The value of process friction: The role of justification in reducing medical costs

Abstract

We study the role of process friction in increasing efficiency of service provisions. We examine one potential lever for reducing the provision of discretionary services: “justification”—an otherwise non‐value‐added process step that introduces process friction by forcing workers to explain the rationale for requesting an optional service. We exploit the presence—and absence—of a justification step in the ultrasound (US) ordering process at two emergency departments (EDs). We find that patients with abdominal pain are less than half as likely to receive an US when there is a justification step compared to when there is not. Additionally, we find a spillover effect: other diagnostic tests are also ordered less frequently. The decrease in testing reduces the average length of stay of the patients, and reduces testing costs by more than $200,000, with no decrease in quality. We show that two mechanisms underlie these results: (a) justification reduces clinicians' available time, and (b) justification forces clinicians to reflect on a patient's need for service. Our paper contributes to recent theory on friction and reflection as drivers of efficiency in services. We show that justification can serve as an effective lever for reducing medical tests—and costs—without negatively impacting quality.

Tension in the Emergency Department? The Impact of Flow Stage Times on Managing Patient‐Reported Experiences and Financial Productivity

“…In contrast to prior work (Zyzanski, Stange, Langa, & Flocke, 1998; Wood et al., 2009; Venkat, Kekre, Hegde, Shang, & Campbell, 2015), we find empirical evidence that there may not be a significant tradeoff between managing flow times for financial efficiency or patient experiences at the ED level. Our results align with more recent work in healthcare (e.g., Berry Jaeker, & Tucker, 2020) that assert that managing a process may require additional steps/time to ensure the effectiveness of care while maintaining efficient processing may be of less importance. In our case, extending the physician‐managed evaluation time can benefit both the organization and the patient.…”

How does workload affect test ordering behavior of physicians? An empirical investigation

“…Indeed, Batt and Terwiesch (2017) provide anecdotal evidence of physicians ordering tests for “covering the bases” even if the probability of learning anything from their results is relatively low, while Espeland and Baerheim (2003) find anxiety of physicians as one reason for unnecessary test ordering. Furthermore, when time with the patient is limited, evidence suggests that physicians might use tests or treatments to improve their patients' perception of their quality of service (Berry Jaeker & Tucker, 2020) and to increase patient satisfaction (Sun et al., 2000). Finally, test orders can also be used to postpone option verification and buy time, while rushing to finish the examination.…”

“…(2018) find a reduction in both likelihood and the number of tests ordered in an ED setting, where physicians receive public‐relative performance feedback and are able to learn from better performing peers. Berry Jaeker and Tucker (2020) show that a justification requirement before ordering an ultrasound decreases the use of these tests in an ED.…”

Editorial: Delivering effective healthcare at lower cost: Introduction to the special issue

“…The papers are presented in two broad groupsoperational and strategic-based on their level of investigation. Two papers describe hospital-emergency-department operations (Berry Jaeker & Tucker, 2020;Davis, Zobel, Khansa, & Glick, 2020). Two papers (Catena, Dopson, & Holweg, 2020;Lee, Venkataraman, Heim, Roth, & Chilingerian, 2020) examine how operational policies set by a national health system affect the delivery of healthcare.…”

“…Two papers (Ding, Peng, Heim, &Jordan, 2020 andMishra, Salzarulo, &Modi, 2020) examine how strategic approaches taken by hospitals, possibly in response to national health-system policies, affect the delivery of healthcare in those hospitals. Two papers describe hospital-emergency-department operations (Berry Jaeker & Tucker, 2020;Davis, Zobel, Khansa, & Glick, 2020). Two papers (Dreyfus, Nair, & Rosales, 2020;Mukherjee & Sinha, 2020) examine perioperative services.…”