Josm 02 2016 0036

Journal of Service Management
Improving service operations: linking safety culture to hospital performance

Gregory N. Stock, Kathleen L. McFadden,
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Improving
Improving service operations: service
linking safety culture to operations
hospital performance
Gregory N. Stock 57
College of Business, University of Colorado Colorado Springs,
Received 9 February 2016
Colorado Springs, Colorado, USA, and Revised 3 August 2016
Kathleen L. McFadden 27 October 2016
30 November 2016
Department of Operations Management and Information Systems, Accepted 6 December 2016
Northern Illinois University, DeKalb, Illinois, USA
Abstract
Purpose – The purpose of this paper is to examine the relationship between patient safety culture and
hospital performance using objective performance measures and secondary data on patient safety culture.
Design/methodology/approach – Patient safety culture is measured using data from the Agency for
Healthcare Research and Quality’s Hospital Survey on Patient Safety Culture. Hospital performance is
measured using objective patient safety and operational performance metrics collected by the Centers for
Medicare and Medicaid Services (CMS). Control variables were obtained from the CMS Provider of Service
database. The merged data included 154 US hospitals, with an average of 848 respondents per hospital
providing culture data. Hierarchical linear regression analysis is used to test the proposed relationships.
Findings – The findings indicate that patient safety culture is positively associated with patient safety,
process quality and patient satisfaction.
Practical implications – Hospital managers should focus on building a stronger patient safety culture due
to its positive relationship with hospital performance.
Originality/value – This is the first study to test these relationships using several objective performance
measures and a comprehensive patient safety culture data set that includes a substantial number of
respondents per hospital. The study contributes to the literature by explicitly mapping high-reliability
organization (HRO) theory to patient safety culture, thereby illustrating how HRO theory can be applied to
safety culture in the hospital operations context.
Keywords Service operations, Safety culture, Safety climate, Operational performance,
Patient safety performance
Paper type Research paper
Introduction
Improving performance in a professional service organization like healthcare is an important
research area that has recently received greater emphasis in the field of operations
management (Boyer et al., 2012; Dobrzykowski et al., 2016). Organizational culture has been an
important link to improved performance in both the manufacturing and service sector
(Prajogo and McDermott, 2011). This study examines how culture impacts performance in
one type of professional service firm, namely, healthcare, and focuses on safety culture
specifically. Performance is defined as improvements in patient safety, process quality, and
patient satisfaction. The quality of the process and the experience patients receive while in the
hospital have become vital components of service performance (Ponsignon et al., 2015).
Regardless of the complex interactions involved in customer service for a professional service
firm, the customer (or patient) ultimately evaluates the quality of the intangible service
experience (Goodale et al., 2008). In the past, hospital performance metrics were primarily
based on the efficient use of available internal resources, while little attention was paid to Journal of Service Management
Vol. 28 No. 1, 2017
pp. 57-84
The authors thank Westat and the Agency for Healthcare Research and Quality for providing data © Emerald Publishing Limited
1757-5818
from the Hospital Survey on Patient Safety Culture for this study. DOI 10.1108/JOSM-02-2016-0036
JOSM patient needs or requirements (Ponsignon et al., 2015). With the initiation of the growing effort
28,1 toward patient-centered care, and the increasing concerns about the high rate of medical
errors, hospitals are taking a broader approach to measuring overall performance.
Many healthcare organizations are now focusing attention on safety culture as a means
of improving overall hospital performance (Nieva and Sorra, 2003; Morello et al., 2013).
In fact, some have argued that many hospital intervention strategies have failed to provide
58 the desired outcomes because hospitals have overlooked the primary source of the problem,
which is a weak organizational safety culture (Singer and Vogus, 2013a). A study of 15
California hospitals found that safety culture is not as strong as desired, with wide
variations among individual hospitals (Singer et al., 2003). Moreover, “the literature is
ambiguous and inconsistent” with respect to the link between safety culture and
performance (Naveh et al., 2005, p. 11). A recent study conducted a systematic review of
patient safety research articles and found “little evidence to support a definitive impact” of
safety culture on hospital performance (Morello et al., 2013, p. 11). The article reported that
the majority of research was not empirical in nature, and the studies that were empirical had
a number of methodological limitations such as selection bias, the use of a single respondent
or hospital, poorly validated culture measures, and the use of perceptual measures of
performance (Morello et al., 2013).
In recent years, researchers have attempted to address some of these limitations.
It should be noted that objective hospital performance measures have only recently become
publically available, so most prior researchers had to rely on perceptual outcome measures
(Tucker and Singer, 2015). Boyer et al. (2012) and McFadden et al. (2015) were among the
first to examine how safety culture relates to objective outcome measures in hospitals but
acknowledge these studies suffer the limitation of only having a limited number of
respondents per hospital for the culture variables. To remedy this limitation, the US Agency
for Healthcare Research and Quality (AHRQ) developed and validated the Hospital Survey
on Patient Safety (HSOPS) culture survey (Sorra and Nieva, 2004). Moreover, AHRQ
contracted with a private firm, Westat, to administer this survey to a large sample of
hospitals in the USA, and collect its results in the HSOPS comparative database. In the most
recent report of this survey, the typical participating hospital had several hundred
respondents (Sorra et al., 2014). Some researchers have used the robust HSOPS culture
survey to examine the link between patient safety culture and performance outcomes, such
as successful patient handoffs (Richter et al., 2016) and error reporting (Richter et al., 2015).
Another recent study (Queenan et al., 2016) used the HSOPS culture survey data to
demonstrate that the effectiveness of computerized provider order entry systems depends
upon a strong hospital patient safety culture. However, it appears that there is no study that
uses this survey data along with objective measures of hospital performance collected by
the US Centers for Medicare and Medicaid Services (CMS) and used in the CMS value-based
purchasing program (VBPP) and Hospital Acquired Condition (HAC) Reduction Program.
The CMS (www.cms.gov) is the US Department of Health and Human Services agency that
administers the Medicare program and works with states to administer Medicaid. As an
additional part of its mission, CMS also collects data across an extremely wide range of
categories (including quality performance) from hospitals and other healthcare providers.
An explanation of CMS’s VBPP and the HAC Reduction Program will be discussed in the
methods section.
Given that “the literature is ambiguous and inconsistent” with respect to the link
between safety culture and performance (Naveh et al., 2005, p. 11), and given that there is
“little evidence to support a definitive impact” of safety culture on hospital performance
(Morello et al., 2013, p. 11), research is needed that uses objective measures of performance to
link safety culture to performance, as well as data on perceptions of safety culture from
numerous respondents at each hospital. One major contribution of this paper is that it
extends prior work by using: the robust HSOPS culture survey data; objective performance Improving
outcome measures collected by CMS; and several performance outcome measures, to include service
patient safety performance, process quality, and patient satisfaction. It is important to operations
consider an array of hospital performance outcomes because customer requirements have
expanded in recent years in all industries as competition intensifies and technology
continues to rapidly advance (Hong et al., 2014). Specifically, hospitals face extreme
pressures to simultaneously improve several performance indicators, even in the face of 59
rising medical costs and increasing demands from third-party payers and consumers.
In addition, new changes in Medicare’s reimbursement system not only penalize hospitals
for committing certain types of medical errors, but also offer incentive payments to
hospitals that show improvements in a number of objective performance measures (Ding,
2014). Due to these changes, hospitals are now incentivized to focus on a broad range of
hospital outcomes such as process quality, patient safety, and patient satisfaction. The use
of a robust HSOPS culture survey data with multiple respondents at each hospital, and
several objective performance measures will improve the validity of the findings and
provide a richer understanding of the relationships.
This study contributes to both the healthcare operations literature and the professional
service operations (PSO) literature. By explicitly mapping high-reliability organization
(HRO) theory to patient safety culture variables, the study illustrates how HRO theory can
be applied to safety culture in the hospital operations context. This study contributes to the
PSO literature by providing support in one professional service context for the idea that
culture dimensions can improve performance. These findings advance theory and provide a
deeper understanding of the impact of safety culture on outcomes.
The remainder of this paper first considers the theoretical explanations for the
relationship between safety culture and performance. A conceptual model and hypotheses
applying the theoretical concept to the specific context of patient safety and hospital
performance are then developed, followed by a description of the empirical methods and
results of the data analysis. The paper concludes with a discussion of the results and
implications for theory and practice.
Literature review and conceptual model

