| This dissertation sought to identify health care organizations' costs to control quality. A central tenet of my argument is that quality is, at its core, the result of a series of transactions among members of a diverse network. A corollary to this argument is that key functions of management in a health care organization (or, for that matter, in any organization) are to oversee the aforementioned transactions, to ensure that they are completed efficiently and effectively, and in so doing, to assure a minimum standard of quality in all aspects of the organization's operations. Thus, if one can identify the resources expended on the managerial control function, one has made significant progress toward determining the organization's cost to control quality.; Unfortunately, the ubiquity of managerial activities is such that identifying and assigning costs to all control-oriented activities would be prohibitively expensive. To counter this problem, I employ transaction cost economics (TCE) to narrow the scope of managerial control activities that must be analyzed. Simultaneously, I use an emerging accounting methodology, activity-based costing (ABC), to operationalize the transaction costs. ABC differs from conventional accounting practices because it establishes a causal relationship between organizational activities and the products or services produced; thus, combining ABC and TCE not only allows accurate measurement of organizations' quality control costs, but also links those control costs to specific outputs (e.g., cardiac catheterization, laboratory services, appendectomies). The information generated by the ABC-TCE methodology helps management to differentiate between the activities that add value to goods and services and those that do not. Taken together, the insights afforded by pairing the analytic power of ABC with the theoretical implications of transaction cost economics suggest exciting possibilities for health services research, policy, and practice. |
