Vol. 0, No. 0, xxxx–xxxx 2017, pp. 1–12 DOI 10.1111/poms.

12758
ISSN 1059-1478|EISSN 1937-5956|17|00|0001 © 2017 Production and Operations Management Society

The Impact of Internal Service Quality on Preventable

Adverse Events in Hospitals
Sarah Zheng
Ithaca College School of Business, 953 Danby Rd, Ithaca, New York 14850, USA, szheng@ithaca.edu

Anita L. Tucker, Z. Justin Ren, Janelle Heineke

Boston University Questrom School of Business, 595 Commonwealth Avenue, Boston, Massachusetts 02215, USA,
altucker@bu.edu, ren@bu.edu, jheineke@bu.edu

Amy McLaughlin, Aubrey L. Podell

Performance Improvement Operations, Lahey Health System, 25 Mall Road, Burlington, Massachusetts 01803, USA,
Amy.McLaughlin@lahey.org, Aubrey.Podell@lahey.org

rovision of safe, timely care to hospital patients requires services from multiple support departments, such as envi-
P ronmental services and pharmacy. However, few studies have examined the impact of the service quality of internal
support departments on clinical performance. The lack of studies linking internal service quality (ISQ) to clinical perfor-
mance creates a gap in healthcare operations management theory and—from a practice standpoint—might contribute to
underinvestment in the quality of services delivered by internal support departments. To address these issues, we test
whether higher ISQ is associated with a lower rate of adverse events. We leverage a unique dataset from a hospital that
developed a measure of ISQ provided by support departments. Using over a year’s worth of monthly data on the average
ISQ delivered by 11 support departments to five nursing units, we test the impact of ISQ on two nursing-sensitive adverse
events: patient falls with injury and hospital-acquired pressure ulcers. We find support for our hypothesis that higher
levels of ISQ are associated with lower rates of adverse events, controlling for patient acuity and other confounding fac-
tors. Our results show that improving the overall average ISQ received by a nursing unit by 0.1 on a 5-point scale has
almost the same benefit for reducing adverse events as would increasing staffing on that unit by one full-time equivalent
nurse. Our study has important implications for theory and practice as it points to a fruitful, cost effective, and yet
underutilized avenue for reducing adverse events experienced by hospital patients.

Key words: internal service quality; panel data; healthcare; adverse medical events
History: Received: March 2016; Accepted: July 2017 by Sergei Savin, after 3 revisions.

internal supply chains that are integrated with pro-

1. Introduction
Improving the safety of hospital care remains a
national priority, despite over a decade of improve-
ment efforts (Wachter 2010). In 2013, the Institute of
Medicine advocated incorporating principles from
operations management (OM) to improve the quality
of care (Smith et al. 2013). These principles can help
improve patient safety—even if the best clinical prac-
tices are already in place—because they improve the
processes through which health care is delivered
(McFadden et al. 2006, Smith et al. 2013).
One OM principle that may be useful in improving
patient safety is the integration of internal supply
chains with service delivery. Internal supply chains
provide frontline workers with the materials and
equipment needed to serve customers (Tucker et al.
2014). Industrial studies suggest that reliable, efficient
duction yield better financial and quality performance
for manufacturing companies (Droge et al. 2004,
Flynn et al. 2010). We believe that service organiza-
tions stand to reap similar benefits. In health care,
internal support departments (e.g., biomedical equip-
ment and environmental services) comprise the inter-
nal supply chain (Fredendall et al. 2009). Poor
performance by support departments may result in
operational failures on nursing units, which in turn
cause nurses to engage in workarounds that keep
nurses’ from patient bedsides and delay patient care
(Tucker 2016, Tucker et al. 2014). Increased nursing
time per patient is associated with better patient out-
comes, such as lower patient mortality (Aiken et al.
2002). However, there is scant quantitative research
testing the impact of support departments in hospitals
on patient safety outcomes (Fredendall et al. 2009,

