Cooperative Engagement Theory: Stakeholder Engagement as an Explanation of Hospital Medicare Charges

Abstract

Cooperative engagement theory predicts that organizations will act more responsibly the more they engage with NGO stakeholders who themselves act as agents for societal interests. This study empirically tested, and strongly confirmed, cooperative engagement theory in the hospital industry for COPD, heart failure, and mental illness. Using hierarchical linear regression, we found that the more NGOs, and NGO-posing GOs, were included on the hospital’s website (our proxy for NGO engagement), the lower the hospital’s Medicare and non-Medicare charges. We present and discuss finer-grained results, and discuss implications of our results for the hospital industry and cooperative engagement theory in general.