In the Wake of the General Hospital : Focus and Scale in Healthcare Operations

Abstract: This thesis tackles the changing landscape of healthcare delivery, with an increasingly fragmented set of healthcare providers and where speciality hospitals increasingly replace or complement traditional general hospitals. There is a need for guidance to policymakers and healthcare providers, on how different set-ups of healthcare delivery facilities, in terms of the scale and the focus of each facility, impacts performance. In spite of this, facility design and other structural elements of operations, have received relatively little attention in the healthcare operations management literature, compared to infrastructural elements such as scheduling and quality management. There is a lack of agreement among researchers on how healthcare facility design - and scale and focus in particular - affects performance in healthcare. Hence, this thesis investigates the relationship between scale (in terms of size or volume of operations) and performance (in terms of quality and cost), and focus (in terms of narrowing the range of services or emphasizing certain services) and performance in healthcare operations.This thesis builds on two research studies: an in-depth case study of a transformation of a regional hospital network, and a quantitative study using data from the Scandinavian Obesity Surgery Registry. Based on the first study a profile model of focus in healthcare organizations is proposed, where focus is operationalized in six dimensions: Knowledge areas, Procedures, Medical conditions, Patient groups, Planning horizons, and Levels of difficulty. The second study examines the relationships between focus and performance, and between scale and performance, in the context of elective surgery. When controlling for patient case mix in the different hospitals, the study shows benefits of both focus and scale (volume). More focused facilities have fewer complications after surgery and shorter procedure times. Facilities with higher volumes have fewer complications after surgery, shorter procedure times, and shorter length-of-stay in hospital for patients.The results presented in this thesis contribute to the healthcare operations management literature in four different ways: First, they extend and translate previous operationalizations of focus, developed in a manufacturing context, into the context of healthcare service delivery. Second, they provide evidence for a positive association between focus and cost and quality performance, in the context of elective surgery. Third, they provide evidence for a positive association between scale (volume) and cost and quality outcomes, in the context of elective surgery. Fourth, they support the emerging contingency theory of benefits of focus in healthcare, a theory stating that patients with less complex needs benefit more from focused operations. The results also suggest a complementary contingency condition for benefits of scale in healthcare, finding that more complicated treatments benefit more from an increased scale of operations.This thesis has implications for management and policy. It provides a framework for understanding profiles of hospital focus, either as a step in the strategy development for a single hospital or as a step in planning patient allocation within a hospital network. Moreover, it gives tentative guidance on the importance of volume and specialization in different types of healthcare services. Following from this, it also provides tentative guidance on which type of facility that is best suited for different healthcare services.