The role of safe practices in hospitals’ total factor productivity

Timothy R Huerta1, Mark A Thompson2, Eric W Ford31Center for Health Innovation, Education, and Research, 2Rawls College of Business, Texas Tech University, Lubbock, TX, USA; 3Forsyth Medical Center Distinguished Professor of Health Care, The University of North Carolina Greensboro, Greensboro, NC, USAAbstract: The dual aims of improving safety and productivity are a major part of the health care reform movement hospital leaders must manage. Studies exploring the two phenomena conjointly and over time are critical to understanding how change in one dimension influences the other over time. A Malmquist approach is used to assess hospitals’ relative productivity levels over time. Analysis of variance (ANOVA) algorithms were executed to assess whether or not the Malmquist Indices (MIs) correlate with the safe practices measure. The American Hospital Association’s annual survey and the Centers for Medicare and Medicaid Services’ Case Mix Index for fiscal years 2002–2006, along with Leapfrog Group’s annual survey for 2006 were used for this study. Leapfrog Group respondents have significantly higher technological change (TC) and total factor productivity (TFP) than nonrespondents without sacrificing technical efficiency changes. Of the three MIs, TC (P < 0.10) and TFP (P < 0.05) had significant relationships with the National Quality Forum’s Safe Practices score. The ANOVA also indicates that the mean differences of TFP measures progressed in a monotonic fashion up the Safe Practices scale. Adherence to the National Quality Forum’s Safe Practices recommendations had a major impact on hospitals’ operating processes and productivity. Specifically, there is evidence that hospitals reporting higher Safe Practices scores had above average levels of TC and TFP gains over the period assessed. Leaders should strive for increased transparency to promote both quality improvement and increased productivity.Keywords: safety, productivity, quality, safe practice, cost, operations