Please Cite this article in press as: Zheng, S., et al. The Impact of Internal Service Quality on Preventable Adverse Events in Hospitals.
Production and Operations Management (2017), https://doi.org/10.1111/poms.12758
 Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
2 Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society
Tucker et al. 2008). Therefore, we know little about
the extent to which support departments impact
patient safety outcomes. Without quantifiable evi-
dence of the impact of non-clinical departments on
patient’s clinical outcomes, these departments might
be overlooked in models of error causation and conse-
quently be under-resourced.
The lack of research on hospitals’ internal service
quality (ISQ) may stem from the fact that few
hospitals routinely collect and retain data on the per-
formance of internal support departments. Conse-
quently, there is little quantitative data available to
test the impact of ISQ on patient safety metrics, such
as adverse events. (A notable exception is KC and
Terwiesch 2009). This is an important omission
because adverse events have serious consequences for
patients and hospitals. Adverse events are instances
when a patient suffers harm, not from his underlying
medical condition, but as a consequence of medical
treatment (Levinson and General 2010, McFadden
et al. 2006). Adverse events are not always pre-
ventable, and do not necessarily involve clinician
error or negligence (Levinson and General 2010, p. 3).
Nonetheless, Medicare considers some adverse
events—such as patient falls with injury and unit
acquired pressure ulcers, which we study in this
study—as hospital-acquired conditions for which it
denies payment (Levinson and General 2010).
In this study, we leverage a novel longitudinal
dataset from a hospital that developed a measure of
ISQ. We combine this data with unit-level, monthly
measures of patient falls and pressure ulcers to test
the impact of ISQ on adverse events. Most healthcare
operations research has relied on publicly available,
hospital-level outcomes, such as patient mortality
and readmissions (e.g., KC and Terwiesch 2011,
Senot et al. 2015)—which are blunt measures of qual-
ity—or process of care measures (e.g., Boyer et al.
2012, Gardner et al. 2015, Senot et al. 2015), which
have been criticized in the healthcare literature for
their weak connection to clinical outcomes (Patterson
et al. 2010). We find strong support for our hypothe-
sis that higher levels of ISQ are negatively associated
with adverse events. Our study makes a theoretical
contribution to the healthcare operations literature
by demonstrating a link between ISQ and adverse
events, which to our knowledge has not been shown
previously. We find that improving the overall aver-
age ISQ received by a nursing unit by 0.1 on a 5-
point scale has roughly the same benefit for reducing
adverse events as increasing staffing on that unit by
nearly one full time equivalent (FTE) nurse. From
theory and practice standpoints, our results highlight
the importance of focusing on the supply of materi-
als and equipment to nursing units—which are often
delivered by non-clinical departments—as a viable
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Production and Operations Management (2017), https://doi.org/10.1111/poms.12758
and cost-effective means to improve clinical
outcomes.
2. Prior Research Related to ISQ and
Adverse Events
In healthcare settings, low ISQ from support depart-
ments causes operational failures on nursing units
(Tucker et al. 2014), which in turn interrupt patient
care and waste nurses’ time via workarounds, such as
searching for equipment and materials (Beaudoin and
Edgar 2003, Fredendall et al. 2009, Sobek and Jimmer-
son 2003, Tucker 2004, 2016). Observational studies
find that workarounds caused by operational failures
erode up to 10% of nurses’ days (Tucker 2004). OM
scholars recognize that clinicians who have the
required materials for patient care should be able to
provide higher quality care than clinicians who have
to spend time searching for equipment and materials
(Fredendall et al. 2009, Mazur and Chen 2009, Sobek
and Jimmerson 2003). Similarly, nurse researchers
emphasize the importance of nurses being able to
spend time at patients’ bedsides because it enables
nurses to observe changes in patients’ medical condi-
tions, provide treatment, and aid patients with activi-
ties such as toileting (Hendrich et al. 2008). Studies
show that when nurses spend less time at the bedside,
patients suffer negative outcomes, such as higher
rates of mortality and readmissions (Aiken et al.
2002).
Increasing nurses time at the bedside is an impor-
tant objective, and is the subject of a national initiative
(Rutherford et al. 2004). One reason that nurse time at
the bedside is important is because nurse vigilance,
such as noticing whether a patient’s skin is beginning
to break down signaling the need to begin treatment
to prevent pressure ulcers, is an important driver of
quality of care (Lake and Cheung 2006). However, a
study of hospital nurses wearing radio-frequency
identification tags (RFID) finds that nurses spend a
higher percentage of their time at nursing stations
doing documentation and care coordination activities
(43%) than in patient rooms (38%), and only 20% of
their time is spent on direct patient-care activities
(Hendrich et al. 2008). Thus, it is imperative to find
levers to increase the time nurses spend at patients’
bedsides providing patient care.
We propose that high ISQ can indirectly increase
the time available for patient care by minimizing
operational failures, which in turn trigger work-
arounds, reducing nurses’ time available to observe
and care for patients. Prior studies in the medical lit-
erature suggest the possibility that there is an indirect
link between ISQ and patient outcomes, but stop short
of testing the link (Beaudoin and Edgar 2003, Gurses
and Carayon 2007, Hendrich et al. 2008, Manias et al.
Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society
2002, Tucker et al. 2014). Furthermore, most papers
are descriptive in nature (Fredendall et al. 2009,
Sobek and Jimmerson 2003) or use perceptual mea-
sures of performance (Mazur and Chen 2009), which
limit their ability to engage in hypothesis testing.
Therefore, longitudinal, quantitative research is
needed to rigorously quantify the relationship, if any,
between ISQ and objective patient outcome measures,
such as adverse events.
Our study is one of the first to explicitly test
whether there is a link between ISQ and objective
measures of quality of care. In particular, we are inter-
ested in the relationship between ISQ and two types
of adverse events: patient falls and pressure ulcers.
Patient falls and pressure ulcers are classified as nurs-
ing-sensitive adverse events because they are primar-
ily determined by the quality of nursing care
delivered to patients rather than by the patient’s
underlying disease (Lake and Cheung 2006). To fur-
ther illustrate the indirect link between ISQ and