The term safety culture was first introduced in 1988 by the International Nuclear Safety
Advisory Group shortly after the Chernobyl nuclear power plant disaster in the Ukraine
(Flin et al., 2000; Solomon, 2015). The Advisory Committee on the Safety of Nuclear
Installations define safety culture as “the product of individual and group values, attitudes,
perceptions, competencies, and patterns of behavior that determine the commitment to, and
the style and proficiency of, and organization’s health and safety management.
Organizations with a positive safety culture are characterized by communications
founded on mutual trust, by shared perceptions of the importance of safety and by
confidence in the efficacy of preventive measures.” As Nieva and Sorra (2003) point out, this
definition of safety culture can be easily adapted to the healthcare context.
Two theories that dominate safety research are Normal Accident Theory (NAT) and
HRO theory. Both have provided theoretical explanations for many safety studies in
operations management (McFadden et al., 2006, 2009; Stock et al., 2007; deKoster et al., 2011;
Speier et al., 2011). NAT emerged first, after the Three Mile Island nuclear power plant
disaster in 1979, and suggests that the complexity and tight coupling of systems such as
nuclear power plants make such accidents inevitable (Perrow, 1984; Speier et al., 2011).
In this view, the “right” combination of factors will eventually “line up” in just the right way
to result in a serious accident. For complex and tightly coupled systems,
these types of accidents are “normal” and are therefore referred to as “normal accidents”
(Perrow, 1984). In the healthcare context, there is complexity in the human body,
JOSM in diagnosis, in the range of treatment options available, and in healthcare organizational
28,1 systems in general. This level of complexity can lead to medical errors, adverse
events, death, or other patient safety incidents that fit the definition of normal accidents
(Gaba, 2000). HRO theory, on the other hand, is based on the idea that accidents can be
prevented through a well-developed safety culture that involves the implementation of
safety practices (La Porte, 1996). Coincidentally, early development of HRO theory can be
60 traced back to the Chernobyl nuclear power plant accident in 1986, which was the first
event to highlight the importance of a safety culture in improving performance outcomes
(Flin et al., 2000; Solomon, 2015). HROs can be defined as organizations that function in
complex, tightly coupled, and often hazard-prone environments and yet consistently
maintain high safety records (Roberts, 1990a; McFadden et al., 2009). Research suggests that
HROs operate in a more reliable manner than other complex organizations because they are
mindful of human variability and proactively enact practices that forestall the possibility of
error (Reason, 2000; Vogus et al., 2010). Mindfulness is considered from the organization
level, as a collective mindfulness (Vogus and Welbourne, 2003). HRO leaders understand
that accidents are inevitable, so they train employees to recognize, learn and recover from
them (McFadden et al., 2009).
Although HRO theory was first applied to healthcare in 1994 (Gaba et al., 1994), it has
only recently begun to be cited more widely in the healthcare literature (Gaba et al., 2003;
Singer et al., 2003; Vogus and Sutcliffe, 2007; McFadden et al., 2015). Moreover, healthcare
has recently focused on implementing approaches to safety originally pioneered in classic
HRO industries, such as the airline, energy, and nuclear power industries, in order to
improve organizational performance (Singer et al., 2010). Table I provides a logical mapping
of the patient safety culture variables used in this study to HRO theory. HRO theory
provides a theoretical explanation for the connection between safety culture and hospital
performance, and support the research hypotheses that follow.
This study also draws upon the PSO literature (Dobrzykowski et al., 2016) to explain the
link between safety culture and performance. The PSO literature stresses the importance of
a service climate as a way of providing workers with the motivation and capability to
demonstrate quality service behavior when interacting with customers (Lia, 2007;
Drach-Zahavy and Somech, 2013). Similarly, HRO theory stresses the importance of a safety
climate in providing the motivation and capability to exhibit safety behavior (de Koster
et al., 2011). Although climate and culture are not the same, they are often used
interchangeably. Climate technically refers to shared perceptions of safety while culture
refers to an action orientation (see Singer et al., 2009). Leaders within the organization
typically create the environment that motivates and reinforces employee behavior.
“Creating a robust safety culture takes dedication, and leaders must be willing to put their
time, resources and efforts into giving safety the priority it deserves” (Solomon, 2015, p. 52).
Management/supervisor support makes it safe for employees to communicate openly about
errors, and encourage non-punitive response to errors. It is presumed that management/
supervisor activities shape frontline employees’ perceptions of safety climate and
consequently their behavior to act in a way that promotes safety and improves performance
(Vogus et al., 2010). A study of teamwork in UK hospitals found empirical support that
“leadership, frequency of team meetings, and a climate of trust and openness” contribute to
effective teamwork (Bamford and Griffin, 2008). Through the process of endorsing practices
by frontline clinical staff, it is also presumed that improved learning will occur that will
result in modifications and continuous enhancements of safety practices and behaviors
(Singer and Vogus, 2013b). Activities include education and learning-oriented interventions.
Learning has been presented in the literature as either an outcome or a process (Edmondson,
1999). If treated as a process, learning can be defined as the method of identifying and fixing
errors. It involves both organizational and individual skills. Frontline employees’ actions are
HRO strategies for Logic mapping variable to
Improving
enhancing safety Variable Variable definition HRO theory service
operations
Create an environment Communication Staff freely speak up if they Evidence from HRO case
where employees feel safe openness see something that may studies show the importance
to speak up about errors negatively affect a patient of open communication based
and feel free to question those on mutual trust (Cox et al.,
with more authority 2006; Ruchlin et al., 2004) 61
Consistently discuss with Feedback and Staff are informed of errors, HROs have fewer accidents
employees error prevention communication given feedback about changes because they keep employees
strategies about error implemented, and discuss updated on changes (Singer
ways to prevent errors et al., 2003)
Train staff to recognize Supervisor/ Supervisors/managers HRO leaders view errors as
unsafe situations and train manager consider staff suggestions for inevitable so train staff to
managers to respond to expectations and improving patient safety, recognize and respond
staff suggestions for actions praise staff for following effectively (La Porte, 1996;
improvement promoting safety patient safety procedures, Roberts et al., 2001). HROs
and do not overlook patient stress collective mindfulness
safety problems (Weick et al., 2000)
Develop interdependence Teamwork Staff support each other, HROs encourage teamwork
among organizational within units treat each other with respect, to avoid multiple and
units that encourages and work together as a team conflicting goals in a complex
teamwork environment (Roberts, 1990a;
Rochlin, 1996)
Provide adequate Staffing There are enough staff to HRO theory purports that
staffing levels handle the workload and low staff levels contribute to
work hours are appropriate accidents (Roberts, 1990b)
to provide the best care
for patients
Develop incentives for Non-punitive Staff feel that their mistakes HROs implement a system of
reporting errors that are response to error and event reports are not rewards for reporting errors,
non-punitive, just and held against them and that not only, but especially their
supportive mistakes are not kept in their own errors (Rochlin, 1996;
personnel file Cohen et al., 2003; McFadden
et al., 2009)
Continuously evaluate Organizational Mistakes have led to positive HROs implement
errors that occur in order to learning- changes and changes are organizational changes and
learn and improve Continuous evaluated for effectiveness redesign systems and Table I.
improvement processes based on error Mapping HRO theory
evaluations (Gaba, 2000; to the patient safety
Rochlin, 1996) culture variables
presumed to become shared attitudes and behaviors that improve learning and reinforce
safety behavior over time, and ultimately lead to better performance outcomes (Vogus et al.,
2010; Singer and Vogus, 2013b). Examples of improved performance outcomes include
better process quality, increased patient satisfaction, and improved patient safety.
As explained above, HRO theory and the PSO literature align to support the notion that
organizational culture should be related to patient safety. Prior studies have demonstrated
the importance of leadership as an enabler of safety practices and procedures. Vogus et al.
(2010) found that leaders in HRO possess a strong commitment to safety, enable safety
practices and procedures among their subordinates, and place safety as a number one
priority. McFadden et al. (2009) found that enabling strategies were associated with enacting
practices that ultimately lead to better patient safety outcomes. In addition, they found an
indirect relationship between patient safety culture and perceptual patient safety outcomes
in hospitals. In another study, McFadden et al. (2015) found patient safety culture was
JOSM directly and negatively related to HAC rates, and patient safety culture was indirectly
28,1 related to HAC rates via continuous quality improvement initiatives. An HAC is a condition
acquired while in a hospital that would not reasonably be expected to have developed
during the course of normal medical care. Examples of an HAC would be a postoperative
pulmonary embolism or an infection that originated while the patient was in the hospital.
HAC is an objective measure of patient safety outcomes. Therefore, prior literature supports
62 the following hypothesis:
H1. Patient safety culture will be positively associated with patient safety performance.
HRO theory also provides support for the proposition that organizational culture should be
related to process quality, which refers to the extent to which hospitals follow best clinical
practices, and is a dimension of operational performance in healthcare. HRO theory stresses
the importance of structure, training, and redundancy (Weick, 1987) as well as delivering
consistent quality (Weick et al., 2000). Kerfoot (2007, p. 155) argues that “HROs strive to
replicate the same ‘best practice’ over and over again in spite of any extenuating
circumstances.” To reduce the negative effect of tight coupling, HROs develop a variety of
back-up functions that can take the form of personnel and equipment redundancies that
result in high reliability (Roberts, 1990b). HRO theory also supports the use of activities such
as standard operating procedures, checklists, and the determination of best practices as a
means to improve performance, where centralization of operations is combined with a high
degree of delegation (Bierly and Spender, 1995). To combat complacency, HROs
continuously evaluate and update processes and procedures, and strive to learn the best
way to do things. They create a supportive culture that continuously trains workers on how
to react to unexpected situations (Roberts, 1990a). Research from HRO case studies
attributes their superior performance primarily to their safety culture (Singer et al., 2009).
Vogus and Sutcliffe (2007, p. 997) explain that “in an effort to make healthcare delivery
safer, researchers and practitioners have turned to research on high reliability organizations
[…]. Recent studies do suggest trusted leaders and standardized protocols (care pathways)
create a context likely to bolster the effects of safety organizing on patient safety”. Empirical
studies provide some support for the linkage between culture and process quality. For
instance, Boyer et al. (2012) found positive indirect effects through quality practices.
Similarly, McFadden et al. (2015) found indirect effects of safety culture and performance via
continuous quality improvement initiatives. Therefore, this study builds on HRO literature
and proposes that process quality should be related to a safety culture:
H2. Patient safety culture will be positively associated with process quality.
A second dimension of operational performance in healthcare is patient satisfaction. In the
PSO literature, customer satisfaction has been identified as a means of evaluating service
quality (Anderson and Sullivan, 1993; Heineke and Davis, 2007). Dissatisfaction occurs
when customer expectations are not met. In healthcare, the quality of the experience patients
receive while in the hospital has become an important component of the delivery of care
(Ponsignon et al., 2015). Yet, “few studies have specifically examined safety from the patient
perspective” (Rathert et al., 2011, p. 1). Both the PSO literature as well as HRO theory
provides support for the idea that organizational culture should be associated with
improved overall patient experience (Bierly and Spender, 1995; Roberts et al., 2001; Bigley
and Roberts, 2001; Heineke and Davis, 2007). According to the service literature, customer
experience can be defined as an outcome (e.g. medical error or no medical error) resulting
from the direct interaction with a service provider (Ponsignon et al., 2015). Moreover, the
service literature identifies high reliability as one of five key dimensions of customer
satisfaction and service quality (Parasuraman et al., 1985; Parasuraman et al., 1988). A study
in the hospitality industry linked reliability to customer satisfaction and identified the
presence of a service culture as the mediator of high reliability/high recovery and Improving
satisfaction (Mount and Mattila, 2009). Kerfoot (2007) explains the connection in healthcare service
between patient satisfaction and HRO. HROs make fewer mistakes due to their safety operations
culture (Roberts, 1990a; Ruchlin et al., 2004). Therefore, the PSO literature supports the
premise that customers will be more satisfied with their experience due to the improved
reliability. Empirical research also supports the relationship between safety culture and
patient satisfaction. For example, Ancarani et al. (2011) found some evidence that 63
employees’ perception of a strong organizational climate mediates the relationship between
the hospital managers’ climate orientation and patient satisfaction. Moreover,
Dobrzykowski et al. (2015) found empirical support that a hospital’s innovation
orientation enables key cultural practices like physician partnering which ultimately
leads to patient satisfaction in low physician employment hospitals. Rathert et al. (2011)
found that perceptions of patient safety were linked to service quality and patient
satisfaction. Specifically those patients who reported dissatisfaction also perceived safety
risks (Rathert et al., 2011). Therefore, this study builds upon HRO and PSO literature and
proposes the following hypothesis:
H3. Patient safety culture will be positively associated with patient satisfaction.
Methods
Data
This study employed data collected from several different sources, with the hospital as the
unit of analysis. Three different categories of data were utilized to investigate the
relationship between patient safety culture and hospital performance. The first category
included data measuring patient safety culture; the second included data providing
organizational measures to be used as control variables in the analysis; and the third
included data providing performance measures for each hospital.
The data for patient safety culture were collected by AHRQ’s contractor Westat through
their biannual HSOPS culture (www.ahrq.gov/professionals/quality-patient-safety/
patientsafetyculture/hospital/index.html) (Sorra and Nieva, 2004). The survey was
