease and cardiac pathologies. The MDU medical market is currently directed by technical personnel with a technical approach to management. The people who direct these units have worked in related areas of expertise before being promoted from technical and nursing ranks to management. Decreasing funds and budgets have created a need for a better business-medical type of direction. It is especially difficult to deal with the scarcity of resources — outdated equipment, instruments, and other physical resources.

The MDUs rely heavily on inpatient referrals from hospital-area physicians and third-party referral sources, and many forces are currently affecting their referral patterns. The movement of care from inpatient to outpatient settings, and from nursing homes to home care, is affecting the effectiveness and accessibility of services, particularly for persons with chronic conditions. The factors that influence access to cardiac diagnostic services are socioeconomic, cultural, geographic, and health-related (many MDU patients have physical limitations and need support in accessing services).

The reality is that competition for patient market share is conducted more openly, more aggressively, and in a more integrated manner than ever before. "The changes occurring in the department's external environment directly influence its internal operations." The future direction of this type of department will require well-prepared personnel. One way to measure the performance of cardiac managers could be attributed to the following specific criteria: growth in revenue (funding), percent of revenue, return on capital, quality of service, new service and facilities improvement, and control of operational expenses.

The medical diagnostic markets are expected to continue showing strong growth because of increasing consumer demands, particularly in the medical cardiac imaging and vascular studies areas. The non-invasive cardiac diagnostic test of echocardiography is one of the fastest-growing cardiac diagnostic techniques, followed by nuclear cardiac medicine and other non-invasive tests such as electrocardiography, Holter monitoring, and stress testing. As these tests become more popular — driven by the aging population — the demand for quality patient services will become ever more pressing.

The purpose of the study is to examine the relationship between market orientation and employees' satisfaction, and the relationship between employee satisfaction and service quality in not-for-profit medical diagnostic units. MDU inclusion was based on the willingness of directors, managers, patients, and staff to participate and on the participation of the MDUs at the respective hospitals.

The traditional approaches to understanding the economics of a healthcare organization involve analyses of efficiency and effectiveness related to goods, money, and services, "where maximum satisfaction related to need or want is the outcome" (Turkel & Ray, 2000, p. 310). This "invisible hand" in the healthcare marketplace has created new structures that have significantly impacted the provision of quality and timely healthcare. By studying these processes in terms of the driving forces behind them, and by recognizing that change is the only constant, healthcare professionals will be better positioned to take advantage of opportunities rather than being lost in a sea of misinformation and confusion (Turkel & Ray, 2000, p. 311).

Previous researchers on market orientation — such as Narver and Slater (1990), who worked with subjective measures of performance as the dependent variables, and Jaworski and Kohli (1991), who worked with subjective measures of "overall performance" but not objective measures — both found that a strong market orientation is an important determinant of organizational performance. The methodology used in this study is similar to the Narver and Slater (1990) study in that data were obtained from a single organization. One important difference is the number of units examined: Narver and Slater (1990) contained 140 business units, whereas the corporation examined here has four MDU units in total. Kohli and Jaworski (1990) suggest that market orientation affords benefits to employees and that there is a positive relationship between a firm's market orientation and customer satisfaction. Kohli and Jaworski (1993) found that the market orientation of a business is an important determinant of its performance.

This study uses a survey approach to identify opportunities for improving healthcare delivery services and patient satisfaction with the objective of improving patient care and treatment outcomes. The survey instrument was crafted based on a critical review of the relevant literature. Wood and Ellis (2003) identified the following as important outcomes of a well-conducted literature review:

It helps describe a topic of interest and refine either research questions or directions in which to look. It presents a clear description and evaluation of the theories and concepts that have informed research into the topic of interest. It clarifies the relationship to previous research and highlights where new research may contribute by identifying research possibilities which have been overlooked so far in the literature. It provides insights into the topic of interest that are both methodological and substantive. It demonstrates powers of critical analysis by, for instance, exposing taken-for-granted assumptions underpinning previous research and identifying the possibilities of replacing them with alternative assumptions. It justifies any new research through a coherent critique of what has gone before and demonstrates why new research is both timely and important.