adverse events, if nurses have to spend time tracking
down missing medications due to low ISQ from the
pharmacy, they are unable to be as involved with
patient care as they otherwise might be. Some patients
risk falling if they get up to do something for them-
selves because their nurse is unavailable (Hitcho et al.
2004). Similarly, if nurses repeatedly have to spend
time searching for working vital sign monitors, they
may forget to (or run out of time to) reposition low-
mobility patients in their beds every two hours (Spear
and Schmidhofer 2005). Repositioning immobile
patients every two hours is essential to prevent skin
breakdown (Lake and Cheung 2006). Thus, our theo-
retical model is as follows: low ISQ results in opera-
tional failures, which trigger interruptions and
workarounds that erode time available for nurses’ pri-
mary functions of vigilance, treatment, and assistance,
which ultimately can cause higher rates of patient
falls and pressure ulcers on the unit. For brevity, we
will refer to this mechanism as ISQ reducing nurses’
available time at the bedside, which then leads to
adverse events.
Despite the theoretical, indirect connection between
ISQ and adverse events, related literature is inconclu-
sive. Lake and Cheung’s (2006) review of research
testing the impact of nurse staffing on patient falls
and pressure ulcers finds mixed results. Some studies
show that higher levels of staffing result in fewer
adverse events, while other studies fail to support this
relationship. Lake and Cheung (2006) conclude that
more research is needed on the topic. It may be that
the effectiveness of high nurse staffing levels is
eroded if there are high numbers of operational fail-
ures stemming from poor ISQ. The moderating role of
operational failures and workarounds could therefore
blur the empirical relationship between staffing levels
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Production and Operations Management (2017), https://doi.org/10.1111/poms.12758
3
and adverse events. For this reason, it may be useful
to explicitly test the link between ISQ and adverse
events. Given the prevalence of adverse events and
the potential severity of the consequences for patients
(Institute of Medicine 2000, Leape et al. 1991, Wachter
2010), and reduced reimbursements for hospitals
(Levinson and General 2010), the link between ISQ
and adverse events is an important area of study. For-
mally, we hypothesize that higher levels of ISQ will be
associated with lower rates of nursing-sensitive adverse
events.
3. Methods
3.1. Data and Sample Size
To test our hypothesis, we compile a dataset at the
level of the “nursing-unit month” using multiple
databases internal to a major medical center with over
300 beds that serves as a teaching hospital and is part
of a network of leading hospitals located in the Boston
area. The dataset has 104 observations from March
2013 to March 2014 from 8 inpatient units. We exclude
three units (one pediatric unit, one labor and delivery
unit, and one mother and baby unit) because they do
not have data on patient falls and pressure ulcers. In
calculating our summary statistics and in running our
analyses, we also exclude six unit-months for a surgi-
cal unit that had no ISQ data for those months. The
final dataset is an unbalanced panel with 59 hospital
unit-months in total. There are 13 months for each of
four units (medical, surgical, cardiovascular and can-
cer) and 7 months for the surgical unit that has miss-
ing data. Having data from multiple units in a single
hospital has the benefit of holding constant poten-
tially confounding variables, such as information
technology, that would differ if our dataset was
instead across several hospitals (Gardner et al. 2015).
3.2. Variable Definition
3.2.1. Internal Service Quality. We measure ISQ
at the nursing-unit level, using a survey instrument
called SupportCard.TM The hospital’s leadership team
developed the instrument in 2003 with the belief that
nurses need to receive excellent service from their
internal suppliers in order to provide excellent service
to patients. The hospital maintained the program for
over a decade due to senior leadership’s commitment
to it, but until this study, had not tested its impact.
ISQ data are generated as follows. The unit man-
ager and the charge nurses, a group we call unit lead-
ership, hold daily meetings with the nurses during
shift changes. During these meetings, unit leadership
explicitly gathers feedback about the quality of
service provided by each of the 11 support depart-
ments: Biomedical Engineering, Engineering/Facili-
ties, Environmental services, Equipment, Food
 Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
4 Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society
Services, Information Systems, Linen, Pharmacy, Sup-
plies, Transport and Laboratory Services. At the end
of the week, unit leadership compiles this information
into the computerized survey instrument. Thus, the
ISQ data reflect the collective experiences of nurses
on that unit that week. More explicitly, using a scale
from 1 (never) to 5 (always) for each of the support
departments, unit leadership summarizes the week’s
performance on five dimensions of service quality:
accessibility, accuracy, attitude, timeliness, and opera-
tions. Although these data are subjective, prior
research on nurse evaluations of hospital perfor-
mance has found that their perceptions closely match
objective measures of performance, ameliorating
methodological concerns about nurses’ ability to
accurately perceive performance (Singer et al. 2009).
For a more detailed description of the five dimensions
of ISQ, see Table 1.
The five dimensions of ISQ (e.g., accuracy, timeli-
ness, etc.) delivered to a nursing unit by a specific
support department are averaged together to provide
a weekly overall measure of ISQ by each support
department. Each of the five dimensions receives an
equal weighting in the calculation of the mean. The
hospital then further aggregates the data by averaging
weekly data within a month for each nursing unit.
Thus, each nursing unit has 11 monthly average ISQ
scores, one for each support department. This is the
dataset we have available for analysis.
We test the validity of using the mean of the five
dimensions as a single independent variable. To do
this, we obtain an additional dataset of quarterly data
from April 2013 to April 2014 (5 quarters) on the sepa-
rate ISQ scores for each of the five dimensions for
each support department, aggregated to the hospital
level. In total, we have 55 data points for each dimen-
sion of ISQ (n = 5 quarters 9 11 support depart-
ments = 55). We conduct a principal components
factor analysis of this dataset. All five dimensions of
Table 1 Internal Service Quality Dimensions
Dimension Survey questions
Accessibility The service is easily accessible through various channels
(telephone, pager, electronic systems, etc.) and is
available when needed. If not, there is appropriate follow
through on the service request
Accuracy Ability to perform promised service dependably and
