AAA Spark Meeting of the Regions

Lean Implementation, Investment Inefficiency, and Performance Consequences—Empirical Evidence from U.S. Hospitals

• In Event: Corporate Culture and Stewardship

Abstract

This study empirically examines the characteristics of hospitals implementing lean thinking and the impact of investment efficiency on hospital performance. Results using a panel data set of lean adopters for hospitals across the United States indicate that service complexity, and size are positively associated with lean implementation, while competition and age of hospital are negatively associated with lean implementation. Moreover, there is a strong evidence that the lean investment inefficiency is associated with lower total profit ratio and patient satisfaction. Finally, our difference-in-difference tests confirm the causality relationship between lean implementation and financial performance measures. This study is among the first to empirically investigate lean investment inefficiency and performance consequences using a large-scale archival data in the healthcare industry. From practice point of view, managers need to evaluate their hospitals characteristics and find a good match between the characteristics and lean implementation as investment inefficiency will lead to poor performance.

Authors

• Hassan HassabElnaby, Northern Kentucky University

• Amal A. Said, Northern Kentucky University

• Huilan Zhang, The Pennsylvania State University Altoona