2016 INFORMS Annual Meeting Program

194 / 561

INFORMS Nashville – 2016
194
3 - Using Patient-centric Quality Information To Unlock Hidden
Health Care Capabilities
Guihua Wang, Ross School of Business, University of Michigan,
Ann Arbor, MI, 48105, United States,
Jun Li, Wallace J Hopp
We document a wide variation in quality among 188 surgeons at 35 hospitals in
New York state that perform mitral valve surgery. Our analysis shows that
patients of different demographics and levels of acuity benefit differently from
elite surgeons. In this paper, we develop an approach for computing patient-
centric information from outcome data and evaluate the potential health benefits
from using such information to guide patients to surgeons. We estimate that the
total societal benefits from using patient-centric information are comparable to
those achievable by enabling the best surgeons to treat 40% more patients under
population-average information.
4 - Evidence Of Upcoding In Pay-for-Performance Programs
Hamsa Sridhar Bastani, Stanford University, Stanford, CA,
United States, , Joel Goh, Mohsen Bayati
Medicare has sought to improve patient care by penalizing providers for hospital-
acquired infections (HAIs). However, these efforts may be undermined if
providers upcode, i.e. mis-report HAIs (possibly unintentionally) to increase
reimbursement. Identifying upcoding is challenging due to unobservable
confounders. We exploit state-level variations in adverse event regulation and
instrumental variables to estimate that over 10,000 infections (nearly 15%) are
upcoded each year, resulting in an added cost of $200 million. Our findings
suggest that increasing financial penalties alone may not reduce HAI incidence.
We make several policy recommendations accordingly.
MC35
205A-MCC”
Empirical Research in Services
Sponsored: Manufacturing & Service Oper Mgmt, Service
Operations
Sponsored Session
Chair: Qiuping Yu, Indiana University, Kelley School of Business,
Bloomington, IN, 47405, United States,
Co-Chair: Gad Allon, Professor, Kellogg School of Management,
2001 Sheridan Rd, Evanston, IL, 60208, United States,
1 - Understanding Customers Retrial In Call Centers: Preference Of
Service Quality And Service Speed
Kejia Hu, Kellogg School of Management, Northwestern
University,
Gad Allon, Achal Bassamboo
In this paper we want to understand retrial by connecting customers decisions
with their preferences on service aspects: the speed in service access and the
quality in service delivered. We use a dynamic random-coefficient structural
model along with observations in a call center to capture customers behavior. Our
results suggest different preferences for service speed and service quality exist
across different customer segments. Using counterfactual analysis, we suggest two
cost-effective strategies to reduce retrial. Our new service system design increases
private customer welfare by 8.91% and business customer welfare by 37.6%.
2 - The Reference Effect Of Delay Announcements:
A Field Experiment
Qiuping Yu, Assistant Professor, Kelley School of Business,
Indiana University, Bloomington, IN, 47405, United States,
Gad Allon, Achal Bassamboo
We empirically explore whether delay announcements induce the reference effect
and customers’ loss aversion in a field experiment approach. We find that
customers exhibit loss aversion, whether they are provided with announcements
or not. Moreover, providing delay announcements appears to impact customers’
reference points and may reduce customers’ per unit waiting cost compared to
the case when announcements are not provided.
3 - When You Work With A Super Man, Will You Also Fly?
An Empirical Study Of The Impact Of The Coworkers On
Workers’ Performance
Tom Tan, Cox School of Business, Southern Methodist University,
, Serguei Netessine
We examine a large operational data set in a casual restaurant setting to study
how coworkers’ sales ability (measured as servers’ sales premium) affects
workers’ performance in terms of service speed and service quality. We find that
servers react non-linearly to their coworkers’ ability. Our empirical findings imply
that managers should mix servers having heterogeneous ability levels during the
same shift. Through a counterfactual analysis, we find that considering the
inverted-U-shaped peer effects to optimize current servers’ schedules without
changing their capacity may increase total sales by 2.7%.
4 - Responsiveness And Learning In The Medical Device Product
Recall Process
George Ball, Kelley School of Business, Indiana University,
Rachna Shah
Product recalls move through multiple steps in a firm. Deciphering the impact of
moving fast or slow can help unravel the complexities associated with product
recalls and reveal the impact of learning on future recalls. We investigate recall
responsiveness with unique data obtained from the Food and Drug
Administration consisting of over 4,000 medical device recalls from 2003 to 2013.
We find that moving too quickly to identify root cause and corrective action may
hamper learning, and lead to additional future recalls. We also find that the speed
at which the firm opens a recall is not associated with future recalls, supporting
the view that firms should move quickly to recall risky products.
MC36
205B-MCC
Incentive Design in Marketing and Operations
Sponsored: Manufacturing & Service Oper Mgmt, Supply Chain
Sponsored Session
Chair: Tinglong Dai, Johns Hopkins University, Baltimore, MD,
United States,
Co-Chair: Kinshuk Jerath, Columbia University, 3022 Broadway,
New York, NY, 10027, United States,
1 - Salesforce Compensation With Network Effects
Hemant Bhargava, University of California, Davis,
Olivier J Rubel
This paper examines the management problem of “selling” platforms, i.e.,
designing appropriate salesforce management and incentives schemes to obtain
participation by paying customers. The paper shows that network effects increase
not only the mean, but also the variance of the performance metrics used to
compensate sales agents.
2 - Salesforce Contracting Under Yield Uncertainty
Tinglong Dai, Assistant Professor, Johns Hopkins University,
100 International Drive, Baltimore, MD, 21202, United States,
, Kinshuk Jerath
We consider a scenario in which a firm hires a salesperson to market a product
with uncertainty in both demand and supply. We build a principal-agent model of
the above situation and study the optimal structure and timing of the contracts,
and obtain a number of interesting results. We find that bonus contracts are
optimal in both cases, and the bonus may be higher if the yield is lower. Our
paper also provides interesting insights into optimal timing of salesforce
contracting. For example, we find that when it is difficult to infer marketing effort
from observing the sales outcome, it may be in the best interests of the firm to
contract with the salesperson before the inventory information becomes available.
3 - Long-term Versus Short-term Contracting With Effort Shifting
Fei Long, Columbia University, New York, NY, United States,
Kinshuk Jerath, Fangruo Chen
We investigate multi-period contracts to understand agents’ gaming in terms of
effort shifting, and what is a firm’s best response. We model a risk-neutral
principal employs a risk-neutral agent with limited liability to exert unobservable
effort to increase demand over two periods. We find that the principal may find it
optimal to use either a short-term plan paying at each period, or a long-term plan
paying at the end that concentrates rewards at a single output level. Under
limited liability, the latter one provides larger incentives compared to the former,
but it suffers from agents’ effort shifting. We extend to a case when the inventory
is limited and find it makes the short-term plan more preferred.
4 - Who Compensates The Sales Agent?
Duo Shi, PhD Student, Washington University in St. Louis, KH
401, Olin Business School, 1 Brookings Drive, Saint Louis, MO,
63130, United States, , Panos Kouvelis
We analytically study a value chain consisting of three segments: a manufacturer,
a retailer, and a sales agent. Five distinct value-chain structures are considered: an
integrated value chain, an integrated distribution channel (the manufacturer and
the retailer) compensating the sales agent, non-integrated channels with the
manufacturer compensating the sales agent, with the retailer compensating the
sales agent, and with joint compensation. We compare the strategic implications
across all these value-chain structures.
MC35