Healthcare’s standardization solution

Nearly one in five dollars spent in the U.S. goes to healthcare, and that number continues to climb. As costs rise, administrators and policymakers are taking a harder look at how care is delivered.

Two seemingly opposing trends have emerged from this scrutiny. On one hand, there is a growing desire for personalized medicine, which customizes treatment to individual patients. On the other, there is mounting evidence that standardizing healthcare can lead to better results.

Enter a new study by UNC Kenan-Flagler researchers, which makes the case that higher standardization levels lead to better outcomes with fewer risks. Hospitals that provide more consistent care tend to have lower patient costs, fewer readmissions, and less variation in readmission rates, according to research by Jayashankar Swaminathan, the GlaxoSmithKline Distinguished Professor of Operations, and Anand Bhatia (PhD ’22) of IE Univeristy Business School.

“In healthcare, there’s a lot of talk about how every patient is different and care must be tailored to each individual,” says Swaminathan. “But in a landscape of growing complexity and rising costs, our research shows that consistent care delivery can actually boost patient results. The effects vary by hospital department and medical condition, but in most cases, consistent care is simply more effective and less expensive.”

Their findings have the potential to transform both how hospitals run day to day, and how patients receive treatment.

They share the study results in “Measuring Consistency in Service Delivery: Examining the Effect of Process Standardization on Hospital Performance,” which will be published in the Production and Operations Management Journal.

The need for consistent medical decision-making

Swaminathan is a world-renowned expert who studies how technology and process innovation can improve business operations. He has found that process standardization — creating standard approaches for tasks — supports customization in many sectors, including, manufacturing, retail and supply chain management. It sounds like an oxymoron, but the fundamental idea is that when you do something repeatedly, you get better at it. And those improvements make up for any benefits lost by not varying the process each time.

Swaminathan had a hunch that process standardization could be applied to healthcare, too.

Most past research looks at how closely doctors stick to set treatment directives, which exist for only a small number of diseases.

Swaminathan and Bhatia take a different approach. Using inpatient discharge data from roughly 35 million stays at acute-care hospitals in California between 2008-2016 across 764 medical conditions, they measured how consistently care is delivered to demographically similar patients with the same medical condition and similar comorbidities using actual interventions rendered by clinicians.

“It’s not just about doing things in the same order — taking temperature first, then blood pressure and other vital stats. What’s more important is doing the same medical interventions for similar patients,” he says. “Those interventions are what typically drive costs up or down, as well as determine whether the patient gets cured or not. The goal is consistent processes, but more importantly, consistent medical decision-making about which treatments to give patients.”

The researchers began by looking at how hospitals classify patients. When patients arrive, their records include a primary diagnosis: acute myocardial infarction (heart attack), pneumonia, acute kidney failure and so on. “We focused on primary diagnoses and grouped patients into demographic categories to create clusters of similar patients — same condition, same race, same hospital, same year, similar comorbidities,” Swaminathan says.

To measure consistency, they used the Herfindahl measure, a business tool for evaluating market concentration. If similar patients get identical treatment, the score is high, indicating standardized care. If treatments vary widely, the score stays low. This approach helped quantify something that was previously difficult to measure: how consistently hospitals treat patients with the same conditions, even without official guidelines.

The researchers found that while standardized care improved outcomes across the board, the benefits varied depending on the condition. For instance, it had a particularly strong impact on digestive system diseases, while its effects on male reproductive system disorders were more modest. Importantly, no department saw negative effects from standardization.

Getting buy-in from doctors and administrators

Their study also looked at both what drives standardization across hospitals and what doesn’t. For instance, specialty hospitals that focus on specific patient types, like pediatric and cardiac care, tend to be more standardized. So do hospitals treating patients with routine conditions.

When bed occupancy is high, though, standardization becomes much harder. This might be because busy hospitals are less likely to maintain consistent processes, with staff rushing and making decisions under pressure.

Indeed, standardization has its limits, notes Swaminathan. “Initially, more standardization leads to better performance, but once it becomes a cookie-cutter approach, it actually becomes less effective and we start to see diminishing returns,” he says. “The key is finding that sweet spot: the delicate balance between personalization and standardization.”

Achieving that balance requires getting buy-in from both administrators and clinicians by identifying what works best rather than imposing top-down protocols. For administrators, he says the findings are an opportunity to look across departments and evaluate what level of standardization exists in interventions among similar patients. They then can decide whether there are places to increase standardization when it leads to better outcomes.

And for doctors, Swaminathan says the research signals opportunities to learn from colleagues and improve patient care. “Every patient is unique of course, and doctors are experts who’ve studied extensively in their fields,” he says.

“But I think there’s real value in having more communication between clinicians within the same hospital: understanding what types of interventions are being used on similar patients, seeing if there are synergies, and learning from each other’s approaches.”