accurately. The service is performed right the first time
Attitude The service is performed with professional courtesy,
politeness, and mutual respect and consideration
Timeliness The service is performed within the expected time frame.
Ability to quickly adjust to sudden, unforeseen service
request
Operations Were day-to-day operations able to run efficiently and
effectively as a result of the Support Department service?
Rating Scale: 5: Always, 4: Usually, 3: Sometimes, 2: Rarely, 1: Never.
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Production and Operations Management (2017), https://doi.org/10.1111/poms.12758
ISQ load onto a single factor as only that factor has an
eigenvalue that exceeds one (Jolliffe 2002). This factor
accounts for 93.38% of the variance of the five ISQ
dimensions, and the factor loadings of all five ISQ
dimensions are greater than 0.93. (See Appendix A:
Table A1 for a table with the factor loadings). This
result validates the appropriateness of using a single,
aggregated measure of ISQ rather than using each
dimension as a separate independent variable. Fur-
thermore, the Cronbach’s alpha of the five ISQ dimen-
sions is 0.98, which is extremely high, providing
additional validation for the aggregation of the five
dimensions into a single measure of ISQ (Cronbach
1951).
Finally, for our analyses, we average ISQ across the
11 support departments. We do this because the high
correlations (q > 0.67, Appendix A: Table A2) among
ISQ scores across the departments prevent us from
including them as separate variables in our regression
due to multicollinearity concerns.
3.2.2. Adverse Events. “Adverse event rate per
1000 patient days” is a rate variable that is the sum
of patient falls with injury that month divided by the
number of patient days on the unit that month,
which is then multiplied by 1000. Similarly, “hospi-
tal-acquired pressure ulcers per 1000 patient days” is
calculated as the sum of patients who got a pressure
ulcer on the unit that month, divided by the number
of patient days on the unit that month, multiplied by
1000. The hospital collects these data monthly. The
adverse event data come from both patient record
reviews and incident reports in the hospital’s safety
reporting system (Lake and Cheung 2006). The error
event data are audited internally as well as reported
to the Centers for Medicare and Medicaid Services.
We use unit-level adverse event data from the hospi-
tal as opposed to hospital-level adverse event data
because doing so enables us to match the unit-level
measures of ISQ with unit-level quality performance.
This is necessary to have sufficient sample size given
that our study has ISQ data from only one hospital.
This approach precludes our ability to use publicly
available data sources, such as the Centers for Medi-
care and Medicaid Services’ data on mortality and
readmissions, because they are at the hospital-level.
Following Lake and Cheung’s (2006) approach, we
combine falls with injury and hospital-acquired pres-
sure ulcers into a single measure of nursing-sensitive
adverse events. The rationale for this approach is
that both of these adverse events are related to nurs-
ing attention to patients. Furthermore, they occur
infrequently, which makes it difficult to study them
individually (Lake and Cheung 2006). Nonetheless,
as a robustness check, we run analyses with each of
the two variables as its own outcome variable. We
Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society
find similar results for pressure ulcers, but not for
falls.
3.2.3. Control Variables. We utilize several
patient acuity, patient volume, staffing levels, and
time-trend variables to control for differences
between units, as well as to control for alternate
explanations for the relationship between ISQ and
adverse events. If a unit has a higher patient acuity
during a particular month, the higher acuity level of
patients might make them more susceptible to falls
and pressure ulcers. At the same time, the higher
acuity might require more work from nurses, and
also make it more difficult for the support depart-
ments to keep up with equipment and supply needs
on the unit. Thus, there would be a correlation
between ISQ and adverse events, but not a causal
relationship. To account for this alternate explana-
tion, we use a variable, “Patient Acuity,” to control
for differences in patient acuity across the nursing
units, and month-to-month variation within a unit.
Patient acuity is a unit’s monthly average of a daily,
individual patient-level acuity measure. The mea-
sure is from QuadraMedâ, a healthcare analytics
company that provides hospitals with daily nurse
staffing schedules (e.g., how many nurses to staff
each shift, which patients to assign to which nurse)
based on the nursing workload of the current mix
of patients on a nursing unit. Our study hospital
uses their service. Patient acuity is a validated mea-
sure that estimates daily the nursing workload
required for each patient. Each day, each patient on
the unit is classified into one of 6 types, with higher
numbers representing higher average nursing work-
load due to patient acuity and procedures that day.
The estimate is derived using data from the elec-
tronic health record, such as the patient’s clinical
condition, physician orders, nursing orders, and
whether the patient is being admitted or discharged
(QuadraMed 2017).
Similarly, a high volume of patients in a unit dur-
ing a particular month might make it difficult for the
support departments to perform well and also might
result in a high level of multi-tasking, which has
been shown to lead to errors and an increase in the
use of overtime (KC 2014). Consequently, we control
for unit workload, using total monthly patient days
(KC 2014, Rogers et al. 2004). We refer to this vari-
able as “volume.” In addition, we control for nurse
staffing level as fewer nurses working could con-
tribute to adverse events (Lake and Cheung 2006).
We also control for the average length of stay (in
days) of the patients treated on the unit in a given
month. We do this because longer lengths of stay are
associated with a higher risk of pressure ulcers (Ban-
sal et al. 2005). We measure nurse staffing level by
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Production and Operations Management (2017), https://doi.org/10.1111/poms.12758
5
the average number of FTE registered nurses
employed by the unit in a given quarter. The hospi-
tal did not collect monthly data, but only quarterly
data on nurse staffing level due to low variation in
monthly staffing level. We also control for overtime
percentage as overtime could lead to fatigue, which
is associated with errors (KC 2014, Rogers et al.
2004). Overtime percentage is measured as the ratio
of the total number of overtime hours worked by
employed nurses in the unit that month divided
by the total hours worked on the unit that month by
employed and contract nurses. We further control
for time trend to account for any trend in adverse
events over time in our hospital. To do this, we cre-
