Design for performance: studies on cost and quality in U.S. health care

This dissertation suggests an important set of issues to consider around "design for performance" at the system and process levels. At the system level, under what conditions does cost-sharing lead to lower total costs without reducing quality of care? At the process level, under what conditions and to what extent does excellent internal supply operations result in superior hospital performance? Specifically, the first half of the dissertation examine the diagnostic imaging utilization and payment pattern for people with High Deductible Health Plan (HDHP). Using 2010 commercial insurance claims data of more than 21 million individuals, I find that HDHP enrollment is associated with a 7.5% decrease in the number of imaging studies and a 10.2% decrease in standardized imaging payments after controlling for health status and other confounding factors. This study suggests increased patient cost-sharing contributes to reductions in diagnostic imaging utilization and spending. However, increased cost-sharing may not allow patients to differentiate between high and low-value services; better patient awareness and education may be a crucial part of any reductions in diagnostic imaging utilization. Follow-up studies are conducted through in-depth conversation with physicians and patients to further understand the role patients play in deciding the usage of imaging studies. I explore in the second half of the dissertation a new avenue for increasing patient safety—improving internal service quality (ISQ). Using over a year’s worth of monthly data on the average ISQ delivered by 11 support departments to five nursing units within a hospital, we test the impact of ISQ on two nursing-sensitive adverse events: patient falls with injury and hospital-acquired pressure ulcers. We find support for our hypothesis that higher levels of ISQ are associated with lower rates of adverse events. Our study has important implications for theory and practice as it points to a fruitful, cost effective, and yet underutilized avenue for improving quality of care