The survey approach was selected as the appropriate and most cost-effective method of collecting the information needed for the research, as it provides the ability to collect "yes/no" responses, Likert-scale answers, and open-ended answers for respondent comments, insights, and recommendations. Some advantages of this method include the ability to collect a variety of information types through a single survey form, the low cost of the survey method, and the likelihood of receiving substantive feedback in an anonymous setting. Some disadvantages include the inability to perform one-on-one interviews and the relatively small sampling involved in the survey.

The anticipated number of responses will likely be fewer than 20, and a representative sampling of at least 100 would be preferred to provide a better statistical basis; however, all surveys received will be included in the data analysis to produce meaningful results, as well as narrative responses to the open-ended questions. The literature consistently shows that for random samples, the larger the sample, the more reliable it is for estimating quantities such as means or proportions for the population (Leedy, 1993).

Methodology and Research Design

The study is classified as a qualitative-quantitative type of research because both quantifiable and subjective assessments are involved as measures of individual and group action. According to Leedy (1993), "The descriptive survey method, or as it is sometimes called, the normative survey method, is appropriate for data derived from simple observational situations, whether these are actually physically observed or observed through the benefit of questionnaire or poll techniques" (p. 122).

Internal consistency, or reliability, of the proposed survey form was obtained from volunteers in class and family members who provided feedback to ensure that the survey form collected the type of information it was designed to collect (face validity), that it was easily understood by a wide range of people, and that sufficient space was provided for open-ended answers.

David S. Walonick identifies six common ways to get information: "literature searches, talking with people, focus groups, personal interviews, telephone surveys, and mail surveys. . . . Mail surveys are a cost-effective method of gathering information. They are ideal for large sample sizes, or when the sample comes from a wide geographic area. . . . Because there is no interviewer, there is no possibility of interviewer bias. The main disadvantage is the inability to probe respondents for more detailed information" (Walonick, 2000, p. 2).

Most problems with survey analysis can be traced back to the design phase of the project. Walonick points out that having well-defined goals is the best way to ensure a good survey design. "As a general rule, with only a few exceptions, long surveys get less response than short ones. Keep your survey short. In fact, the shorter the better. Response rate is the single most important indicator of how much confidence you can place in the results. . . . One of the most effective methods of maximizing response is to shorten the questionnaire" (Walonick, 2000, p. 5). Other tips for improving the response rate to mailed surveys include making the envelope unique, providing a well-written cover letter, and giving the survey a title that is short and meaningful to the respondent.

Other advantages to the survey approach include cost effectiveness compared to face-to-face interviews, particularly for studies involving large sample sizes and large geographic areas. "Written questionnaires become even more cost effective as the number of research questions increases. Questionnaires are easy to analyze. Data entry and tabulation for nearly all surveys can be easily done with many computer software packages" (Walonick, 2000, p. 6). Furthermore, most people are familiar with surveys, the researcher's own opinions will not influence respondents, and there are no verbal or visual clues to influence answers. Surveys are also less intrusive than telephone or face-to-face methods, allowing respondents to complete the questionnaire at their own pace.

However, one of the major disadvantages of written surveys is the potential for low response rates. "Low response is the curse of statistical analysis. It can dramatically lower our confidence in the results. Response rates vary widely from one questionnaire to another (10 percent–90 percent); however, well-designed studies consistently produce high response rates" (Walonick, 2000, p. 7). A useful tool for improving the response rate is the use of follow-ups or reminders. "Traditionally, between 10 and 60 percent of those sent questionnaires respond without follow-up reminders. These rates are too low to yield confident results, so the need to follow up on nonrespondents is clear" (Walonick, 2000, p. 7). Researchers can improve response rates through follow-up attempts by including another copy of the survey instrument. The most successful follow-ups have been achieved by phone calls (postcards resulted in only an average 3.5 percent increase in response rate) (Walonick, 2000).