developed and validated through an extensive and thorough process. The starting point
was a review of relevant literature and existing safety culture measures, followed by the
identification of key dimensions of safety culture and the development of the initial survey
items. A draft survey was reviewed by researchers and hospital administrators and then
pilot-tested in 21 hospitals with more than 1,400 respondents. Based on the pilot test results,
the survey was refined and eventually made publicly available in 2004 (Sorra and Dyer,
2010). This measurement instrument has been used extensively in prior research (e.g. Aiken
et al., 2012; Jones et al., 2013), and it has been validated in many different settings (e.g. Sorra
and Dyer, 2010; Blegen et al., 2009).
In 2006, AHRQ began development of a comparative database that stores data from
hospitals submitting data from the HSOPS. Currently, AHRQ collects data from several
hundred hospitals on a biannual basis and publishes a report summarizing the data collected.
Hospitals may use the report to compare their own patient safety culture to those of other
hospitals. The data used for the present study was from the AHRQ’s 2013 administration of the
survey, in which 653 hospitals participated. Respondents included clinical workers, such as
nurses, physicians and technicians (such as EKG, lab, and radiology). Non-clinical staff also
responded to the survey. Respondents came from a variety of different departments, including
medical and surgical, as well as non-clinical work areas. The average hospital had 621
completed surveys and a 54 percent response rate within each hospital. A summary report from
the set of the data collected from this full sample is available from AHRQ (Sorra et al., 2014).
A subset of the hospitals in the full sample granted permission for their identifiable data,
JOSM aggregated by AHRQ at the hospital level, to be used in research related to patient safety.
28,1 This sample of 240 hospitals was used as the source of primary patient safety culture data in
this study. The average number of responses for each hospital in this sample was 686, with an
average response rate within each hospital of 59 percent.
A second data source was the Provider of Service (POS) file compiled by the
CMS (www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/
64 Provider-of-Services/index.html). The POS file includes several hundred organizational
variables for each hospital providing Medicare services. Several of these variables (e.g. number
of beds, ownership status, teaching status, and region) were used as control variables in the
analysis. A location (urban) control variable was defined based on the hospital’s zip code and
the CMS National Breakout of Geographic Area Definitions by zip code.
The third source of data were the hospital compare database, also maintained by CMS
(https://data.medicare.gov/data/hospital-compare). Hospital compare includes a collection of
publicly available data reported by hospitals across several dimensions of performance.
The performance dimensions include process quality, patient satisfaction, patient safety,
patient medical quality, and efficiency. The measures included in the hospital compare
database are particularly relevant because CMS has begun to adjust a hospital’s
Medicare reimbursement payments upward or downward based on its performance on the
VBPP and HAC Reduction Program measures described below (Centers for Medicare and
Medicaid Services, 2013).
To assemble the final data set used in the analysis, the Medicare Provider Identification
number unique to each hospital was used to merge the different data sets. The hospital
compare performance measures were collected only for short-term acute care hospitals.
As a result, when the HSOPS data were first merged with the hospital compare data, the
sample size was reduced from 240 to 154. The average number of respondents per hospital
in the HSOPS final sample was 848, with an average response rate of 58 percent per hospital.
On average, approximately half of the respondents in each hospital were clinical staff
(e.g. nurses, physicians, physical therapists), and approximately 76 percent of the
respondents had direct patient interaction. The POS data were then merged with this
reduced sample and then the CMS data on location (urban/rural) were merged with
this sample to arrive at the final data set.
Dependent variables
The dependent variables used in the analysis include a patient safety performance measure
and two measures of operational performance, process quality and patient satisfaction.
Hospitals must report these measures to the CMS. As mentioned previously, Medicare uses
these measures to reward high performing hospitals with incentive payments. The separate
patient safety score can also be used by Medicare to penalize poor performers by payment
reductions. Because a hospital’s financial position can be directly affected by its
achievement on these measures, these measures are especially relevant to healthcare
managers and executives (Mullin, 2014; Rice et al., 2014). It is becoming even more important
that hospital administrators have access to empirical studies that examine the effects of
patient safety culture on these specific performance measures.
The patient safety performance measure used in this analysis to evaluate H1 is the total
HAC score reported to Medicare. The total HAC score is reported as part of Medicare’s HAC
Reduction Program. The HAC Reduction Program scores can also affect a hospital
financially, as hospitals that achieve a low level of performance may have Medicare
reimbursement payments reduced. The total HAC score is the weighted average of two
different patient safety “domain” scores. One domain is based on a set of patient safety
indicators (PSIs) developed by AHRQ (AHRQ PSI 90 Score), and the other domain is based
on a set of two patient safety measures developed by the Centers for Disease Control – The
National Healthcare Safety Network Score. The total HAC score is normalized to a 1-10 point Improving
scale, where lower scores indicate better performance. A more detailed description of how service
this measure is calculated is provided by Medicare.gov (United States Department of Health operations
and Human Services, 2015), Medicare’s contractor, Quality Net (Quality Net, 2015), and the
Lake Superior Quality Innovation Network (2013), and is described in detail in Appendix 1.
Operational performance measures are taken from Medicare’s VBPP. The VBPP
provides incentive payments to hospitals that achieve high levels of performance on a 65
composite of several different quality, patient safety, and efficiency measures (Centers for
Medicare and Medicaid Services, 2013). Medicare bases its assessment of a hospital’s
performance on a composite score, referred to as the total performance score, which is
calculated as a weighted average of four components. These four components correspond to
the four dimensions of operational performance. Process quality is measured by the VBPP
process of care score. Patient satisfaction is measured by the VBPP patient experience of
care score. Patient medical quality is measured by the VBPP patient outcomes score. Finally,
efficiency is measured by the VBPP efficiency score. The weight for each component is
shown below in parentheses:
• process of care (20 percent);
• patient experience of care (30 percent);
• patient outcomes (30 percent); and
• efficiency (20 percent).
The analysis in this study uses process of care to evaluate H2 and patient experience of care
to evaluate H3. Only the first two components are included because this study analyzes
performance at the organizational level (the hospital), and the last two scores are based on
individual outcomes, such as mortality and costs. The patient outcome domain score is
based in part on a hospital’s mortality rates for several different diseases, and the efficiency
score is based on the Medicare spending per patient. Research examining relationships
between organizational variables and these types of outcomes is typically performed at the
patient level of analysis to include comorbidity and other patient factors (e.g. Clark and
Huckman, 2012; Damle et al., 2014; KC et al., 2013). A detailed description of how these
measures were calculated is provided at the CMS website (Centers for Medicare and
Medicaid Services, 2013) and is explained in Appendix 2. Each component score is
normalized to a 0-100 scale.
Independent variables
As mentioned previously, to measure safety culture, data from the HSOPS survey developed
and administered by AHRQ was used. The HSOPS instrument has 42 questionnaire items
grouped into 12 composite measures. These 12 composites include seven dimensions of
unit-level patient safety culture, three dimensions of hospital-level safety culture, and two
outcome measures. Prior research has emphasized that safety culture is most relevant at the
level of the work unit (Pronovost and Sexton, 2005; Vogus and Sutcliffe, 2007). Therefore, this
study uses only the unit culture measures in the analysis. Table AII lists the seven
composite dimensions of unit-level patient safety culture measured by the HSOPS, as well as
the individual questionnaire items for each composite. This survey instrument has been
extensively used in prior research and its psychometric properties have been empirically
validated many times and in many settings (e.g. Sorra and Dyer, 2010; Blegen et al., 2009).
The data in the sample collected by AHRQ has a major advantage of having a large number of
respondents across a wide range of organizational roles for each hospital. AHRQ provided the
data in aggregate form only as a condition of its use. Therefore, the data point for each
questionnaire item in the data set is the average of all individual responses across the entire
JOSM hospital, a typical approach used in prior research when there are multiple respondents from
28,1 each organization (e.g. Zhang et al., 2012; de Luque et al., 2008; Peng et al., 2008).
Confirmatory factor analysis (CFA) was the first step in constructing the patient safety
culture variable. There were 24 separate questionnaire items measuring unit-level patient
safety culture. As noted above, individual responses for each item were averaged across
each hospital, and these mean values were used in the analysis. An initial CFA model with
66 seven factors corresponding to the seven unit-level culture dimensions was first estimated.
This model fit the data poorly ( χ2 ¼ 869.51, 220 df, p o0.001; χ2/df ¼ 3.952; NFI ¼ 0.854;
CFI ¼ 0.886; RMSEA ¼ 0.139). Several of the individual factors were highly correlated with
values above 0.9, which suggested that the individual factors were not distinct and were in
fact a single unit culture factor. Therefore, a CFA was estimated that included a single unit-
level culture factor.
To use a more manageable number of indicators for the latent unit culture variable,
a parceling approach was used, where individual indicator items were aggregated to form
parceled indicators (Marsh et al., 1998). This approach is used commonly in the literature
(e.g. Bou-Llusar et al., 2009; Grant and Berry, 2011; Wanberg et al., 2012), with one review of
articles in top marketing, education, and psychology journals finding that almost 20 percent
of studies using structural equation models employed parceling techniques to some extent
(Bandalos and Finney, 2001). Parceling offers several advantages, including greater
reliability, more stable estimates of parameters, higher ratio of sample size to items, and
better model fit (Bandalos, 2002; Hau and Marsh, 2004). There are several different
strategies for aggregating items into parcels. Some are data driven and use exploratory
factor loadings or correlations to group items, while others are based on the content of what
the items are intended to measure (Landis et al., 2000; Matsunaga, 2008). This study uses the
content-based approach, as the developers of the HSOPS have already effectively defined
content-based parcels in the form of the composite dimensions. Each parcel was the average
of the individual items in the associated unit culture composite shown in the Appendix.
This model exhibited acceptable fit ( χ2 ¼ 21.050, 9 df, po0.05; χ2/df ¼ 2.339; NFI ¼ 0.983;
CFI ¼ 0.990; RMSEA ¼ 0.094). Convergent validity was assessed by examining the factor
loadings for each of the parceled indicators of the culture variable. All standardized loadings
were greater than or equal to 0.7, indicating acceptable convergent validity. Squared multiple
correlations for each indicator exceeded 0.5. The Cronbach’s α value for the culture variable
was 0.94, which indicates acceptable scale reliability. The parceled indicators were averaged
to compute the patient safety culture variable used in the hierarchical regression analysis
discussed below.
In addition to the explanatory patient safety culture variable, several control variables
commonly used in prior healthcare operations management research were included to
account for possible organizational and contextual effects on hospital performance. The first
control variable is hospital size, which is measured as the number of beds in the hospital
(Boyer et al., 2012). The natural logarithm of this variable is used to reduce skewness.
A second control variable used in this study is the type of ownership, which has been used
in prior research (Ding, 2014; McFadden et al., 2015). The POS data set identifies ten
different types of ownership: federal government, state government, local government,
public authority, private for profit, private not for profit, church, physician-owned, tribal,
and other. These ten different classifications were grouped into four overall categories:
government (federal, state, local, or public authority), private for profit (private for profit or
physician-owned), private nonprofit (private not for profit, church), and other (other or
tribal). Three variables were created to indicate the type of ownership: government, private
for profit, and private nonprofit, with other as the reference category. Additional variables
controlled for in this study were teaching status of the hospital (Dobrzykowski and
Tarafdar, 2015) and location (McFadden et al., 2015). Teaching status was a variable in the
HSOPS data while the location variable was created from the hospital’s zip code and an Improving
urban/rural designation by CMS (Centers for Medicare and Medicaid Services, 2014) to service
indicate whether the hospital is located in an urban or rural location (Gardner et al., 2015). operations
Finally, prior research has also included control variables to account for possible differences
among geographic regions (McKay and Deily, 2008). Therefore, dummy variables for eight
geographic regions defined by the American Hospital Association were also included in the
model. Table II provides a list and descriptions of all variables used in the analysis, and 67
Table III lists the sources of data for these variables.
Results
Data analysis
Table IV reports descriptive statistics for the study variables. Table IV also provides a
statistical comparison of the hospitals in the study sample with hospitals participating in
the VBPP that were not in the study sample. This analysis showed significant differences in
four of the variables. Hospitals in the sample showed higher mean values for one of the
outcome variables, process of care, and one of the control variables, the number of beds.
There were also differences in the distribution of ownership types and geographic location.
In particular, the proportions of private nonprofit and “other” ownership types were higher
in the sample, and Region 4, which corresponds to the west north central region of the USA,
was overrepresented in the sample. The analysis explicitly controls for these factors in
the regression models. However, these differences raise the possibility that some of the
relationships found in the analysis might be more likely to apply to larger hospitals, those
with better performance on process of care, those that are private nonprofit, or those that
are in a particular geographic region. The results presented below should be viewed with
these possible limitations in mind. Table V shows correlations between the study variables.
Hierarchical linear regression was used to test the hypothesized relationships. The control
variables were entered as a block in the first regression model for each dependent variable.
Dependent variables Description

