Focus as emphasis: Conceptual and performance implications for hospitals

• DOI: http://doi.org/10.1016/j.jom.2011.02.002
• Author: Gregory N. Stock,Christopher M. McDermott
• Published date: 01 September 2011
• Date: 01 September 2011

Journal of Operations Management 29 (2011) 616–626

Contents lists available at ScienceDirect

Journal of Operations Management

journal homepage: www.elsevier.com/locate/jom

Focus as emphasis: Conceptual and performance implications for hospitals

Christopher M. McDermotta,∗, Gregory N. Stock b

aLally School of Management, Rensselaer Polytechnic Institute, Troy, NY 12180, United States

bCollege of Business, University of Colorado at Colorado Springs, 1420 Austin Bluffs Parkway, Colorado Springs, CO 80918, United States

article info

Article history:

Received 7 September 2010

Received in revised form 1 February 2011

Accepted 18 February 2011

Available online 1 March 2011

Keywords:

Focus

Hospitals

Strategy

Empirical

abstract

Focus in hospitals has been heralded as the next frontier in improving its efficiency and efficacy

(Herzlinger, 2004). However, there is scarce empirical work examining its effects in this setting. Focus

in hospitals can take several different forms, ranging from standalone specialty centers to a hospital that

chooses to emphasize in some operational way a particular specialty while still offering a full range of

services. Although standalone facilities can be found in many locations, the vast majority of hospitals

must follow the latter route to achieve focus. Current conceptualizations and measures of focus struggle

to capture this construct in a way that does not assume a narrowing of range of offerings. In contrast to

the traditional view of focus as narrowing, in this paper, we address the perspective of focus as emphasis.

We select cardiology as the specialty and use secondary data for more than 264,000 patients in New York

State to examine the relationship between focus as emphasis and hospital cost performance. Our results

support the notion that such focus is associated with lower costs. Moreover, our results also show that

focus in hospitals can be operationalized as a disproportionate emphasis on one line of service, without

necessarily narrowing the overall range of services provided.

© 2011 Elsevier B.V. All rights reserved.

1. Introduction

To improve performance, healthcare organizations have read-

ily adopted many core theoretical tenets that have emerged from

years of observation, experimentation, and learning in manufac-

turing settings. Currently, focus is at the center of much debate

in healthcare (e.g., Herzlinger, 2004). In this setting, the con-

cept of focus can range from the standalone specialized medical

center to a traditional hospital that deliberately emphasizes (in

some way) a particular specialty (e.g., cardiology) more than

their competition (Ginsburg, 2000). The standalone specialty med-

ical center is more in line with the traditional manufacturing

notion of focus as a narrowing of the range of services pro-

vided by the organization. This traditional conceptualization of

focus we refer to as focus as narrowing. However, the mission

of almost any acute care general hospital would not allow that

hospital to choose to reduce the range of medical services it pro-

vides. Therefore, this second approach to focus, which we refer

to as focus as emphasis, is particularly appealing to most hospi-

tals.

The literature is divided on whether focus facilitates or restricts

superior performance. Proponents of focus argue that it plays a

∗Corresponding author. Tel.: +1 518 276 4861.

E-mail addresses: mcderc@rpi.edu (C.M. McDermott), gstock@uccs.edu

(G.N. Stock).

crucial role in leading to superior performance by enabling orga-

nizations to select and choose market or customer segments, by

restricting task variety and thus better enabling the organization

to align its decisions with a narrow set of tasks. While fewer in

number, opponents counter that focus promotes tunnel vision and

results in poor performance due to missed opportunities associ-

ated with economies of scope and the synergies that often occur

through a breadth of offerings. Kekre and Srinivasan (1990) find

that business units with broader product lines are characterized

by larger market share and profitability than more focused units.

Similarly, Ketokivi and Jokinen (2006) conclude that focus is not a

critical factor in firm performance, finding superior performance in

both focused and unfocused plants, and argue that this may be the

result of the particulars of the specific operating environments of

the firms, as opposed to being driven by focus itself. It is unclear if

hospitals benefit from focus; much of the existing research exam-

ines standalone speciality centers, yet (Ginsburg, 2000) argues that

much of what we see in terms of focus in hospitals is not the cre-

ation of specialty centers, but rather, an increase in emphasis on

one service line.

While standalone centers certainly do exist, and are consistent

with popular conceptualizations of focus (i.e., a deliberate narrow-

ing of activities or services to improve performance), this view of

focus does not capture the other, more prevalent occurrence of

focus in hospitals, wherein an organization chooses (or is man-

dated to maintain its full range of offerings), while at the same time

emphasizing some smaller set of offerings in some way.

0272-6963/$ – see front matter © 2011 Elsevier B.V. All rights reserved.

doi:10.1016/j.jom.2011.02.002