ate a variable “time,” whose value is the number of
the month in our study (e.g., data from the first
month in our dataset have a value of 1, data from
the second month have a value of 2, etc.).
3.3. Econometric Models
Given that we do not have data on operational fail-
ures, workarounds, and nursing time at the bedside,
we test the link between ISQ and adverse events
rather than the more complex theoretical model we
describe in the literature review section. Our econo-
metric model focuses on establishing a link between
ISQ and adverse events, to provide evidence that poor
support from supply departments is associated with
lower patient safety levels. We specify our model for
a nursing unit i at month t as follows:
Adverse Eventsit ¼ bi0 þ b1 ISOit þ Control0it b2 þ eit ; ð1Þ
ISQit is the overall mean ISQ across the five quality
dimensions and 11 support departments on unit i
during month t. The control variables are described
in section 3.2.3. The variable of interest in Equa-
tion (1) is b1, which will be significant and negative
if our hypothesis is supported.
Our specification includes fixed effects for each
nursing unit (bi0). Unit fixed effects control for time-
invariant, unobserved heterogeneity across nursing
units (Hausman and Taylor 1981), which might other-
wise affect both our independent variable (ISQ) and
our dependent variable (adverse events), leading to
biased estimates. For example, a unit with an effective
manager might consistently have fewer adverse
events than a unit with an ineffective manager. Other
time-invariant factors that may differ between units
include the unit’s layout, number of beds, location in
the hospital, and types of patient treated.
As we have a panel dataset, we check for serial cor-
relation in the idiosyncratic errors of our linear panel-
data model, as Wooldridge (2010) recommends. The
null hypothesis is that there is no first-order autocor-
relation. The test results suggest the potential
 Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
6 Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society
presence of first-order autocorrelation (p = 0.09). We
also check for cross-sectional correlation by running a
Breusch–Pagan Lagrange multiplier test calculated on
the residuals of a fixed-effect regression model,
following the approach described in Greene (2003).
The null hypothesis is that there is no cross-sectional
correlation. We find that there is cross-sectional
correlation in our model (p < 0.05). To correct for both
the autocorrelation and cross-sectional correlation, we
adopt Driscoll and Kraay (1998), as previous studies
(e.g., Chuang et al. 2016) facing similar issues do.
Driscoll and Kraay standard errors are robust to
heteroskedasticity, autocorrelation, and cross-
sectional correlation (Hoechle 2007).
Another issue that needs to be addressed is the
potential endogeneity between ISQ and adverse
events in a given month. The coefficient of ISQ could
be endogenously biased if the occurrence of patient
falls and pressure ulcers on the unit earlier in the
week causes unit leaders to report lower levels of ser-
vice quality from the support departments. This
reverse causality would be a problem for our research
because if it is occurring, adverse events would be
driving lower ISQ scores, rather than the other way
around. To address the potential endogeneity bias,
we use a lagged variable approach, which has been
widely used to control for possible endogeneity
(Chuang et al. 2016, Dong et al. 2014, Ton and Raman
2010). We use the prior month’s ISQ score (“lagged
ISQ score”) as an instrument for the current month’s
ISQ score. The lagged ISQ is a good instrument
because it passes the two conditions that comprise the
formal requirements to be a valid instrument (Wool-
dridge 2010). First, prior month’s ISQ is positively
correlated with current month’s ISQ (q = 0.95,
p < 0.001). Second, prior month’s ISQ does not affect
current month’s adverse event rates, except through
the current month’s ISQ. All analyses are conducted,
using STATA 13.
4. Results
Figure 1 is a histogram of our dependent variable,
Adverse Events. It is right-skewed, with 67.80% of the
nursing unit-months having less than 5.26 adverse
events per 1000 patient days. Table 2 shows the
descriptive statistics and pairwise correlations for the
variables in our study. The average ISQ is 4.35 out of
5, suggesting that, on average, the support depart-
ments “usually,” but not “always,” provide good ser-
vice to the nursing units. On average, there are 3.59
adverse events per 1000 patient days. Given that, on
average, there are about 622 patient days per month
per unit, this rate of harm equates to 2.23 events per
month per unit. On average, there are 30 registered
nurses staffed on a given unit each quarter. They
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Production and Operations Management (2017), https://doi.org/10.1111/poms.12758
work 6% overtime with 1% as the minimum overtime
percentage.
Model 1 in Table 3 shows a base model of the
impact of our control variables on the rate of adverse
events on nursing units. As we would expect, higher
levels of nurse staffing are associated with a lower
rate of nursing-sensitive adverse events (b2 = 1.02,
p < 0.05). This equates to 1.02 fewer events per 1000
patient days for each additional full-time equivalent
nurse on staff. Model 2 shows the results of a regres-
sion, using the current month’s ISQ score as our inde-
pendent variable. A higher ISQ is associated with a
lower rate of adverse events (b1 = 7.18, p < 0.05).
Nurse staffing continues to be significant and nega-
tively associated with adverse events (b1 = 1.16,
p < 0.05).
Due to the potential endogeneity between the cur-
rent month’s ISQ score and adverse events that we
describe above, in Model 3, we use the prior month’s
ISQ score as an instrument for the current month’s
ISQ score. This serves as the main test of our hypothe-
sis. ISQ is statistically significant, and negatively asso-
ciated with adverse events (b1 = 13.48, p < 0.05),
providing support for our hypothesis. To put this
result in context, assume that, for a particular nursing
unit, one of the 11 support departments increases its
monthly mean ISQ score on all five dimensions by
one point. This increases the support department’s
monthly mean ISQ for that unit by one point. The
improved score could arise from a concerted effort by
the support staff who service that particular nursing
unit, or by a targeted improvement project by the sup-
port department. Note that for the hospital in our
study, the single department’s improvement in ISQ
would result in the nursing unit’s overall ISQ average
increasing by 1/11 or 0.0909 because there are 11 sup-
port departments. For ease of interpretation, we
round 0.0909 to 0.1. This increase in ISQ is associated
Figure 1 Histogram of Adverse Events [Color figure can be viewed at
wileyonlinelibrary.com]
30
20
Frequency
10
0
0 5 10 15
Adverse Event Rate (per 1000 patient days)
Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society 7

