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Paying for Quality: Current Models and Potential Impact
Get PDFA decade of quality measurement and reporting suggests that poor quality is pervasive in the U.S. health care system.
Neither the recognition of system wide quality problems nor public reporting of comparative quality across health plans,
hospitals, and physicians has resulted in substantial changes in practice patterns. Some have argued that such change will
not materialize as long as providers do not see a direct financial reward from achieving higher quality. Opponents of paying
for quality argue that use of financial incentives will be demoralizing to providers or that financial incentives will be weak
instruments for motivating providers to change long-standing practice patterns. Despite the lack of consensus about the
potential impact of paying for quality, many U.S. health plans and employers have introduced payment incentives that
target health care quality measures in the past several years. I review these efforts in the light of economic theory and
evidence on both the intended and unintended consequences of using financial incentives to improve performance
An Economic Framework for Evaluating Personalized Medicine
Get PDFIndividual variation accounts for a wide range of medical and economic consequences, from inefficiencies in drug
discovery and development to ineffectiveness of drug treatment to drug-induced morbidity and mortality. Addressing these consequences could benefit patients, health care providers and payers, and the pharmaceutical industry. When appropriate markers are known, diagnostic tests allow precise diagnosis and dosing, prediction of disease progression, prediction of treatment response and prediction of adverse drug reactions for individual patients. There may also be substantial savings
realized by eliminating costs associated with failed treatment. We developed an analytical framework for analyzing the potential value of using a diagnostic test in clinical practice. Our framework determines the economic consequences of implementing pharmacogenomics in the clinic using a diagnostic test to predict drug response. We offer an empirical test of these ideas: we calculated the cost offset realized by predicting the likelihood of response to an alternative existing treatment using a hypothetical pharmacogenomic test in an asthma population. Because the diagnostic test is hypothetical, our framework is general and could be applied to other indications where diagnostic tests have not been developed. Our results could potentially guide future economic evaluation of new diagnostic tests. Importantly, they may also influence biomarker discovery strategies to ensure consistency between market priorities and the future stream of product introductions
The Risky Business of Hiring Stars
Get PDFAn in-depth study of 1,052 star stock analysts who worked for 78 investment banks in the United States from 1988 to
1996 finds that when a company hires a star, the star’s performance plunges, there is a sharp decline in the functioning of
the group or team she works with, and the company’s market value falls. Moreover, stars don’t stay with the organizations for
long. For all those reasons, we conclude that companies cannot gain a competitive advantage by hiring stars from outside
the business. Instead, they should focus on growing talent within the organization and retain the stars they develop
Investing in Infrastructure in Developing Regions: Innovative Strategies and Policies
Get PDFRecent innovations in technology and policy are significantly increasing access to basic telecommunications services in the developing world. For example, in many developing countries, there are now more wireless lines than fixed lines; for many new subscribers, their mobile phone is their first and only phone. This dramatic growth in connectivity is due partly to the advantages of wireless technologies in fast deployment of new networks, but perhaps more to the innovations in regulation and policy that have fostered investment. Where countries have introduced competition in wireless/mobile services, rates
have come down, and wireless carriers have introduced features such as rechargeable cards and inexpensive text messaging. The result has been dramatic growth in access to basic communications.
However, access to the Internet is still very limited in most developing regions, and broadband is almost nonexistent. Where access is available, the price is often beyond the means of most potential users and bandwidth is extremely limited, severely hampering exploitation of the Internet’s potential for social and economic applications – in commerce, education, health, and other services. This paper will examine how technological and regulatory innovations might increase Internet access and bridge the broadband divide. For example, new technologies such as Wi-Fi are being used in industrialized countries to establish "hot spots" for high-speed access in businesses and cyber cafés. This approach may be more attractive
in terms of cost and fast deployment than wireline or cable. Fixed wireless may also be used to extend last mile access. Small satellite terminals (VSATs) may be the least cost solution in isolated and remote areas.
Yet access to the backbone network may still be expensive unless regulatory policies that allow or even foster competition in the national network. At the local level, competition is needed so that users can choose an alternative to the incumbent network such as a VSAT or wireless network. The paper will also examine how targeted subsidies may be used to increase broadband access. A policy of providing discounts or other funding to end users may be more effective than the more traditional policy of subsidizing the carrier of last resort. This model has been successfully used in the U.S., where schools, libraries, and rural health centers are empowered through universal service subsidies to solicit bids for services from carriers.
The paper will conclude with a summary of lessons learned from these innovations in technology and policy that could
help to accelerate access to affordable and reliable Internet access in developing regions
Improving Labor Standards in the Apparel Industry: Can Government Make a Difference?
