The Impact of Combining Conformance and Experiential Quality on Health Care Clinical and Cost Performance

The quality of operational processes is an important driver of hospital performance. In particular, processes that reliably deliver both evidence-based and patient-centered care, which we refer to conformance and experiential quality, respectively, have been argued to result in better clinical outcomes. However, hospitals, in general, struggle to perform well on these process quality dimensions. Operations management theory suggests that this may be due to the cost involved in combining these dimensions. In other words, combining conformance and experiential quality may lead to a tradeoff between clinical and cost performance. To investigate this issue in detail, we use a 6-year secondary data from 3474 U.S. acute care hospitals to examine the effect of combining conformance and experiential quality on two dimensions of hospital performance: clinical outcomes and cost efficiency. We find that hospitals with high levels of both conformance and experiential quality demonstrate better clinical outcomes as measured by length of stay and readmission rate, but have worse performance with regard to cost efficiency as measured by cost per discharge. To understand this tradeoff better, we conduct post-hoc analyses that look at more granular elements of experiential quality: an action-focused dimension and a communication-focused dimension. Results from these analyses offer additional insights into the clinical outcomes-cost efficiency tradeoff encountered by hospitals and have important implications for researchers, hospital administrators, and policy makers.