Total HAC score Overall score from Medicare’s Hospital Acquired Condition (HAC)
Reduction Program
Process of care VBPP process of care component score
Patient experience of care VBPP patient experience of care component score
Independent variables
Patient safety culture Mean of composite scores from the Hospital Survey on Patient Safety Culture
measuring seven dimensions of unit-level patient safety culture
Hospital size (control) Ln (total beds)
Government owned (control) 1 if hospital ownership if federal, state, local, or public authority
Private for profit (control) 1 if hospital ownership is private for profit or physician-owned, 0 otherwise
Private nonprofit (control) 1 if hospital ownership is church-related or private not-for profit, 0 otherwise
Teaching (control) 1 if hospital is a teaching hospital, 0 otherwise
Urban (control) 1 if hospital is located in an urban area, 0 otherwise
Region 1 (control) 1 if hospital is located in the New England region, 0 otherwise
Region 2 (control) 1 if hospital is located in the Mid-Atlantic region, 0 otherwise
Region 3 (control) 1 if hospital is located in the South Atlantic region, 0 otherwise
Region 4 (control) 1 if hospital is located in the East South Central region, 0 otherwise
Region 5 (control) 1 if hospital is located in the East North Central region, 0 otherwise
Region 6 (control) 1 if hospital is located in the West North Central region, 0 otherwise
Region 7 (control) 1 if hospital is located in the West South Central region, 0 otherwise
Region 8 (control) 1 if hospital is located in the Mountain region, 0 otherwise Region 9 (the Pacific Table II.
region) is the reference region, where all region dummy variables are equal to 0 Variables
JOSM Dates of
28,1 Data Variable(s) Source Web link collection
HSOPS Unit patient safety AHRQ, through None – provided by AHRQ 2012-2013
culture Westat through special permission
Teaching status
CMS Provider of Size beds) CMS (Provider www.cms.gov/Research- 2013
68 Service (POS) data Ownership (private of Service (POS) Statistics-Data-and-Systems/
nonprofit, private for files), 2013 files Downloadable-Public-Use-Files/
profit, government) Provider-of-Services/index.html
Region
CMS National Location (Urban) CMS (National www.cms.gov/medicare/ 2014
Breakout of Breakout of medicare-fee-for-service-
Geographic Area Geographic payment/ambulancefees
Definitions by zip Area Definitions chedule/index.html
code by zip code)

