Does procedural fairness matter in standardization? An examination of a drug standardization process in hospitals and its impact on hospital effectiveness

In this study, I explore the degree to which procedural fairness determines responses to bureaucratic standardization. I examine this question in the context of drug formularies in hospitals. Drug formularies are a list of drugs available to physicians in a healthcare organization, and represent a standardization of the drug choices available to physicians. While some proponents advocate the use of drug formularies as cost-effective management, critics see the use of formularies as potentially harmful to patients and as an infringement on the clinical autonomy of physicians, thereby ultimately contributing to poorer quality and/or higher costs of patient care. Drawing on organizational justice theory, I examine the role of procedural fairness in shaping the effectiveness of bureaucratic standardization. In conclusion, I argue that the effect of drug formularies on organizational effectiveness depends on the degree to which the process of setting and implementing formulary policies is deemed fair by those individuals who use these formularies.; Theoretically, this study contributes to the extension of procedural justice from its more traditional micro level formulation to the organization level. Rather than focusing on social psychological measurements of fairness and its outcomes, this study studies the structural features of procedural justice and their organizational consequences. From a practical point of view, understanding the conditions under which formulary standardization leads to organizational effectiveness is potentially an important means of improving the cost-effectiveness of the healthcare delivery system. The knowledge gained will help healthcare organizations and policy makers to design formulary standards that enhance, rather than undermine, organizational effectiveness.