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The Effects of Focus on Performance: Evidence from California Hospitals

Author

Listed:
  • Diwas Singh KC

    () (Goizueta Business School, Emory University, Atlanta, Georgia 30322)

  • Christian Terwiesch

    () (The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

Abstract

We use hospital-level discharge data from cardiac patients in California to estimate the effects of focus on operational performance. We examine focus at three distinct levels of the organization--at the firm level, at the operating unit level, and at the process flow level. We find that focus at each of these levels is associated with improved outcomes, namely, faster services at higher levels of quality, as indicated by lower lengths of stay (LOS) and reduced mortality rates. We then analyze the extent to which the superior operational outcome is driven by focused hospitals truly excelling in their operations or by focused hospitals simply "cherry-picking" easy-to-treat patients. To do this, we use an instrumental variables estimation strategy that effectively randomizes the assignment of patients to hospitals. After controlling for selective patient admissions, the previously observed benefits of firm level focus disappear; focused hospitals no longer demonstrate a statistically significant reduction in LOS or mortality rate. However, at more granular measures of focus within the hospital (e.g., operating unit level), we find that more focus leads to a shorter LOS, even after controlling for selective admission effects. This paper was accepted by Yossi Aviv, operations management.

Suggested Citation

  • Diwas Singh KC & Christian Terwiesch, 2011. "The Effects of Focus on Performance: Evidence from California Hospitals," Management Science, INFORMS, vol. 57(11), pages 1897-1912, November.
  • Handle: RePEc:inm:ormnsc:v:57:y:2011:i:11:p:1897-1912
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    File URL: http://dx.doi.org/10.1287/mnsc.1110.1401
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    References listed on IDEAS

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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Thesis Thursday: Sarah Zheng
      by Chris Sampson in The Academic Health Economists' Blog on 2018-03-15 07:00:19

    Citations

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    Cited by:

    1. repec:kap:hcarem:v:21:y:2018:i:1:d:10.1007_s10729-016-9376-0 is not listed on IDEAS
    2. repec:eee:proeco:v:202:y:2018:i:c:p:59-68 is not listed on IDEAS
    3. Jonathan R. Clark & Robert S. Huckman, 2012. "Broadening Focus: Spillovers, Complementarities, and Specialization in the Hospital Industry," Management Science, INFORMS, vol. 58(4), pages 708-722, April.
    4. Thomas J. Best & Burhaneddin Sandıkçı & Donald D. Eisenstein & David O. Meltzer, 2015. "Managing Hospital Inpatient Bed Capacity Through Partitioning Care into Focused Wings," Manufacturing & Service Operations Management, INFORMS, vol. 17(2), pages 157-176, May.
    5. Diwas Singh KC & Bradley R. Staats, 2012. "Accumulating a Portfolio of Experience: The Effect of Focal and Related Experience on Surgeon Performance," Manufacturing & Service Operations Management, INFORMS, vol. 14(4), pages 618-633, October.
    6. repec:kap:jbuset:v:143:y:2017:i:3:d:10.1007_s10551-015-2809-8 is not listed on IDEAS
    7. Soroush Saghafian & Wallace J. Hopp & Mark P. Van Oyen & Jeffrey S. Desmond & Steven L. Kronick, 2014. "Complexity-Augmented Triage: A Tool for Improving Patient Safety and Operational Efficiency," Manufacturing & Service Operations Management, INFORMS, vol. 16(3), pages 329-345, July.
    8. Antonio Moreno & Christian Terwiesch, 2015. "Pricing and Production Flexibility: An Empirical Analysis of the U.S. Automotive Industry," Manufacturing & Service Operations Management, INFORMS, vol. 17(4), pages 428-444, October.
    9. Bradley R. Staats & Francesca Gino, 2012. "Specialization and Variety in Repetitive Tasks: Evidence from a Japanese Bank," Management Science, INFORMS, vol. 58(6), pages 1141-1159, June.
    10. Thanassoulis, Emmanuel & Silva Portela, Maria & Graveney, Mike, 2016. "Identifying the scope for savings at inpatient episode level: An illustration applying DEA to chronic obstructive pulmonary disease," European Journal of Operational Research, Elsevier, vol. 255(2), pages 570-582.

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