VBPP Clinical process CMS (hospital www.medicare.gov/ 2012-2014
of care compare), fiscal hospitalcompare
Patient experience of year 2015 data
care
HAC Reduction AHRQ PSI 90 Score CMS (hospital www.medicare.gov/ 2012-2013
Table III. Program CDC NHSN Score compare), fiscal hospitalcompare
Data sources year 2015 data
Study sample Non-HSOPS respondent hospitals
Mean SD Mean SD t-statistic

Total HAC score 5.32 2.01 5.41 2.04 0.55
Process of care 59.93 17.89 55.32 20.47 3.06**
Patient experience 44.04 18.65 41.86 20.75 1.40
Ln(Beds) 5.36 0.91 5.12 0.93 3.25**
Patient safety culture 3.65 0.15 n/a n/a
Count Proportion Count Proportion χ2 (df)
Government owned 16 0.104 505 0.172 26.5 (3)***
Private nonprofit 101 0.656 1,404 0.478
Private for profit 14 0.091 664 0.226
Other ownership 23 0.149 362 0.123
Teaching hospital 60 0.390 983 0.335 1.96 (1)
Non-teaching Hospital 94 0.610 1,952 0.665
Urban Location 121 0.786 2,133 0.727 2.73 (1)
Rural Location 33 0.214 802 0.273
Region 1 2 0.013 136 0.044 146.2 (8)***
Region 2 20 0.130 360 0.117
Region 3 14 0.091 512 0.166
Region 4 80 0.519 490 0.159
Region 5 9 0.058 276 0.089
Region 6 13 0.084 246 0.080
Region 7 3 0.019 472 0.153
Region 8 6 0.039 213 0.069
Table IV. Region 9 7 0.045 384 0.124
Descriptive statistics Notes: **p o0.01; ***p o0.001
The patient safety unit culture variable is then entered in the second model for each
dependent variable. The incremental change in R2 attributable to patient safety culture is
shown in the second model for each dependent variable. Table VI shows the results of the
hierarchical regression analysis for each of the three outcome measures. For each model,
1 2 3 4 5 6 7 8 9 10
Improving
service
1. Total HAC score 1 operations
2. Process of care −0.06 1
3. Patient experience −0.20* 0.15 1
4. Patient safety culture −0.25** 0.18* 0.43** 1
5. Size 0.32** −0.20* −0.46** −0.47** 1
6. Urban locationa 0.19* −0.05 −0.22** −0.18* 0.50** 1 69
7. Government owned a
0.00 −0.08 0.08 0.10 0.04 −0.14 1
8. Private for profita
−0.04 0.02 0.18* 0.17* −0.20* 0.03 −0.11 1
9. Private nonprofita −0.03 0.02 −0.12 −0.16* 0.11 0.14 −0.47** −0.44** 1
10. Teaching hospitala 0.30** −0.22** −0.29** −0.22** 0.49** 0.25** 0.03 −0.07 −0.01 1
Notes: n ¼ 154. aSignificance levels for association among these variables computed using Fisher’s exact Table V.
test. *po 0.05; **p o0.01 Correlations
standardized coefficients are shown. H1 predicted that patient safety culture would be
positively related to patient safety performance. Lower values of the total HAC score
indicate better performance, so the negative sign of the standardized coefficient (b ¼ −0.21,
p o0.05) in Model 2 supports H1. For a regression model, the effect size is measured by the
effect size index, f 2, which is calculated as follows (Cohen, 1988):

f 2 ¼ DR2 = 1 – R2 – DR2
where ΔR2 is the incremental change in the variance explained when the patient safety culture
variable is added to the model. For this model, the value of f 2 was 0.04, which falls between a
“small” and “medium” effect (Cohen, 1988). As another interpretation of the regression results,
the standardized coefficient of −0.21 indicates that an increase of 1 standard deviation in the
Patient safety performance Process quality Patient satisfaction

Variable Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Government owned −0.05 −0.04 0.03 0.02 0.17 0.16

