Articles

Linking Process Quality and Resource Usage: An Empirical Analysis

D. ANDRITSOS, C. TANG

Production and Operations Management

December 2014, vol. 23, n°12, pp.2163-2177

Departments: Information Systems and Operations Management, GREGHEC (CNRS)

Keywords: Healthcare operations, Healthcare policy, Pay-for-performance


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 paper, 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 (P4P) programs, which tie the reimbursement of hospitals to their adherence to evidence-based medical guidelines


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