Cohort turnover and productivity

Description

"The impact of labor turnover on productivity has received a great deal of attention in the literature on organizations. We consider the impact of cohort turnover--the simultaneous exit of a large number of experienced employees and a similarly sized entry of new workers--on productivity in the context of teaching hospitals. In particular, we examine the impact of the annual July turnover of house staff (i.e., residents and fellows) in American teaching hospitals on levels of resource utilization (measured by risk-adjusted length of hospital stay) and quality (measured by risk-adjusted mortality rates). Using patient-level data from roughly 700 hospitals per year over the period from 1993 to 2001, we compare monthly trends in length of stay and mortality for teaching hospitals to those for non-teaching hospitals, which, by definition, do not experience systematic turnover in July. We find that the annual house-staff turnover results in increased resource utilization (i.e., higher risk-adjusted length of hospital stay) for both minor and major teaching hospitals and decreased quality (i.e., higher risk-adjusted mortality rates) for major teaching hospitals. Further, these effects with respect to mortality are not monotonically increasing in a hospital's reliance on residents for the provision of care. In fact, the most-intensive teaching hospitals manage to avoid significant effects on mortality following this turnover. We provide a preliminary examination of the roles of supervision and worker ability in explaining the ability of the most-intensive teaching hospitals to reduce turnover's negative effect on performance"--National Bureau of Economic Research web site.

Description

We consider the impact of cohort turnover -- the planned simultaneous exit of a large number of experienced employees and a similarly sized entry of new workers -- on productivity in the context of teaching hospitals. Specifically, we examine the impact of the annual July turnover of residents in American teaching hospitals on levels of resource utilization and quality in teaching hospitals relative to a control group of non-teaching hospitals. We find that, despite the anticipated nature of the cohort turnover and the supervisory structures that exist in teaching hospitals, this annual cohort turnover results in increased resource utilization (i.e., longer length of hospital stay) for both minor and major teaching hospitals, and decreased quality (i.e., higher mortality rates) for major teaching hospitals. Particularly in major teaching hospitals, we find evidence of a gradual trend of decreasing performance that begins several months before the actual cohort turnover and may result from a transition of responsibilities at major teaching hospitals in anticipation of the cohort turnover.

Subjects

Series Statement

• Working paper / Harvard Business School -- 14-113

Other Editions

• Cohort turnover and productivity: the july phenomenon in teaching hospitalsElectronic resourceNational Bureau of Economic Research2005-01-01
• Cohort turnover and productivityHarvard Business School2014