Private for profit −0.06 −0.06 0.04 0.04 0.16 0.16
Private nonprofit −0.11 −0.11 0.01 0.02 −0.02 −0.01
Teaching 0.16 0.16 −0.19* −0.20* −0.09 −0.10
Size 0.23* 0.12 −0.12 −0.01 −0.39*** −0.23*
Urban 0.06 0.09 0.09 0.07 0.01 −0.02
Region 1 0.05 0.05 −0.06 −0.06 0.06 0.06
Region 2 −0.11 −0.17 0.19 0.24 −0.06 0.02
Region 3 −0.29* −0.32* −0.14 −0.12 −0.04 −0.01
Region 4 −0.22 −0.26 −0.07 −0.03 0.16 0.22
Region 5 −0.09 −0.07 −0.09 −0.11 −0.06 −0.09
Region 6 −0.09 −0.10 0.05 0.06 0.13 0.14
Region 7 0.01 0.01 −0.03 −0.02 0.04 0.04
Region 8 0.02 0.04 −0.05 −0.06 −0.13 −0.15
Patient safety culture −0.21* 0.20* 0.30***
R2 0.20 0.23 0.14 0.17 0.32 0.38
F 2.53** 2.79** 1.61 1.84* 4.60*** 5.55***
ΔR2 0.03 0.03 0.06 Table VI.
F for ΔR 2
5.35* 4.54* 13.14*** Hierarchical linear
Notes: *p o0.05; **p o 0.01; ***p o 0.001 regression results
JOSM unit culture variable (equivalent to 0.15 points on a 1-5 scale) is associated with a decrease of
28,1 0.21 standard deviations in the total HAC score (equivalent to 0.42 points on a 1-10 point scale).
In Models 3 and 4, the dependent variable is process of care, a measure of process quality.
Higher values of process of care indicate better performance. Model 4 shows that safety
culture is positively and significantly related to process of care (b ¼ 0.20, p o0.05),
which supports H2. For this model, the value of f 2 was 0.04, which falls between a “small”
70 and “medium” effect (Cohen, 1988). As another interpretation of the regression results,
the standardized coefficient of 0.20 indicates that an increase of 1 standard deviation in
the unit culture variable (equivalent to 0.15 points on a 1-5 scale) is associated with an
increase of 0.20 standard deviations in the process of care score (equivalent to 3.58 points
on a 0-100 point scale).
In Models 5 and 6, the dependent variable is patient experience of care, a measure of
patient satisfaction. Higher values of patient experience of care indicate better
performance. Model 6 shows that safety culture is positively and significantly related to
patient experience of care (b ¼ 0.30, p o 0.01), which supports H2b. The effect size index,
f 2, was calculated to be 0.10, which falls between a “small” and “medium” effect
(Cohen, 1988). As another interpretation of the regression results, the standardized
coefficient of 0.30 indicates that an increase of 1 standard deviation in the unit culture
variable (equivalent to 0.15 points on a 1-5 scale) is associated with an increase of 0.30
standard deviations in the patient experience of care score (equivalent to 5.60 points on a
0-100 point scale).
Although control variables were not of primary interest, it should be noted that for the
most part, they were not significantly related to the outcome variables. The exceptions
were hospital size, which was negatively and significantly related to patient satisfaction
(b ¼ −0.23, p o0.05); teaching status, which was negatively and significantly related
to process quality (b ¼ −0.20, p o0.05); and the Region 3 variable (South Atlantic Region),
which was negatively and significantly related to patient safety performance (b ¼ −0.32,
p o0.05).
Robustness checks
To check the robustness of the results, additional analysis considered both the outcome
measures and the manner in which the patient safety culture variable was constructed.
First, to check the robustness of the outcome measures, all of the regression models were
estimated using a perceptual measure of the respondents’ assessment of overall patient
safety performance. This variable, which is referred to by the developers of the HSOPS as an
outcome measure, consists of four items (Sorra et al., 2014). The average of the four items
was calculated to obtain “Perceptual Overall Patient Safety Performance” from the HSOPS
data. That variable was then used as the dependent variable in the regressions. In each
regression, the patient safety culture was significantly related to this outcome measure.
In addition, this perceptual measure was significantly correlated to the objective outcome
measures used in the primary analysis.
To check the robustness of the approach to constructing the safety culture variable, an
exploratory factor analysis with varimax rotation was performed using the individual unit
culture items. After removing items with low loadings or high cross-loadings, seven items
remained comprising one factor. The items in this factor had been assigned by the HSOPS
developers to the composite dimensions organizational learning/continuous improvement,
feedback and communication about error, and non-punitive response to error.
The regression analysis was then repeated using the factor score for this factor as the
patient safety culture variable. The results were comparable to those reported above.
The details of these procedures are described in Appendix 4. Therefore, the results of
the analysis in this study appear to be robust.
Discussion Improving
This study found significant relationships between patient safety culture and several service
dimensions of hospital performance. These findings are particularly important because operations
Medicare will use a hospital’s performance on these measures to adjust payments to hospitals
treating Medicare patients. In addition, the cost of medical errors is borne by society, making
these findings especially important not only for hospitals but also for society in general.
Prior research has found similar relationships between safety culture and performance 71
(e.g. Aiken et al., 2012; Singer et al., 2009), but this study makes a significant contribution in
its use of a unique data set drawn from several separate sources. In particular, this appears
to be the first study to test relationships between the AHRQ HSOPS data collected by AHRQ
and comprehensive performance data from Medicare’s VBPP and HAC Reduction
Programs. The data used for independent variables, including the primary culture
measures, were collected independently from the data used to measure the dependent
variables, which eliminates common method bias as a concern. Moreover, as stated
previously, the HSOPS research instrument has been extensively validated in prior research
(e.g. Sorra and Dyer, 2010). In addition, the use of a large number of respondents at each
hospital improves validity of the research findings.
The performance measures and data used for the dependent variables are equally as
important. These measures, as noted above, include performance metrics for the VBPP and
HAC Reduction Programs. They assess performance across a range of operational
dimensions, including process quality, patient satisfaction, and patient safety, so they are
valid for understanding how culture affects organizational performance. The results of this
study suggest that improving the patient safety culture of a hospital can improve the
quality, safety and satisfaction of its patients.
Theoretical implications
This study offers several important implications for theory. First, this study contributes to
the healthcare operations literature by illustrating how HRO theory is applicable to safety
culture in the hospital operations context. Specifically, by mapping HRO theory to the
variables that define safety culture, this study helps develop a better understanding of how
the HRO approach relates and applies to improving operational performance of hospitals.
While other healthcare operations articles have drawn upon HRO theory in developing the
conceptual basis for their study (Griffith and Pope, 2015; McFadden et al., 2009; Stock et al.,
2007; Tamuz and Harrison, 2006), it appears that this is the first study to map safety culture
to HRO theory. This mapping can be especially useful to healthcare executives who want to
lead their organization in the direction of high reliability.
Second, this study contributes to the PSO literature. The primary characteristics of PSOs
are present in healthcare and include: high customer contact and high professional
judgement (Harvey et al., 2016). PSOs face culture challenges especially related to
communication, coordination, and teamwork (Harvey, 1990; Lewis and Brown, 2012; Senot
et al., 2016). This study provides support in one professional services context, namely,
healthcare, for the notion that culture dimensions (e.g. communication openness, teamwork
within units, organizational learning) can improve performance outcomes. Other PSOs such
as consulting, legal firms, architects, and engineering firms might also benefit by examining
the link between culture and performance.
Third, this study’s in-depth analysis of patient safety culture advances theory.
The conceptual models proposed by Vogus et al. (2010) and Singer and Vogus (2013b) provide
a theoretical explanation for why one would expect patient safety culture to be related to
patient safety, process quality and patient satisfaction. This research extends these studies by
offering an empirical approach and deviates from their theory by demonstrating through CFA
that these culture dimensions should be treated as a single factor.
JOSM Fourth, this study provides a deeper understanding of the impact of safety culture
28,1 on outcomes, which has previously been described as “ambiguous and inconsistent”
(Naveh et al., 2005, p. 11). It extends the work of McFadden et al. (2009, 2015) and Boyer et al.
(2012) that collected only a limited number of respondents per hospital for their
culture variables and used a different six-item culture scale based on Singer et al. (2003).
These methodological differences may help explain why their studies did not find a direct
72 relationship between patient safety culture and process quality scores (McFadden et al.,
2015), process of care scores (Boyer et al., 2012) or patient safety (McFadden et al., 2009),
while this study did.
Finally, this study addresses a call for research that uses objective measures of
performance, a robust culture survey data set, and several performance outcome measures.
Specifically, Singer et al. (2009) reported “albeit relatively small” evidence for a positive link
between safety climate and safety performance, calling for continued research into this
relationship, particularly at the hospital level of analysis (Singer et al., 2009, p. 414).
This study addresses this call by exploring the link between safety culture and performance
at the organization level and differs in the specific independent and dependent variables
analyzed. Thus, this study provides additional support for the link between patient safety
culture and hospital performance while offering a nuanced understanding of its specific
relationship to safety performance, process quality, and patient satisfaction.
Practical implications
In addition to the contributions to theory, the findings from this study also provide
significant contributions to practice. Dixon and Shofer (2006) explain that HRO theory is
“not central to the thinking about patient safety for most [healthcare] systems, but the
Agency for Healthcare Research and Quality (AHRQ) is interested in learning more about
how to apply HRO theory to healthcare performance.” This study provides some additional
insight on how HRO theory relates to safety culture, and how safety culture is linked to
improved healthcare outcomes.
Moreover, since this study measures patient safety culture using a construct comprised
of 24 separate HSOPS questionnaire items linked to improved safety performance, it follows
these items could be used as a roadmap for hospitals looking for strategies to strengthen
their patient safety culture. For example, these items include management actions that
promote safety, such as praising employees who follow safety procedures, and considering
staff suggestions for safety improvement. Other items relate to encouraging staff to not only
speak freely about errors, but also to question authority when they feel safety is being
compromised. Singer and Vogus (2013a) report that education and training are also
beneficial in building a stronger safety culture, and can help to improve employee attitudes
and behaviors about safety. Senot et al. (2016) encourage practices that foster teamwork,
collaboration, and interdependence across organizational units. Since the cost of poor safety
is borne by patients and society at large, the findings that safety culture is significantly
related to patient safety suggests that stakeholders should demand more from hospitals in
regards to creating a strong safety culture.
With that being said, several barriers still exist within healthcare that need to be
overcome before widespread implementation of the patient safety culture dimensions is
possible. First, healthcare is very complex, which makes identifying, quantifying and
prioritizing hazardous events difficult (Pronovost et al., 2009). Second, while one error often
equates to one death in healthcare; in HRO like aviation or nuclear power, one error could
lead to hundreds of deaths. Therefore, even one adverse event in these industries is highly
publicized by the media, while hundreds or thousands of separate adverse events could go
unnoticed due to the apparent isolated nature of each incident. The public, recognizing
the catastrophic consequences of adverse events in aviation, often demands action to ensure
the same mistake does not happen again. Consequently, the government often steps in and Improving
mandates certain training or system changes in aviation but may not be as motivated to do service
so in healthcare. (Pronovost et al., 2009). Nonetheless, healthcare agencies like AHRQ and operations
CMS have provided guidelines and incentives for hospitals to improve safety.
Empirical findings from studies such as the present study that examine aggregate
hospital performance should provide a stronger impetus for policy makers to take action
toward improving patient safety culture in the US healthcare system. Initiatives of this sort 73
could include linking regulatory goals to patient safety culture dimensions, encouraging
more public involvement in patient safety issues, mandating certain system changes, and
providing more financial support for research and education on this issue (McCarthy and
Blumenthal, 2006).
Limitations and future research

