Essays on Improving Quality and Safety in Highly Regulated Industries

Abstract

Managing quality and safety is critical in highly regulated industries because failing to do so can lead to serious negative consequences. One way to improve quality and safety is enhancing organizational focus, emphasis on a specific set of actions. To study various contexts of focus, I select three settings in highly regulated industries: acute-care hospitals, nursing homes, and oil pipeline operators. First, I study internally driven focus as disproportionate emphasis on a medical specialty in acute-care hospitals. I examine the effect of focus strategy and its combined effects with patient experience practices, on quality performance measured as readmission rates and patient satisfaction. Using secondary data from 3,027 hospitals, I find that focus has undesirable effects on both measures. However, patient experience mitigates the negative influence of focus on readmission rates. I also find that an imbalance between focus and patient experience results in poor performance. There is no single magic bullet to improve the two performance measures. Second, I study externally driven change in attentional focus where recurring visits are unannounced while initial visits are announced in advance at nursing homes. Drawing on the attention-based view, I examine the effects of announced and unannounced inspections on the immediate and sustained quality performance. Using a dataset from accredited nursing homes, I show that unannounced inspection visits lead to a more sustained increase in quality performance than announced visits. Thus, announcing the inspection in advance results in short-term gains but long-term disadvantages. Finally, I study externally driven focus on a safety management program in oil transportation. The program requires pipeline operators to prioritize their resources to reduce incidents in high consequence areas (HCAs). I examine the effects of pipeline system complexity and the learning experience with the program, on safety performance measured as future incident cost. Using a panel dataset of 642 pipeline operators, I find that complexity increases the cost but organizational learning reduces it. Interestingly, complexity heightens the negative relationship between the experience and future incident cost. The program is fruitful for incidents in high consequence areas (HCAs), but not in non-HCAs, which substantiates the intent of the program.