Get PDFThis paper examines patterns of compliance with federal minimum wage laws in the U.S. apparel industry and analyzes
the impact of new methods of intervention designed to improve regulatory performance. Specifically, in 1996, the U.S. Department of Labor began to use pressure arising from its statutory ability to interrupt the flow of goods in the retail apparel supply chain as a means of gaining manufacturer agreement to monitor its network of contractors. Drawing on contractor-level data from a randomized survey of apparel contractors, the paper evaluates the impact of these agreements between manufacturers and the government used to monitor contractor behavior. Non-compliance is significantly correlated with characteristics predicted by theory including employer size, skill content, and the elasticity of labor and
product demand. Nonetheless, stringent forms of contractor monitoring are associated with significant reductions in the
presence, incidence, and severity of violations of minimum wage standards. The results suggest that well-designed private/public monitoring efforts can lead to significant improvements in regulatory performance. This has implications beyond apparel and to any number of industries where supply chain dynamics have become important
Time Value of Commercial Product Returns
Get PDFOnce lightly regarded, the flow of product returns has become a significant concern for many manufacturers. For
products, such as PCs, whose value deteriorates rapidly with time, the increasing rates of return from on-line sales have elevated the need for effective reverse supply chain designs. Products lose value in the return stream in two important ways: first, their value diminishes during time delays while awaiting evaluation, repair or refurbishing; second, losses can be incurred through erroneous disposition decisions due to incorrect assessments of the product’s value over time. Using field
data for several consumer electronics products, we build analytical models to capture the economic value of a time-sensitive product over its life cycle and then use these models to develop supply chain designs that maximize value recovered from the return steam. We show that the returned product’s "time value" is a critical design parameter
Risks of International Projects: Reward or Folly?
Get PDFAssessing and managing risk is a complex and critical task for international construction projects that support new
business ventures. Indeed, it could be argued that the word "risk" and the term "international projects" could be used
interchangeably. Driven by such factors as new markets, domestic competition, and trade liberalization, U.S. owners and contractors have in recent years aggressively pursued international business opportunities and projects. International work requires owners to assess a diverse set of political, geographic, economic, environmental, regulatory, and cultural risk factors when contemplating an international capital project. In addition, contractors must consider a similar set of risk factors in determining whether to undertake such projects, and how to price and schedule the work if they do. A limited amount of research has been undertaken to address these issues, and current efforts to assess and evaluate the risks associated with
international construction are fragmented and fail to provide adequate assistance to project managers. Can risks be systematically addressed and mitigated on these types of projects or is it folly to attempt this process?
This paper will report the results of a research project focused on international projects sponsored by the Center for Construction Industry Studies (CCIS), the Construction Industry Institute (CII) and the Project Management Institute (PMI). This research included input from over 100 industry experts representing 58 organizations. Data from 65
international projects, with a total cost of approximately $27 billion (U.S.) were analyzed. Key risk issues and a
management approach to help mitigate risks will be presented. Included in that discussion will be the International Project Risk Assessment (IPRA) tool developed in collaboration with industry. This management tool provides a systematic method to identify, assess, and determine the relative importance of international-specific risks across the project’s life cycle. The reward of risk management on international ventures will be explored. How industries other than construction can gain from this research will be outlined
Supplier Development at Honda, Nissan and Toyota: Comparative Case Studies of Organizational Capability Enhancement
Get PDFWhat factors facilitate and constrain the sustained development and replication of organizational capabilities at suppliers?
This question is addressed in a comparison of historical case studies at Toyota, Nissan and Honda in Japan. First, as
expected, replication difficulty is overcome by enabling companies to share the practice, rather than the representation, of
tacit knowledge. Second, the interdependence in the hierarchy of routines, that constitute organizational capabilities, has
led companies to broaden the scope of supplier development over time. Third, this broadening challenges suppliers to accept
customer companies’ intervention in internal investment decisions, requiring a certain mode of corporate governance. It is
argued that the boundary of a capability-based firm may go beyond legally distinct units of financial control when firms are
subjected to a cumulative process of capability enhancement
Varieties of Vertical Disintegration: The Global Trend Toward Heterogeneous Supply Relations and the Reproduction of Difference in US and German Manufacturing
Get PDFAs is well known, there is a global trend toward vertical disintegration in manufacturing. Large manufacturing firms,
across a broad array of industrial sectors, are radically reducing the amount of their product that they both produce and design themselves. Instead they are turning to suppliers for key design, component, and even system in-puts. This shift has created a great deal of business for specialized suppliers in a vast array of areas throughout the global manufacturing economy. But it has also created an entirely new and challengin--often quite contradictory--terrain of relations between suppliers and their customers. Our claim in this chapter is that rlations between suppliers and customers in manufacturing are becoming systematically more heterogeneous within all advanced industrial societies. Further, this global trend is
exacerbated by the diversity of institutional architectures and production practices in different political economies. In making this argument, we show that neither neo-liberal nor particular forms of institutionalist arguments (in particular the Varieties of Capitalism perspective) adequately capture current global dynamics in manufacturing
Strategic Research Connections: Implementing Funding Policy in a Dynamic Network
Get PDFSince the early phone book experiments that produced the term "six degrees of separation," renewed interest in network theory ranges from sociology and organizational management to economic development and new economic geography. More formal ‘small world’ studies today underline the importance for an agent to navigate a network efficiently to accomplish, say, a successful job search. Fieldwork has produced a wealth of network data and data collection protocols that grow in sophistication continuously. Lagging behind are proactive analytic tools that use this data to locate strategic connections among network agents to leverage better outcomes, such as applied research output.
This work employs a network map of collaborations among venture capitalists in Silicon Valley to locate unexploited
strategic connections. From the literature, we test several rules suggested as to how network connections might evolve,
simple rules in the style of cellular automata and compare connection choice strategies from the static structure alone. One strategy may be especially attractive. A "smart small world" policy robustly achieves two ends: it improves overall output and flattens the informal hierarchy of the network to improve connectivity and increase competition. Since the smart small world strategy does not require any form of dynamic optimization or programming, but relies on the field data directly, it is more accessible to policy-makers and other social sciences. We test the rule on a research network we are still creating for an emerging technology in the pulp and paper industry. The very first initial connection located a divide between European and North American researchers that participating scholars readily recognize as a concern, providing a face validity test of the program