Broadening Focus: Spillovers, Complementarities and Specialization in the Hospital Industry

Jonathan R. Clark; Robert S. Huckman

Article | Management Science | April 2012

Broadening Focus: Spillovers, Complementarities and Specialization in the Hospital Industry

by Jonathan R. Clark and Robert S. Huckman

Abstract

The long-standing argument that focused operations outperform others stands in contrast to claims about the benefits of broader operational scope. The performance benefits of focus are typically attributed to reduced complexity, lower uncertainty, and the development of specialized expertise, while the benefits of greater breadth are linked to the economies of scope achieved by sharing common resources, such as advertising or production capacity, across activities. Within the literature on corporate strategy, this tension between focus and breadth is reconciled by the concept of related diversification (i.e., a firm with multiple operating units, each specializing in distinct but related activities). We consider whether there are similar benefits to related diversification within an operating unit and examine the mechanism that generates these benefits. Using the empirical context of cardiovascular care within hospitals, we first examine the relationship between a hospital's level of specialization in cardiovascular care and the quality of its clinical performance on cardiovascular patients. We find that, on average, focus has a positive effect on quality performance. We then distinguish between positive spillovers and complementarities to examine the following: 1) the extent to which a hospital's specialization in areas related to cardiovascular care directly impacts performance on cardiovascular patients (positive spillovers) and 2) whether the marginal benefit of a hospital's focus in cardiovascular care depends on the degree to which the hospital "co-specializes" in related areas (complementarities). In our setting, we find evidence of such complementarities in specialization.

Keywords: Performance Capacity; Operations; Advertising; Production; Corporate Strategy; Relationships; Medical Specialties; Complexity; Risk and Uncertainty; Experience and Expertise; Diversification; Quality; Health Industry;

Format: Print

15 pages

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Citation:

Clark, Jonathan R., and Robert S. Huckman. "Broadening Focus: Spillovers, Complementarities and Specialization in the Hospital Industry." Management Science 58, no. 4 (April 2012): 708–722.

Article | Annals of Emergency Medicine

The Inpatient Discharge Lounge as a Potential Mechanism to Mitigate Emergency Department Boarding and Crowding

Brian Franklin, Sharif Vakili, Robert S. Huckman, Sarah Hosein, Nicholas Falk, Katherine Cheng, Maria Murray, Sheila Harris, Charles A. Morris and Eric Goralnick

Delayed access to inpatient beds for admitted patients contributes significantly to emergency department (ED) boarding and crowding, which have been associated with deleterious patient safety effects. To expedite inpatient bed availability, some hospitals have implemented discharge lounges, allowing discharged patients to depart their inpatient rooms while awaiting completion of the discharge process or transportation. This conceptual article synthesizes the evidence related to discharge lounge implementation practices and outcomes. Using a conceptual synthesis approach, we reviewed the medical and gray literature related to discharge lounges by querying PubMed, Google Scholar, and Google and undertaking backward reference searching. We screened for articles either providing detailed accounts of discharge lounge implementations or offering conceptual analysis on the subject. Most of the evidence we identified was in the gray literature, with only three peer-reviewed articles focusing on discharge lounge implementations. Articles generally encompassed single-site descriptive case studies or expert opinions. Significant heterogeneity exists in discharge lounge objectives, features, and apparent influence on patient flow. Although common barriers to discharge lounge performance have been documented, including underuse and care team objections, limited generalizable solutions are offered. Overall, discharge lounges are widely endorsed as a mechanism to accelerate access to inpatient beds, yet the limited available evidence indicates wide variation in design and performance. Further rigorous investigation is required to identify the circumstances under which discharge lounges should be deployed as well as how discharge lounges should be designed to maximize their effect on hospitalwide patient flow, ED boarding and crowding, and other targeted outcomes.

Keywords: health care delivery; emergency room; operations improvement; operations management; Health Care and Treatment; Service Delivery; Operations; Management; Performance Improvement; Service Operations;

Citation:

Franklin, Brian, Sharif Vakili, Robert S. Huckman, Sarah Hosein, Nicholas Falk, Katherine Cheng, Maria Murray, Sheila Harris, Charles A. Morris, and Eric Goralnick. "The Inpatient Discharge Lounge as a Potential Mechanism to Mitigate Emergency Department Boarding and Crowding." Annals of Emergency Medicine 75, no. 6 (June 2020): 704–714. View Details

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This Viewpoint discusses the shifting landscape of health care financing, regulation, and delivery as a result of the coronavirus pandemic, and discusses regulatory and other changes that need to be in place if telehealth and physician practice and hospital mergers become the “new normal” once the pandemic is controlled.

The pandemic crisis is almost certain to change many American industries. It would be a shame if health care is not one of them. A number of major practices have been altered to help the country cope with the extraordinary demands that the pandemic has imposed on the health care system. This article argues that the changes should include allowing physicians to practice across state lines, the broader use of telemedicine, the expansion of the health care workforce, and a new model for health care insurance.

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Broadening Focus: Spillovers, Complementarities and Specialization in the Hospital Industry

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