Table 2 Descriptive Statistics and Correlation Matrix (N = 59)

Variables Mean SD Min Max 1 2 3 4 5 6 7

1. Adverse event rate (per 1000 patient days) 3.59 3.63 0.00 12.29
2. Internal service quality (1–5) 4.35 0.40 3.96 5.00 0.10
3. Patient acuity (average patient classification: 1–6) 1.68 0.07 1.54 1.84 0.15 0.24
4. Volume (number of patient days per month) 622 137 374 974 0.10 0.25 0.33*
5. Overtime percentage 6% 2% 3% 10% 0.04 0.35** 0.19 0.69***
6. Nurse staffing level (number of full time 30.40 5.86 23.02 41.80 0.10 0.43*** 0.34** 0.83*** 0.75***
equivalent registered nurses employed on
the unit in a given quarter)
7. Time (cumulative month number in our dataset) 7 4 1 13 0.29* 0.14 0.21 0.11 0.11 0.13
8. Length of Stay (days, monthly 3.92 0.53 2.96 5.0 0.05 0.03 0.01 0.42*** 0.19 0.32* 0.02
average for each unit)

*p < 0.05, **p < 0.01, ***p < 0.001.

with a 1.35 (13.48 9 0.1) point reduction in the num-
ber of adverse events on the unit per 1000 patient
days, holding all other variables constant. This
equates to a 38% reduction in adverse events (1.35
reduction in events/3.59 baseline number of events)
on the nursing unit.
In Model 3, the level of nurse staffing is statistically
significant and negatively associated with the rate of
adverse events (b2 = 1.56, p < 0.01). By comparing
the regression coefficients for ISQ and nurse staffing,
we see that improving the overall mean ISQ received
by a nursing unit by one tenth of a point as described
above has almost the same benefit as increasing staff-
ing on the nursing unit by one FTE nurse in terms of
reducing adverse events.
4.1. Robustness Checks
We conduct a series of three robustness checks,
shown in Table 3, Models 4–7, which lend additional
support to our findings. First, to ensure that our
results are robust to an alternate specification, we
run our analysis using a Poisson distribution regres-
sion with the count of adverse events as the depen-
dent variable (Cameron and Trivedi 2013). We
calculate the count of adverse events by multiplying
the event rate by the average volume for one unit
during that month. As shown in Model 4, the rela-
tionship between ISQ and adverse events holds
when we use Poisson regression model with a count
of the adverse events (b1 = 1.82, p < 0.05). We use
Poisson regression as a robustness check rather than

Table 3 Effect of Internal Service Quality (ISQ) on the Rate of Adverse Events

Model with ISQ being

Model without instrumented by the Models for robustness checks
Baseline model ISQ being instrumented prior month’s ISQ
(1) (2) (3) (4) (5) (6) (7)
Outcome variable Events rate Events rate Events rate Events count Events rate Ulcer rate Fall rate
Internal service quality 7.18* 13.48* 1.82* 13.92** 12.14* 1.05
(2.78) (4.49) (0.80) (4.41) (4.76) (1.00)
Patient acuity 20.05** 16.85* 6.53 4.89*** 5.89 1.03 5.17
(5.21) (5.55) (7.80) (0.60) (8.20) (8.10) (3.67)
Volume 0.00 0.00 0.00 0.00^ 0.00 0.00 0.00
(0.01) (0.01) (0.00) (0.00) (0.00) (0.00) (0.00)
Overtime percentage 33.65 43.064 5.11 11.34 7.23 0.33 6.88
(47.82) (44.03) (49.50) (7.00) (50.04) (55.09) (8.71)
Nurse staffing level 1.02* 1.16* 1.56** 0.27 1.67** 1.25*** 0.32*
(0.33) (0.38) (0.40) (0.23) (0.39) (0.28) (0.15)
Time 0.38** 0.53** 0.65** 0.14*** 0.69** 0.57** 0.08
(0.11) (0.12) (0.15) (0.04) (0.16) (0.14) (0.06)
Length of stay (Days) 1.54 1.64 1.19 0.40** 1.08 0.01
(2.03) (1.90) (2.04) (0.14) (2.09) (0.75)
Constant 3.37 42.71^
(8.25) (21.59)
N 59 59 51 59 48 51 51
R2 0.23 0.31 0.33 0.33 0.24 0.14
v2 99.73

Regressions include fixed effects for nursing units. Model 3 treats ISQ as endogenous variable and shows the estimates of our model using the prior
month’s ISQ score as instrument. Robust standard errors in parentheses. *p < 0.05, **p < 0.01, ***p < 0.001.

