On the tension between standardized and customized policies in healthcare: The case of length-of-stay reduction

Hospitals increasingly adopt standardized policies as a way to improve the efficiency of healthcare delivery. One key policy has been to reduce a patient's length of stay, which is commonly perceived as an effective means of improving patient outcome, as well as reducing the cost per procedure. We put this notion to the empirical test by using a database of 183,712,784 medical records of patients in the English NHS between 1998 and 2012, studying the effects of the NHS's policy of decreasing length of stay for hernia patients. While we found it to be an effective way of reducing the cost per procedure, on aggregate, we also found that it increases the risk of readmission and of death for vulnerable and elderly patients, unduly increasing the long-term failure costs of the operation for these patient groups. Based on our findings we propose a differentiated policy to selectively decrease length of stay, which we estimate could save up to US$565 per non-emergency hernia procedure (a 19.97% reduction in the cost per procedure). We outline the implications of our findings for medical practice, and discuss the wider theoretical contributions to the wider standardization-customization debate in healthcare operations management.