Aligning service processes to the nature of care in hospitals: an exploratory study of the impact of variation

Operational management (OM) approaches typically aim to reduce the variation in processes by removing clearly identifiable causes of variation -the so-called special causes of variation - leading to improved efficiency and quality. In healthcare, OM must deal not only with special-cause variation, but also with the type of variation that cannot be eliminated: inherent or common-cause variation. Using an exploratory database analysis of four hospitals, this article investigates whether hospital care processes can be assigned to different groups defined by their kind and size of variation, resulting in better alignment of type of care and organization of care. A detailed analysis of the length-of-stay of All Patient Refined Diagnosis Related Groups suggests groups with high and low within-group variation, which might indicate that there are groups of patients with inherently different degrees of variation in length-of-stay due to illness and treatment patterns. As is well-known, hospital care can be divided into sequential and iterative processes. Some patients groups may be classified as high-variation in one hospital but as low-variation in another, which clearly shows that deliberate choices in the design of the operational system of hospitals - i.e. special-cause variation - must be taken into account when analyzing the length-of-stay performance of hospitals. Furthermore, separating common-cause from special-cause variation will increase the likelihood of identifying the right type of process (sequential versus iterative) and business model for the right type of patients.