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The Effects of Focus on Performance: Evidence from California Hospitals


  • Diwas Singh KC

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

  • Christian Terwiesch

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


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
    DOI: 10.1287/mnsc.1110.1401

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    References listed on IDEAS

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    Blog mentions

    As found by, 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


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    Cited by:

    1. Antonio Vera & Pythagoras Petratos & Torsten Oliver Salge, 2018. "A widening gap? Static and dynamic performance differences between specialist and general hospitals," Health Care Management Science, Springer, vol. 21(1), pages 25-36, March.
    2. 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.
    3. 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.
    4. Chien-Ming Chen, 2017. "Supply Chain Strategies and Carbon Intensity: The Roles of Process Leanness, Diversification Strategy, and Outsourcing," Journal of Business Ethics, Springer, vol. 143(3), pages 603-620, July.
    5. Hui Zhang & Thomas J. Best & Anton Chivu & David O. Meltzer, 2020. "Simulation-based optimization to improve hospital patient assignment to physicians and clinical units," Health Care Management Science, Springer, vol. 23(1), pages 117-141, March.
    6. 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.
    7. 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.
    8. Sebastian McRae & Jens O. Brunner & Jonathan F. Bard, 2020. "Analyzing economies of scale and scope in hospitals by use of case mix planning," Health Care Management Science, Springer, vol. 23(1), pages 80-101, March.
    9. Bichescu, Bogdan C. & Bradley, Randy V. & Smith, Antoinette L. & Wei, Wu, 2018. "Benefits and implications of competing on process excellence: Evidence from California hospitals," International Journal of Production Economics, Elsevier, vol. 202(C), pages 59-68.
    10. 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.
    11. 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.
    12. Mandar Dabhilkar & Anna Svarts, 2019. "From general to specialty hospitals: operationalising focus in healthcare operations," Operations Management Research, Springer, vol. 12(1), pages 94-111, June.
    13. 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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