As is the case with all research, this research has some limitations that should be discussed.
First, while this study has provided empirical support for the relationship between patient
safety culture and hospital performance, it does not provide insight into the specific means
through which the culture might be strengthened. Future research might develop and
empirically test new conceptual frameworks that would enable hospital administrators to
implement the organizational and managerial changes needed to strengthen a hospital’s
patient safety culture. Future studies could build on these findings by conducting a
longitudinal study on how patient safety culture improves over time.
A second limitation of the data are that AHRQ’s contractor Westat allowed access only to
data aggregated at the hospital level in this sample. Access to the full set of data at the
individual respondent level would have allowed for the use of multilevel analysis
techniques. Future research might collect data from a larger sample using both the HSOPS
and an additional survey instrument as discussed above. In addition, the percentage of
Medicare and Medicaid patients in each hospital were also not available in the aggregated
data set, which would be another interesting direction for future research.
A third limitation of the study is that the data from the HSOPS database is voluntary.
Thus, participating hospitals include only those who volunteered and agreed to release their
data. Individual hospitals also decide when and how often to administer the survey. Of the
653 hospitals that completed the HSOPS, only 240 agreed to allow their responses to be used
in this research. Of those 240 hospitals, only 154 met the sample requirements of being a
general acute care hospital. Future research should explore these differences in more detail
to confirm the study’s overall findings. Future research might also examine in more depth
the relationships and dependencies between different dimensions of performance. Such an
analysis is beyond the scope of this paper, but investigating how different outcomes are
related might yield important insights into strategic and operational decisions made by
hospital managers.
A final limitation that should be mentioned is that this study focused on US hospitals
and may not be generalizable to healthcare systems in other countries. Since hospitals tend
to have specific country-related characteristics, public policy makers and markets might
have very different effects and influences in various countries. Future research might use
the HSOPS measures to assess the effects of patient safety culture on objective measures of
hospital performance in other countries.
Conclusions
This study has sought to both reconcile existing empirical findings and to suggest several
new relationships between patient safety culture and hospital performance. The findings
provide compelling evidence of the importance and impact of patient safety culture on both
JOSM patient safety and operational performance. Patient safety culture was significantly related
28,1 to patient safety, process quality, and patient satisfaction.
This study is useful for both scholars and practitioners in aiding efforts to improve
patient safety, customer satisfaction, and process quality. Although significant
relationships were found between several variables of interest, association does not imply
causality. Additional research is still needed to further clarify the linkage of safety culture
74 and hospital performance, particularly at the hospital department or unit level.
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Appendix 1. Hospital Acquired Condition (HAC) reduction program measures

The HAC Reduction Program began with fiscal year 2015 as a requirement of the Affordable Care Act,
and requires the CMS to reduce payments to hospitals that rank in the lowest 25 percent in HACs (Lake
Superior Quality Innovation Network, 2013). CMS calculates a total HAC score from a set of measures
assessing a hospital’s performance across several different dimensions and two broad domains of
patient safety. The Domain 1 score is a composite (AHRQ PSI 90) calculated from a subset of the AHRQ
patient safety indicators (PSIs). The Domain 2 score is a composite based on two measures developed
by the Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network (NHSN).
Domain 1 (AHRQ PSI 90)
• PSI 3: pressure ulcer rate;
• PSI 6: iatrogenic pneumothorax rate;
• PSI 7: central venous catheter-related blood stream infection rate;
• PSI 8: postoperative hip fracture rate;
• PSI 12: postoperative pulmonary embolism or deep vein thrombosis rate;
• PSI 13: postoperative sepsis rate;
• PSI 14: wound dehiscence rate; and
• PSI 15: accidental puncture and laceration rate.
JOSM Domain 2 (CDC NHSN measures)
• central line associated blood stream infection (CLABSI) rate; and
28,1
• catheter-associated urinary tract infection (CAUTI) rate.
Each individual measure is assigned points on a 1-10 scale based on the hospital’s ranking against all
other hospitals nationally. In particular, 1 to 10 points are awarded according to the decile in
which the score falls. A score in the highest performing decile receives 1 point, and a score in the
80 lowest performing decile receives 10 points. Therefore, lower scores indicate better performance.
The total HAC score is the weighted average of the two domain scores. In this study, the scores
for fiscal year 2015 were used. For fiscal year 2015, the weights were 35 percent for Domain 1 and
65 percent for Domain 2.
For example, if the Domain 1 score ¼ 4 and the Domain 2 score ¼ 8, the total HAC score is:
Total HAC Score ¼ ð0:35 4Þ þ ð0:65 8Þ ¼ 1:4 þ 5:2 ¼ 6:6:

The total HAC score was used as the dependent variable in the regression models.
Appendix 2. Value-based purchasing program (VBPP) measures

This study employs metrics from the CMS VBPP as operational performance measures. There are four
broad domains of performance included in the VBPP. These four domains include:
(1) clinical process of care domain;
(2) patient experience of care domain;
(3) outcome domain; and
(4) efficiency domain.
The VBPP also calculates an overall total performance score as a weighted average of the measures
from these four domains. In this study, scores from fiscal year 2015 were used. The scope of this study
is limited to two operational performance measures: clinical process of care domain, which measures
process quality, and the patient experience of care domain, which measures patient satisfaction.
The assessment of clinical outcomes and efficiency are beyond the scope of this study. Below, there is a
description of how each of the individual domain scores was calculated.
Clinical process of care domain
The process of care score indicates the proportion of patients who are provided a set of best practice
treatments in each of 12 different medical conditions. Hospitals report these data to CMS each year.
The individual medical condition measures are shown in Table AI.
For each of these measures, hospitals report the percentage of patients for whom the specified
medical procedure is performed. These percentages are aggregated into an overall score for this
domain. This measure therefore provides an assessment of how well the hospital follows best practice
processes in treating these conditions. This score is used to assign achievement and improvement
points as described below.
Patient experience of care domain

The patient experience of care domain is calculated from ratings provided by patients on eight
different dimensions of their experience of care. These measures are the same as those collected for the
Hospital Consumer Assessment of Healthcare Providers and Suppliers (HCAHPS) program
administered by CMS. The eight dimensions of patient experience are:
(1) nurse communication;
(2) doctor communication;
(3) hospital staff responsiveness;
(4) pain management;
Measure ID Medical condition Measure description
Improving
service
AMI-7a Acute myocardial infarction Fibrinolytic therapy received within 30 minutes of hospital operations
(AMI) arrival
AMI-8a Acute myocardial infarction Primary PCI received within 90 minutes of hospital arrival
(AMI)
HF-1 Heart failure Discharge instructions
PN-3b Pneumonia Blood cultures performed in the emergency department (ED) 81
prior to initial antibiotic received in hospital
PN-6 Pneumonia Initial antibiotic selection for community-acquired pneumonia
(CAP) in immunocompetent patients
SCIP-Inf-1 Surgical Care Improvement Prophylactic antibiotic received within one hour prior to
Project – Surgery surgical incision
SCIP-Inf-2 Surgical Care Improvement Prophylactic antibiotic selection for surgical patients
Project – Surgery
SCIP-Inf-3 Surgical Care Improvement Prophylactic antibiotics discontinued within 24 hours after
Project – Surgery surgery end time
SCIP-Inf-4 Surgical Care Improvement Cardiac surgery patients with controlled 6:00 a.m.
Project – Cardiac surgery postoperative serum glucose
SCIP-Inf-9 Surgical Care Improvement Urinary catheter removal on postoperative day 1 or
Project – Surgery postoperative day 2
SCIP-Card-2 Surgical Care Improvement Surgery patients on a beta-blocker prior to arrival who
Project – Surgery received a beta-blocker during the perioperative period
SCIP-VTE-1 Surgical Care Improvement Surgery patients with recommended venous
Project – Surgery thromboembolism prophylaxis ordered
SCIP-VTE-2 Surgical Care Improvement Surgery patients who received appropriate venous Table AI.
Project – Surgery thromboembolism prophylaxis within 24 hours prior to Clinical process of
surgery to 24 hours after surgery care domain measures
(5) communication about medication;

