Original Article Hospitals as Learning Organizations: Fostering Innovation Through Interactive Learning Casimiro Dias, MPH; Ana Escoval, PhD The article aims to provide an analytical understanding of hospitals as “learning organizations.” It further analyzes the development of learning organizations as a way to enhance innovation and performance in the hospital sector. The article pulls together primary data on organizational flexibility, innovation, and performance from 95 administrators from hospital boards in Portugal, collected through a survey, interviews with hospital’s boards, and a nominal group technique with a panel of experts on health systems. Results show that a combination of several organizational traits of the learning organization enhances its capacity for innovation development. The logistic model presented reveals that hospitals classified as “advanced learning organizations” have 5 times more chance of developing innovation than “basic learning organizations.” Empirical findings further pointed out incentives, standards, and measurement requirements as key elements for integration of service delivery systems and expansion of the current capacity for structured and real-time learning in the hospital sector. The major implication arising from this study is that policy needs to combine instruments that promote innovation opportunities and incentives, with instruments stimulating the further development of the core components of learning organizations. Such a combination of policy instruments has the potential to ensure a wide external cooperation through a learning infrastructure. Key words: health services, hospital, innovation, learning organization, performance H ospitals in Portugal, as well as across Europe, are currently facing several challenges, including the aging population, the increasing burden of chronic diseases related to risk factors, and the expansion of health care options by new technologies. Moreover, the current economic crisis has resulted in both neg- ative implications on the availability of resources and a positive impact on the demand for health services. These circumstances are increasingly adding pressure to performance improvement of the hospital sector. 1 It is widely assumed that these current changes in the economic environment might be described by the concept of “the learning economy.” 2 It argues that be- sides the increasing use of knowledge in the econ- omy, the knowledge itself becomes obsolete at a faster pace. While mechanisms for knowledge creation and diffusion have significantly advanced, the access and application of such knowledge have not kept up the same pace. The result is an important gap between ex- isting evidence and daily practice in the hospital sector. This calls for an increased focus on learning capaci- ties of hospitals to make the best use of knowledge in terms of innovation development. 3 In this article, learn- ing refers to the acquisition of new skills and compe- Author Affiliations: World Health Organization, Regional Office for Europe, Copenhagen, Denmark (Dr Dias); and School of Public Health, University Nova Lisboa, Lisbon, Portugal (Dr Escoval). Correspondence: Casimiro Dias, MPH, Division of Health Systems and Public Health, World Health Organization, Regional Office for Europe, 8, Scherfigsvej, DK-2100 Copenhagen Ø, Denmark (cad@euro.who.int). The authors declare no conflicts of interest. Q Manage Health Care Vol. 24, No. 1, pp. 52–59 Copyright C  2015 Wolters Kluwer Health, Inc. All rights reserved. DOI: 10.1097/QMH.0000000000000046 tencies in order to achieve individual or organizational goals. 4,5 As hospitals are facing an increasing turbulent en- vironment, it becomes imperative to support learning conditions within hospitals in order to tackle current and emergent challenges. 6 The recognition that knowl- edge and learning are key drivers of innovation and performance has been a major breakthrough in man- agement thinking. It has opened new perspectives on management toward learning processes across differ- ent sectors of the economy. These research traditions, building on the work of sociology and economy, have been summarized by Rogers, 7 which have focused on linkages between the innovation developers and adopters. However, the knowledge-based approaches have radically redefined both innovation development and dissemination in terms of knowledge creation and dissemination. The absorptive capacity for new knowledge has been in- troduced as a nonstructural factor of innovation includ- ing “learning organization” values and goals, the or- ganization’s existing knowledge base, and promotion of knowledge dissemination within and outside the organization. 8 Such focus on learning as part of enhancing organi- zational flexibility may be traced back to the theoretical developments by Kanter 9 and Rogers. 7 The main ar- gument of these authors is the need of organizations to enhance the capacity to transform themselves in a continuous way. Such stream of literature has led to the concept of the learning organization, combining differ- ent disciplines such as total quality management and organizational learning. 10 The management literature has pointed out the rel- evance of establishing learning organizations. 11 Here, the organizational structure will have a major effect on Copyright © 2015 Wolters Kluwer Health, Inc. Unauthorized reproduction of this article is prohibited. 52 January–March 2015  Volume 24  Number 1 www.qmhcjournal.com