NCPA - National Center for Policy Analysis


September 12, 2005

Cohort turnover, which involves the simultaneous exit of a large number of experienced employees and similarly sized entry of new workers, hurts productivity considerably. A new paper from the National Bureau of Economic Research argues that cohort turnover is especially bad for teaching hospitals.

Teaching hospitals have a near-complete staff turnover every July. According to the authors, this changeover disrupts established teams of doctors and other caregivers within hospitals. Using data on all patient admissions from a large, multi-state sample of American hospitals over a five-year period, the authors find that:

  • The average length of stay (LOS) for the average, major teaching hospital increases by roughly 2 percent following the July turnover and remains between 1 percent and 2 percent higher through the final six months of the calendar year.
  • Similarly, the average, major teaching hospital experiences an increase in risk-adjusted mortality of roughly 4 percent in the July-August period and this effects remains at levels between 2 percent and 4 percent for the last six months of the calendar year.
  • Based on a total of roughly 200 major teaching hospitals in the United States, the July phenomenon is associated with roughly 1,500 to 2,750 premature deaths per year.

The authors note that their initial evidence suggests that supervision can mitigate this negative effect. Even if firms are not able to reduce their levels of turnover, they may be able to manage its effects.

Source: Les Picker, "New Hospital Residents and Increased Mortality," NBER Digest, September 2005; based upon: Jason Barro and Robert Huckman, "Cohort Turnover and Productivity: The July Phenomenon in Teaching Hospitals," National Bureau of Economic Research, Working Paper No. 11182, March 2005.

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