Strategic groups and outcomes in the US hospice care industry

Purpose - As a result of a drastic increase in new patients, two major shifts are occurring in the US hospice care industry: an increase in the number of for-profit providers, and hospices are increasing in size through acquisitions and mergers. Hospices are trying to both increase the number of innovative programs they offer and decrease their operating expenses to improve their margins and attract more patients. This study seeks to investigate if strategic groups exist within the industry as hospices try to become more innovative and efficient, which grouping factors are most significant, and to determine whether there is a relationship between group membership and performance.Design methodology approach - Cluster analysis and ANOVA are used to analyze data from 93 California hospices.Findings - Three strategic groups exist within the market, innovative practices significantly affect group membership, and innovation-oriented groups outperform others in terms of quality of care.Practical implications - Many hospices focus on innovation, and evidence suggests that continued pursuit of innovative practices is critical, whereas efficiency does not appear to have a significant impact on quality of care. Focus on such evidence-based practices is important for long-term success.Originality value - This is the first study to investigate strategic group formation in the hospice care industry.