This Article Full Text (PDF) e-companion References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Download to citation manager Citing Articles Citing Articles via Google Scholar Google Scholar Articles by Kwon, S.-W. Search for Related Content

Does the Standardization Process Matter? A Study of Cost Effectiveness in Hospital Drug Formularies

A. Gary Anderson Graduate School of Management, University of California at Riverside, Riverside, California 92521
seokwook{at}ucr.edu

While research on the cost effectiveness of standardization to date has focused on the impact of different degrees of standardization, it has paid insufficient attention to the process an organization uses to formulate and implement standardized procedures. Drawing on the organizational decision-making literature and procedural fairness literature, this study identifies a number of key process features in standardization and argues that variations in these process features across organizations help account for the varying success of standardization in achieving cost effectiveness. Using hospital drug standardization for coronary artery and pneumonia cases to ground much of the argument, I analyzed inpatient discharge data from Florida, Illinois, New York, and Texas, combined with an original survey of 243 hospital pharmacy directors. The results indicated that an increasing degree of standardization was associated with cost effectiveness when the level of formal objectivity in creating the standardized procedure was high and when there was due process in resolving disputes about the standardized procedure. This finding broadly supports the argument that the cost effectiveness of standardization depends not just on the degree of standardization but also on the process by which the standardized procedures are created and implemented.

Key Words: healthcare; hospitals; organizational studies; design; effectiveness performance
History: Received: March 24, 2006;