The Role of Performance Reporting System Characteristics for the Coordination of High-Cost Areas in Hospitals

Abstract

This paper explores the role of a performance reporting regime’s characteristics for two non-financial performance measures that are commonly used in the management of operating theaters (OTs) in German hospitals. The performance measures are the on-time first case of the day starts and the percentage of deviations from the short-term OT plan. The characteristics studied are reporting detail, reporting method and reporting frequency. We find that the degree of detail that the reporting system provides on the causes of negative performance exerts a significant positive effect on both performance measures. The reporting method and frequency do not affect performance. We also study the effect of existing processual, organizational and governance-related problems on performance. We find that these problems exert a significant negative effect on performance but that performance can be improved by detailed reporting.

Acknowledgements

We thank two anonymous referees, the participants at the 2014 EAA annual conference, the 2014 New Zealand Management Accounting conference and the Hohenheim-Tübingen Workshop on OR management for their many helpful comments and suggestions. Our special thanks go to Martin Kukuk, Paul Rouse, Julie Harrison and the special edition’s editors, whose help and suggestions to improve the manuscript are gratefully acknowledged.

Notes

1 For a detailed description of the German health care system, see Obermann, Müller, Müller, Schmidt, and Glazinski (2013).

2 This value is slightly better than the response rate obtained in the earlier 2002 surveys conducted by the German Society of Anesthesiology. Both response rates were considered typical and satisfactory by our cooperation partner, the German Society of Anesthesiology (BDAI). Siegmund et al. (2006) and Berry et al. (2007) are purely descriptive and report the survey results on OT management prevalence and select features of OT management. Ernst et al. (2012) empirically analyze whether the adoption of an OT management system improved performance measured by morning delays. None of the contributions addresses the reporting system characteristics.

3 In 2003, hospitals could volunteer to use DRGs. In 2004, their usage became mandatory.

4 For our analysis, we considered all respondents who had answered yes to the existence of an ‘up the hierarchy’ reporting system. Some of these respondents collected data on morning delays but did not collect the reasons regularly and in detail. These observations were pooled with those who stated that information on the reasons for morning delays was collected with a low level of detail.

5 Although not included, the overall qualitative results remained the same for self-reported and objective data on delays.

6 Our choice of performance measure follows the usual short-term objectives targeted by German OR management: (1) starting the first procedures on time, (2) avoiding deviations between the projected and realized short-term OT plan/schedule and (3) keeping turnover times low (McIntosh et al., 2006; Schuster et al., 2013). We do not analyze turnover times because these are more susceptible to chance events than POG-driven morning delays but are less susceptible than plan deviations (Lapierre et al., 1999).

7 The responses to the open-ended question contained 8 (10) for delay (plan deviations) observations that left the open-ended question for typical reasons that negatively affect OT performance unanswered. To avoid losing these observations and to err on the side of caution, we grouped them with the POG = 0 group. Robustness tests that excluded these few observations had the same qualitative results at the same levels of significance as the estimations of models 2–5 and 7–10.

8 This consolidation directly results from the findings of model 1 (6), which showed that this approach was sufficient to depict the relevant explanatory power of the model and was therefore maintained for all subsequent estimations. See Table 2 for details on this classification.

9 We gratefully acknowledge the help provided by two anonymous OT mangers in constructing this variable. Both were experienced anesthesiologists and had not participated in the original survey.

10 Some respondents answered that they used both regular and irregular reporting together. The numbers are 11 (12) for Delay (Plandev). These were all categorized as Written = 1. In addition, some respondents answered ‘on demand only’; these responses were categorized as Written = 0. Consequently, ‘irregular’ and ‘on demand only’ are the relevant reference category.

11 Some respondents answered that they used both written and oral reporting. The numbers are 22 (25) for Delay (Plandev). These were categorized as Written = 1; thus, ‘oral reporting only’ is the relevant reference category.

12 A hospital falls into each category mainly depending on the number of beds and disciplines offered.

13 We are aware that the use of different responses on the Likert scale for the construction of detail for the two performance measures entails a loss of information. We have chosen this approach to retain as much information as possible while assuring that the classes contain a sufficient number of observations to construct interaction terms.

14 See Table 4.

15 A detailed explanation can be found in Verbeek (2012, chapter 3.6.3).

16 We also had to drop the dummy for basic care hospitals for the regressions on subsample with POG = 0 because there were no basic care hospitals in the subsample.

17 Because H_2b had to be rejected in the original model, however, we recommend caution in interpreting these additional findings.

18 For N = 107 observations in the original survey that gave information about delays, there were 7 observations that answered the reporting question but stated that they did not have an MCS. Three of those gave negative answers to the question concerning the existence of hierarchical reporting, whereas the remaining 4 stated that they had reporting regimes of various degrees of detail.

19 For details, see Heckman (1979).

20 Details on these tests can be obtained from the authors upon request.