Speaker(s):   Rob Huckman and Jason Barro (HBS)
Title:                  The July Effect: Resident Turnover and Productivity in Teaching Hospitals


Abstract

The impact of labor turnover on productivity has received a great deal of attention in the literature on organizations. In this study, we consider this issue by examining the annual July turnover of residents in teaching hospitals in the United States. This setting is particularly well-suited for this analysis due to the exogenous nature of the turnover and the readily available data on both resource utilization and product quality. Using patient-level data from roughly 800 U.S. hospitals per year over the period from 1993 to 1997, we find that the annual resident turnover each July results in declines in hospital productivity that last for most of the last half of the calendar year. Relative to non-teaching hospitals, we identify significant increases in both the average length of patient stay (i.e., resource utilization) and patient mortality rates (i.e., product quality) for those facilities that most rely on residents for the provision of medical services.