Category: Applications to Firms, Sectors, and Industries

The Association of Hospital Characteristics and Quality Improvement Activities in Veterans Administration Inpatient Medical Services

July 16th, 2012 in Applications to Firms, Sectors, and Industries, Research Day

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Joseph Restuccia

Operations and Technology Management

Authors: Joseph D. Restuccia, David Mohr, Mark Meterko, Kelly Stolzmann, and Peter Kaboli

Despite considerable recent attention to hospital quality improvement, relatively little is known about the extent hospitals are engaging in quality improvement activities (QIAs) and the hospital characteristics associated with QIAs. We developed and in 2011 administered a survey to Chiefs of Medicine (COMs) at the 124 Veterans Administration with inpatient medical services asking about the extent of use of 27 QIAs on a 5 point Likert scale, anchored by 0 = strongly disagree and 4 = strongly agree. We used multi-trait analysis to group QIAs into 3 scales which we characterized as prevention (e.g. prevention of adverse drug events), information gathering (e.g. benchmarking with other hospitals), and infrastructure (e.g. evidence-based guidelines). We also developed a scale about alignment of goals between senior leaders and the inpatient medicine service. We regressed each QI activity scale and total QIAs on use of hospitalists (physicians who practice only inpatient medicine), use of nurse practitioners or physician assistants, and alignment. Covariates included operating beds, occupancy rate, years of operation, region of country, urban/non-urban, and teaching status. After exclusion of surveys with missing data, we obtained an 84 percent response rate. The most frequently used QIAs were those related to prevention with a mean of 3.38 (with Information gathering = 2.27 and infrastructure = 2.25). Two factors were consistent statistically significant predictors of QIAs, the presence of hospitalists and alignment of senior management and the inpatient medical service. Goal alignment and use of physicians specializing in provision of inpatient medicine appear to enable implementation of QIAs.

Sustainability Babel Fish

July 16th, 2012 in Applications to Firms, Sectors, and Industries

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Nalin Kulatilaka


Authors: Ory Zik and Nalin Kulatilaka

This paper proposes a quantitative measure of sustainability. Using primary energy as a metric, it enables decisions to be made across different activities such as electricity, fuel and water use. By relying on bill data, we eliminate the need for new measurements and readily connect to economics through market prices. We choose the energy content of a gallon of gasoline as the basic unit, which turns out to be the right size and appeals to common intuition. We highlight that there are no ‘one size fits all’ rules governing sustainability decisions. Rather, the appropriate choices depend on location, time, and personal attributes.

Simple Economics of the Price Setting Newsvendor Problem

May 14th, 2012 in Applications to Firms, Sectors, and Industries, Research Day

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Michael Salinger

Markets, Public Policy and Law

Authors: Michael Salinger and Miguel Ampudia

The Lerner relationship linking the profit-maximizing price to marginal cost and the elasticity of demand generalizes to the price-setting newsvendor and the result resolves the puzzle over the different effects of additive and multiplicative uncertainty on the solution. Multiplicative uncertainty increases the optimal price because it increases the marginal cost of a unit sold and does not affect the mark-up factor. Additive uncertainty has no effect on the marginal cost of a unit sold and lowers the mark-up factor because it increases the elasticity of the average quantity sold with respect to price.