Case Study: Age Of Assets And Quality Of Care In Three New York State Hospitals

Abstract

A previous study (Morey, Scherzer & Lee, 2005) of seventy-three New York hospitals examined the relationship between age of assets, fiscal viability and quality of care.  The relationship of these factors was examined using 2002 data, for each of the hospitals randomly selected for inclusion in study.  Several financial variables were used to construct a fiscal viability index; and a “quality index” was created from selected mortality outcomes and procedural measures used to evaluate specific aspects of institutional care.  The results of the study indicated that fiscal viability positively influenced the quality of hospital care, which means that hospitals with better financial conditions tend to provide greater quality of care to their patients.  However, the effect of age of assets on quality was counter-intuitive, with the research results indicating hospitals with older assets provided better quality care to their patients.  This unexpected outcome might stem from a measurement error in determining the age of asset.  Age of asset was determined with respect to all long-term assets, but average age of equipment may have a greater impact on hospital care quality than age of buildings.  Related to this issue, various quality measures may be affected differently by the age of assets.  For example, hospitals with the latest diagnostic equipment may greatly influence the outcome of certain inpatient conditions.  The purpose of this case study was to examine three hospitals in the study that demonstrated this unexpected outcome; that is, hospitals with older assets that appeared to provide better quality services to their patients than hospitals with younger assets.