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 Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
8 Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society
as our main model because linear regression, which
is our main model, has several advantages. Linear
regression is easy to interpret, enables the use of
Driscoll and Kraay standard errors to correct for
autocorrelation and cross-sectional dependency, and
permits the use of instrumental variable analysis.
Nonetheless, Poisson regression is appropriate to use
as a robustness check for at least three reasons.
Unlike other potential models that we could have
used, it does not predict negative values, which is
appropriate given that our dependent variable—the
rate of adverse events—cannot be negative. In addi-
tion, because the variance of the count of adverse
events is larger than its mean (mean = 2.26, vari-
ance = 5.57), we can use the Huber/White/
Sandwich linearized estimator to estimate the vari-
ance–covariance matrix of the estimates in our Pois-
son regression model, which negates the need to
have the mean equal to the variance when, using a
Poisson regression (Cummings 2009, Wooldridge
2010). Finally, we use Poisson rather than a Negative
Binomial Model because the latter does not work
well with small samples such as we have in our
dataset (Armitage et al. 2008).
As a second robustness check, we adjust for the
potential bias caused by the nursing unit that has six
missing unit-months of ISQ data. In this check, we
exclude that unit and run our main analyses with the
remaining four units. As shown in Model 5, the rela-
tionship between ISQ and errors (b1 = 13.92,
p < 0.01) remains consistent with our main model,
Model 3.
For our third check, we run our main analyses sepa-
rately for each one of the two types of adverse events,
that is, we run two additional regressions: one with
hospital-acquired pressure ulcers per 1000 patient
days, and one with falls with injury per 1000 patient
days as the dependent variable. For the rate of pres-
sure ulcers (Model 6), ISQ remains significant
(b1 = 12.43, p < 0.05). However, for the rate of falls
with injury (Model 7), ISQ is not significant, although
the relationship is negative as predicted (b1 = 1.05,
p = 0.32). The lack of significance is likely due to the
infrequency with which falls with injury occur. Thus,
our relatively small dataset is likely unable to detect
the signal.
5. Discussion and Conclusions
We use just over a year’s worth of monthly data to test
the relationship between the quality of internal sup-
port departments—such as biomedical equipment—
and adverse events on five units of a hospital that
developed a survey instrument to measure ISQ. Our
results show that higher levels of delivery quality
from support departments is negatively associated
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with nursing-sensitive adverse events of patient falls
with injury and pressure ulcers. Our results provide
empirical evidence to support the Fredendall et al.
(2009) hypothesis that better integration of support
departments’ work with nursing units will facilitate
safer patient care. Our results are robust to several
alternate model specifications.
5.1. Implications for Theory
Our study contributes to the healthcare OM literature
by explicitly measuring ISQ and empirically testing
its impact on objective measures of patient harm.
Most prior studies on the impact of internal services
within hospitals do not have an objective measure of
medical error (Jimmerson et al. 2005, Mazur and
Chen 2009, Nelson-Peterson and Leppa 2007, Sobek
and Jimmerson 2003, Spear and Schmidhofer 2005) or
if they do, they do not explicitly measure ISQ (e.g.,
Shannon et al. 2006). A notable exception is a labora-
tory experiment by Tucker (2016), which finds that
nurses who work around an operational failure from
the pharmacy are significantly more likely to adminis-
ter a potentially fatal, 10x overdose of insulin,
whereas Tucker (2016) is a laboratory experiment—
and thus actual patients are not harmed—our study’s
outcome data are actual medical errors that harmed
real patients. Thus, our study addresses a limitation
of Tucker (2016) by examining the impact of ISQ in an
actual hospital setting.
Our study proposes a new approach to reduce
adverse events: focusing on improving the perfor-
mance of support departments within hospitals. This
is an important contribution because few prior stud-
ies examine the impact of internal, non-clinical sup-
port departments. For example, literature reviews on
the causes of patient falls (Hignett and Masud 2006)
and pressure ulcers (Bansal et al. 2005) focus on
patient-specific characteristics, clinical treatments
(e.g., special mattresses to prevent pressure ulcers),
and infrastructure issues (e.g., poor lighting), with no
mention of the impact of the quality of service
received from internal support departments on
nurses’ ability to spend time at their patients’ bed-
sides. Similarly, suggested solutions to reduce patient
falls and pressure ulcers focus on clinical-staff
actions, such as using checklists; modifying care
delivery systems and processes to incorporate redun-
dancy; redesigning the clinical work environment;
transforming hospital leadership to enable clinical
staff to raise safety concerns to management, build-
ing a safety climate; and reducing human errors dur-
ing care delivery (Bohn 2013, Boyer et al. 2012,
Gawande and Lloyd 2010, Katz-Navon et al. 2005,
McFadden et al. 2009, Naveh et al. 2005, Pronovost
and Vohr 2010, Stern et al. 2008). Our study docu-
ments that non-clinical support staff also have an
Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society
important role to play in their efforts to improve
patient safety.
The longitudinal nature of our data point to the
importance of day-to-day excellence in the execution
of supplying materials to units. We interviewed the
manager of the Materials Management Department.
He explained the importance of SupportCardTM for
information transfer and coordination between the
nursing units and his support department. When a
nursing unit scores his department less than a “5” on
an item, the manager writes a comment with informa-
tion about when the problem occurred and details
about what happened. Using this information, the
supply technician responsible for that unit can gain
an understanding of the underlying causes of the
problem and fix them for the future. The manager sta-
ted, “The technician can respond to the complaint
immediately and find the root cause while also build-
ing a relationship between the two departments.” Our
interview with the materials management manager
supports Fredendall et al.’s (2009) claim that the per-
formance of internal supply chains are determined, in
part, by coordination between a supply department
and the nursing unit. Finally, our study suggests that
the combined effect from many small improvements
in processes might yield significant benefits for
patient care quality and cost.
5.2. Implications for Practice
Our study has important implications for practice.
OM research on internal integration in manufacturing
settings suggests that mechanisms that align the work
of support departments with the specific needs of
patients on nursing units should result in improved
organizational performance (Pagell 2004). In support
of this supposition, we find that improvements in
non-direct care service quality can help reduce
adverse patient outcomes. Given that the US govern-
ment no longer reimburses hospitals for treatment
related to preventable adverse events affecting Medi-
care patients, including patient falls and hospital-
acquired pressure ulcers (Milstein 2009), hospitals
stand to benefit financially from a deeper understand-
ing of how to prevent adverse events. Our study finds
a particularly novel driver of reduced adverse events
because it is not obvious a priori that support depart-
ments—most of which are not clinical in nature—can
have a significant impact on clinical outcomes. In
practice, hospitals may be able use large amounts of
healthcare data now available to target improvement
efforts toward the appropriate support departments.
To quantify the impact of our findings, we conduct
additional analyses. Our results from Model 3 in
Table 3 show that a 0.10 increase in ISQ is associated
with an average of 0.82 fewer adverse events per
month for a unit that has an average of 622 patient
Please Cite this article in press as: Zheng, S., et al. The Impact of Internal Service Quality on Preventable Adverse Events in Hospitals.
Production and Operations Management (2017), https://doi.org/10.1111/poms.12758
9
days/month, holding all other variables constant
(1.35 fewer events per 1000 patient days 9 622 patient
days per month). Patient falls with injury in hospitals
(which account for 30–50% of total falls) have been
estimated to cost on average $14,000 per fall (Joint
Commission 2015) and each hospital-acquired pres-
sure ulcer costs on average $10,700 (Leaf Healthcare
2014). Given that 22% of the adverse events in our
data are falls and 78% are pressure ulcers, we use a
weighted average of $11,426 per adverse event. Thus,
the reduction in adverse events would equate to
$9381 per month per unit in savings ($11,426 9 0.82).
However, adverse events have two effects: an increase
in per patient cost and a longer length of stay, which
reduces bed capacity available to treat new patients
(Joint Commission 2015, Leaf Healthcare 2014). Thus,
our calculation is likely an underestimate of the total
impact on the hospital’s bottom line because it does
not account for the increase in length of stay. In addi-
tion, our study provides an approximate estimate of
the loss of nursing staff time due to problems with
internal supply chains. We find that increasing overall
average ISQ by 0.1 points on the 5-point scale has
nearly the same impact on adverse events as increas-
ing staffing by one full-time equivalent nurse per unit.
In the hospital that we study, the average salary of a
support service technician is lower than the average
salary of a nurse. Thus, hospitals might be able to
improve quality of care at a lower cost by increasing
support staff to relieve the workaround burden on
nurses. Of course, although it is important to try to
quantify the cost of quality, we acknowledge that pre-
venting falls (with or without injury) and pressure
ulcers is important in its own right because it means
that better care is being provided to patients.
5.3. Limitations and Future Research
As with most studies, our study has limitations. First,
due to a lack of data on operational failures, work-
arounds, and nurses’ time at the bedside, we are
unable to test the complete, complex, theoretical rela-
tionship linking ISQ with operational failures, work-
arounds, time at the bedside, and adverse events.
However, prior studies have already demonstrated the
connection between low ISQ and operational failures
(Tucker et al. 2014); operational failures and work-
arounds (Tucker 2016) and time at the bedside (Tucker
2004); and the link between nurses’ time at the bedside
and clinical outcomes (Aiken et al. 2002). Our study
provides an important and previously untested piece
of this complex web by demonstrating the connection
between ISQ and adverse events. We leave it to future
research to test all of the relationships simultaneously.
Other limitations of our study are the subjective nat-
ure of our measure of ISQ, the aggregate nature of our
ISQ measure, and the fact that our data come from
 Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
10 Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society

