Hospitals in the US are faced with challenges in how to compete and remain viable in an increasingly competitive environment. Using data from a primary survey of hospitals and from various secondary sources, we investigate the incremental effects on hospital performance of location, strategy, and technology. We find that hospital location is significantly related to performance, but that a hospital’s choice of strategy can moderate the effect of location. Additionally, we find hospitals that invest more extensively in clinical technologies tend to be better performers regardless of location. Hospital size, measured as number of beds, captures the effects of location and technology investment in accounting for a major portion of hospital performance. While we cannot argue that larger is always better for hospitals, mergers, partnerships, and other forms of consolidation currently observed in the marketplace indicate that managers in the hospital industry understand the advantage of size.

Although there is a wealth of research on operations management and strategic planning in hospitals, there has been little if any research on the integration of these two issues. Hospital administrators are being pressured to improve the quality of services and to curb costs -two primary themes within the field of operations management. This leads us to wonder to what extent operations are considered within the strategic planning process and what impact it may have. By surveying the literature, we identify a pattern in hospital management research, and identify articles which address the operations capabilities of quality, flexibility, delivery and cost control. These articles can serve as a springboard for research in hospital operations strategy, an area that is largely neglected in the literature. We also provide examples of how hospitals are addressing operations capabilities, and conclude with implications for hospital administrators and a research agenda for re searchers.issues of hospitals (Smith-Daniels et al., 1988;Pierskalla and Wilson, 1989;Siferd and Benton, 1992), operational issues have yet to be linked to the broader issues of business strategy. Most of the operations oriented articles focus narrowly on issues of hospital and health care operations such as cost containment, capacity planning or personnel scheduling. We argue, however, that operations encompass a much broader range of decisions than those currently found in the literature, and are a significant factor in health care strategic planning and management.Research on operations strategy in the service sector is relatively new (McLaughlin et al., 1991;Roth and van der Velde, 1991), and it has yet to greatly influence hospital strategic planning. In one notable exception, Roth (1993) discussed her re-0272-6963/96/$15.00

Noncompliance with hospital visits for surgical procedures can be predicted from noncompliance with other healthcare encounters. Surgical procedures for previously noncompliant patients should be booked at the end of the operating room day, when the cancellation is least likely to interfere with operating room flow.

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