The role of qualitative research is to tell you why; quantitative research tells you how many. These research methods are fundamentally different, as are the answers they provide. If the goal is to improve a product or service, identify market segments, or develop a persuasive message, then qualitative research is appropriate. If the task is to determine how many people like an idea or measure the size of a market, then quantitative research is needed. Qualitative research also reveals areas of consensus, either positive or negative, in patterns of response, and it is especially useful in the ongoing development and refinement of new ideas. Therefore, qualitative research is frequently combined with or followed by a quantitative study in order to more fully understand the forces at play (Leedy, 1993).

The following research hypotheses guide the study:

(1) Are market orientation and MDU employees' satisfaction related? (2) Are employees' satisfaction and service quality related? (3) Are managers' perceptions of service quality different from the perceptions of other employees in the same organization? (4) Are MDU managers' perceptions of market orientation greater than those of other employees in the same organization? (5) Are patients' perceptions of service quality related to MDU employees' performance? (6) Are patients' satisfaction and MDU service quality related?

The Cardiac Unit of the participating institution was used as the sample because it has approximately 15 professional staff members with experience in the cardiac diagnostic area of interest. The study required about six to eight weeks of calendar time, including preparation of the final written report. Meetings with the managers of the MDUs and the coordinator of research were scheduled to discuss the results of the study. A total of 50 patients, 3 managers, 3 medical directors, and 10 staff were randomly selected to be surveyed across a range of categories including patient satisfaction, change management, benchmarking, and the use of information in decision-making. Respondents were assured that all results would be kept confidential.

The content of the study will be briefly described here in order to give context for the development of the framework. The target population for this survey includes managers, technologists, doctors, nurses, and other health professionals who have assumed a cardiac managerial role in addition to their cardiac-clinical responsibilities. The sample includes random samples of physician directors — professional managers in an acute care hospital in Ontario. Variables for inclusion in the managerial non-invasive technique survey were selected from several sources, including consultation with academics and clinicians, and feedback from a series of pre-test questionnaires. The questionnaire consists of four areas of interest: (1) demographic information, (2) personal influences, (3) managerial knowledge of administration, and (4) cardiac information.

The overall aim of this investigative survey is to obtain information that would allow development of a method to assist cardiac managers in addressing management problems resulting from changes in market orientation, within the context of limited resources. The results will provide valuable insight to cardiac managers and will help other health care providers understand the value of having a leader who addresses business problems and appreciates the effort cardiac managers put into leading the team in business decisions. These results will help managers to examine their own perceptions of market orientation and those of their employees. The establishment of a market-oriented culture within the hospitals — one that empowers all employees to gather, disseminate, and respond to the changing marketplace — is likely to improve overall hospital performance. Samples of all surveys used in this study are provided at Appendices A through D.

Question 1 — Position in organization: All 3 respondents selected Management/Supervisory.

Question 2 — Three best customers: Doctors (6 responses); Nurses (4 responses); Outpatients and Hospital Inpatients (not selected).

Question 3 — Why do they do business with you: Good customer relations (2); Good knowledge of technological and medical diagnostic business (1).

Question 4 — Greatest challenges: Staff (2); Forecast of budget funding (1).

Question 5 — Chief competitor: Key competitor (1); Competitor with different corporate cultures (1); Competitor with different styles and needs (1).

Question 8 — Changes to improve customer services: "Our pharmacy service needs better methods of dispensing prescriptions."

Question 9 — Changes to improve staff satisfaction: "We need more people here." "I wish we could tie actual performance to promotions and raises."

Question 10 — Most important part of managing: "People skills are the hardest thing to develop, but they are the most important thing." "Putting yourself in the other fellow's shoes."