(6) hospital cleanliness and quietness;
(7) discharge information; and
(8) overall hospital rating.
For each of these dimensions, patients rate their satisfaction with their experience during their hospital
stay. The scores for each category are aggregated into an overall score rating patients’ experience in
the hospital. This score is used to assign achievement and improvement points as described below.
For each domain, CMS calculates achievement and improvement points based on the hospital’s score
in that domain. Achievement and improvement points are awarded based on the hospital’s domain
score relative to a threshold level (50th percentile of all hospitals) and a benchmark level (mean of
the top decile) as follows:
Achievement points are awarded by comparing the hospital’s score with all hospital’s scores
as follows:
• hospital score ⩾ benchmark level: 10 achievement points;
• threshold level ⩽ hospital score obenchmark level: 1-10 achievement points; and
• hospital score othreshold level: 0 achievement points.
Improvement points are awarded by comparing the hospital’s score to its scores from a baseline period
as follows:
• hospital score ⩾ benchmark level: 9 improvement points;
• baseline period level ohospital score obenchmark level: 0-9 improvement points; and
• hospital score ⩽ baseline period level: 0 improvement points.
JOSM For the process of care score, the greater of the achievement or improvement scores are used. For the
28,1 patient experience of care domain, the base score (greater of achievement or improvement
points) is added to the hospital’s consistency score, which is determined by comparing its
patient experience of care rating across all dimensions with those of all hospitals from a baseline
period as follows:
• hospital score ⩾ threshold level: 20 consistency points;
82 • worst-performing hospital’s score o hospital score o threshold level: 0-20 consistency
points; and
• hospital score oWorst-performing hospital score: 0 consistency points.
The score for each domain is then normalized to arrive at a 0-100 point score.
Appendix 3
Composite dimension Item
Teamwork within units 1. People support one another in this unit

2. When a lot of work needs to be done quickly, we work together as a
team to get the work done
3. In this unit, people treat each other with respect
4. When one area in this unit gets really busy, others help out
Supv/mgr expectations and 1. My supv/mgr says a good word when he/she sees a job done according
actions promoting patient safety to established patient safety procedures
2. My supv/mgr seriously considers staff suggestions for improving
patient safety
3. Whenever pressure builds up, my supv/mgr wants us to work faster,
even if it means taking shortcuts (R)
4. My supv/mgr overlooks patient safety problems that happen over and
over (R)
Organizational learning 1. We are actively doing things to improve patient safety
continuous improvement 2. Mistakes have led to positive changes here
3. After we make changes to improve patient safety, we evaluate their
effectiveness
Communication openness 1. Staff will freely speak up if they see something that may negatively
affect patient care
2. Staff feel free to question the decisions or actions of those with more
authority
3. Staff are afraid to ask questions when something does not seem right (R)
Feedback and communication 1. We are given feedback about changes put into place based on event reports
about error 2. We are informed about errors that happen in this unit
3. In this unit, we discuss ways to prevent errors from happening again
Non-punitive response to error 1. Staff feel like their mistakes are held against them (R)
2. When an event is reported, it feels like the person is being written up,
not the problem (R)
3. Staff worry that mistakes they make are kept in their personnel file (R)
Staffing 1. We have enough staff to handle the workload
2. Staff in this unit work longer hours than is best for patient care (R)
Table AII. 3. We use more agency/temporary staff than is best for patient care (R)
Unit-level patient 4. We work in “crisis mode” trying to do too much, too quickly (R)
safety HSOPS Notes: Items are scored as “strongly disagree” (1 point) to “strongly agree” (5 points) or “never” (1 point) to
questionnaire items “always” (5 points). Items followed by “(R)” are reverse-scored
Appendix 4. Robustness checks Improving
Outcomes service
In the HSOPS data, respondents provide an overall assessment of patient safety on four questionnaire
items. The developers of the HSOPS assigned these four items as the patient safety outcome composite operations
dimension “Overall Perceptions of Patient Safety.” The four items are:
(1) it is just by chance that more serious mistakes do not happen around here (R);
(2) patient safety is never sacrificed to get more work done; 83
(3) we have patient safety problems in our unit (R); and
(4) our procedures and systems are good at preventing errors from happening.
Items followed by (R) are reversed scored.
As one robustness check, the average of these four items was used to create an alternative outcome
measure, and then this measure was substituted as the dependent variable in a regression model with
patient safety culture. The results, shown below in Table AIII, indicate that the patient safety culture
variable is positively associated with this alternative patient safety outcome measure.
Patient safety culture
To check the robustness of the approach used to construct the patient safety culture variable, an
exploratory factor analysis was performed with all of the items measuring unit patient safety culture
using principal axis extraction with varimax rotation. After removing items with low loadings or
significant cross-loadings, a single factor emerged accounting for 76 percent of the total variance.
The factor loadings are shown in Table AIV.
Items followed by (R) are reversed scored. The factor score for this factor was used as the patient
safety culture variable in each of the regression models. The results, which are shown in Table AV
below, are comparable to those of the analysis reported in the main body of the paper. Standardized
coefficients are shown.
Variable Overall perceptions of patient safety
Government owned 0.02

Private for profit 0.04
Private nonprofit −0.05
Teaching −0.03
Size −0.09
Urban 0.04
Region 1 0.02
Region 2 −0.09
Region 3 −0.00
Region 4 −0.08
Region 5 −0.06
Region 6 0.01
Region 7 0.04
Region 8 0.02
Patient safety culture 0.84*** Table AIII.
R2 0.84 Regression results
F for R2 5.71*** with alternative
Notes: Standardized coefficients shown. ***p o0.001 outcome measure
Item Loading
We are actively doing things to improve patient safety 0.86

After we make changes to improve patient safety, we evaluate their effectiveness 0.94
We are given feedback about changes put into place based on event reports 0.89
We are informed about errors that happen in this unit 0.81 Table AIV.
In this unit, we discuss ways to prevent errors from happening again 0.96 Factor loadings for
Staff feel like their mistakes are held against them (R) 0.76 alternative patient
When an event is reported, it feels like the person is being written up, not the problem (R) 0.79 safety culture measure
JOSM Variable Patient safety Process of care Experience of care
28,1
Government owned −0.06 0.04 0.18*
Private for profit −0.08 0.06 0.18*
Private nonprofit −0.12 0.03 0.00
Teaching 0.16 −0.19* −0.09
Size 0.12 −0.02 −0.27**
84 Urban 0.09 0.07 −0.02
Region 1 0.06 −0.07 0.05
Region 2 −0.20 0.27 0.04
Region 3 −0.33* −0.11 −0.01
Region 4 −0.30 0.00 0.24
Region 5 −0.08 −0.10 −0.07
Region 6 −0.12 0.08 0.17
Region 7 0.00 −0.01 0.06
Region 8 0.01 −0.03 −0.11

Table AV.
Regression results Patient safety culture factor score −0.23** 0.22* 0.26**
with alternative R2 0.24 0.18 0.37
patient safety F for R2 2.93** 1.93* 4.60***
culture variable Notes: *po 0.05; **p o0.01; ***p o0.001
About the authors

Dr Gregory N. Stock is currently a Professor in the College of Business and the Co-Director of the
Bachelor of InnovationTM Program at the University of Colorado Colorado Springs. His research
focuses on healthcare management, and innovation and technology management, and has been
published in journals such as the Journal of Operations Management, International Journal of
Operations and Production Management, Journal of Product Innovation Management, and Health
Care Management Review. Dr Stock has a PhD Degree in Business Administration from the University
of North Carolina. He also holds BSE and MS Degrees in Electrical Engineering from Duke University.
Dr Gregory N. Stock is the corresponding author and can be contacted at: gstock@uccs.edu
Kathleen L. McFadden is a Dean’s Distinguished Professor of OM&IS in the Department of
Operations Management and Information Systems at Northern Illinois University. Her research
interests are in the area of healthcare operations, aviation safety, quality management, and process
improvement. Her research has been published in a number of academic journals including the Journal
of Operations Management, International Journal of Operations and Production Management,
International Journal of Production Research, International Journal of Production Economics, Quality
Management Journal, and Health Care Management Review. She has worked as a Consultant and
Contract Researcher for the Federal Aviation Administration, and has served as an expert witness.
For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
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Journal of Service Management

Improving service operations: linking safety culture to hospital performance

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Literature review and conceptual model

Dependent variables Description

code by zip code)

Study sample Non-HSOPS respondent hospitals

Mean SD Mean SD t-statistic

Patient safety performance Process quality Patient satisfaction

Government owned −0.05 −0.04 0.03 0.02 0.17 0.16

Limitations and future research

Appendix 1. Hospital Acquired Condition (HAC) reduction program measures

Total HAC Score ¼ ð0:35 4Þ þ ð0:65 8Þ ¼ 1:4 þ 5:2 ¼ 6:6:

Appendix 2. Value-based purchasing program (VBPP) measures

Patient experience of care domain

(5) communication about medication;

Composite dimension Item

Teamwork within units 1. People support one another in this unit

Variable Overall perceptions of patient safety

Government owned 0.02

We are actively doing things to improve patient safety 0.86

Region 8 0.01 −0.03 −0.11

About the authors

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