Why Standardization Reduce Costs And Improve Quality?

In 2007, after John Wright initiated the formation of a protocol for total knee replacement, Brigham and Women's Hospital cut costs and length of stay apart from improving pain control and patient mobility. As a standardization practice, the new protocol decreased the time spent on decision-making and the number of suppliers. However, one of the issues with this change is resistance from surgeons who used different prostheses. While most surgeons followed the protocol, the hospital needs to know how to motivate doctors to use the same prostheses as it can boost the hospital's bargaining power with suppliers.
Why Standardization Would Reduce Costs and Improve Quality Standardizing healthcare practices can reduce costs and enhance quality by
First, standardization can cut costs and boost patient outcomes by diminishing differences in decision-making, including the time spent on analyzing options and choosing the best medical products and services. Roulin et al. (2013) assessed the cost-efficiency of enhanced recovery implementation. After comparing outcomes between the experimental and control groups, findings indicated that the enhanced recovery group had a lower rate of severe complications and mean savings per patient of almost $2,000. The authors noted that prior to the enhanced recovery pathway, each surgeon worked on his/her own without considering cost-savings. Subsequent to the standardization of care, all patients experienced similar pre-, intra-, and postoperative standards, reducing variations and improving care in general. Second, costs can be reduced because the hospital can better predict expenses and materials needed, as well as
Hackbarth and Milgate (2005) explored the effectiveness of policy recommendations from the Medicare Payment Advisory Commission (MedPAC) which asserts that “physicians' use of information technology (IT) has the potential to greatly improve the quality of care and to decrease its cost” (p. 1147). The authors argued that the incentives MedPAC offers will be effective as they make sense to the greater aims of health care; “differential payments based on quality performance-focus on the objective of improved quality, not simply the purchase of an IT system” will encourage physicians to use IT as they are quality-increasing approaches (Hackbarth & Milgate, 2005, p. 1147). Rewards would then depend on quality improvements and not merely adopting the protocol per