Linking Process Quality and Resource Usage: An Empirical Analysis

Dimitrios Andritsos and Christopher S. Tang
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Dimitrios Andritsos: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique
Christopher S. Tang: Anderson Graduate School of Management, UCLA - UCLA - University of California [Los Angeles] - UC - University of California

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Abstract: Motivated by an increasing adoption of evidence-based medical guidelines in the delivery of medical care, we examine whether increased adherence to such guidelines (typically referred to as higher process quality) is associated with reduced resource usage in the course of patient treatment. In this study, we develop a sample of US hospitals and use cardiac care as our context to empirically examine our questions. To measure a patient's resource usage, we use the total length of stay, which includes any additional inpatient stay necessitated by unplanned readmissions within thirty days after initial hospitalization. We find evidence that higher process quality, and more specifically its clinical (as opposed to its administrative) dimensions, are associated with a reduction in resource usage. Moreover, the standardization of care that is achieved via the implementation of medical guidelines, makes this effect more pronounced in less focused environments: higher process quality is more beneficial when the cardiac department's patient population is distributed across a wider range of medical conditions. We explore the implications of these findings for process-oriented pay-for-performance programs, which tie the reimbursement of hospitals to their adherence to evidence-based medical guidelines.

Keywords: healthcare operations; healthcare policy; pay-for-performance (search for similar items in EconPapers)
Date: 2014-12
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Citations: View citations in EconPapers (15)

Published in Production and Operations Management, 2014, 23 (12), pp.2163-2177. ⟨10.1111/poms.12249⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01099628

DOI: 10.1111/poms.12249

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