only five nursing units from one hospital. In this
study, we use all of the data that are available due to
the limited diffusion to other hospitals of the specific
tool that we study. Nonetheless, the longitudinal nat-
ure of our data allows us to focus our analysis solely
on explaining within-unit variation, similar to other
studies that apply fixed effect models (e.g., Ton and
Raman 2010). Future research could enlarge the sam-
ple size by implementing a validated measure of ISQ
across multiple hospitals and units to generate a larger
dataset. Such a study may benefit from having more
fine-grained data in terms of the time frame with
which ISQ and adverse events are measured, such as
weekly measures rather than monthly measures. How-
ever, given the low rate of adverse events, most hospi-
tals aggregate these measures to the monthly level. In
addition, a study that uses RFID devices on nurses can
explicitly test if higher ISQ is associated with more
nursing time at patients’ bedsides, and if more time at
bedside is associated with fewer adverse events. We
believe that our paper makes a contribution by provid-
ing evidence of the potential value of such a longitudi-
nal, multi-hospital research project, which may help
future studies secure funding.
5.4. Conclusions
We find that higher quality service delivery from the
support departments in a hospital reduces adverse
events. When ISQ is low, nurses may experience oper-
ational failures and conduct workarounds that lead to
omitted patient care tasks, which in turn cause nurs-
ing-sensitive adverse events. Our study thus provides
evidence that the quality of service provided to nurs-
ing units is important to the prevention of adverse
events. Thus, rather than focusing solely on clinical
care processes, hospital managers may also be able to
improve patient safety by ensuring high levels of ISQ
in their hospitals.
Acknowledgments
We are grateful to the study hospital for providing the data
and helping us to understand the operations processes in its
support departments. We also thank the senior editor and
the two anonymous referees for their valuable comments
that have substantially improved the paper. We gratefully
acknowledge comments and suggestions on earlier versions
of the paper from Marcus Bellamy, Kang Bok Lee, Eitan
Naveh, Gregory Stock, Morgan Swink, and Wei Wang. All
remaining errors are our own.

Appendix A: Dimensions of Internal Service Quality and Correlations Between

Departments

Table A1 Principal Component Factor Analysis on Internal Service

Quality Dimensions

Variable Factor1 Uniqueness

Accessibility 0.98 0.04
Accuracy 0.98 0.04
Attitude 0.94 0.12
Timeliness 0.95 0.09
Operations 0.98 0.03

N = 55; 11 support departments over five quarters.

Table A2 Correlations Between ISQ Scores for Support Departments

1 2 3 4 5 6 7 8 9 10
1. Transport
2. Supplies 0.89
3. Pharmacy 0.92 0.81
4. Linens 0.95 0.92 0.91
5. Laboratory Services 0.89 0.76 0.96 0.88
6. Information Systems 0.87 0.95 0.86 0.89 0.78
7. Food Services 0.90 0.85 0.91 0.88 0.84 0.91
8. Engineering/Facilities 0.82 0.67 0.82 0.83 0.81 0.68 0.80
9. Environmental Services 0.97 0.91 0.93 0.97 0.90 0.88 0.88 0.82
10. Equipment 0.96 0.92 0.96 0.97 0.91 0.93 0.92 0.81 0.98
11. Biomedical Engineering 0.92 0.93 0.91 0.94 0.88 0.90 0.85 0.71 0.95 0.96

N = 59; all correlations are statistically significant with p < 0.001.

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Production and Operations Management (2017), https://doi.org/10.1111/poms.12758
Zheng, Tucker, Ren, Heineke, McLaughlin, and Podell: The Impact of Internal Service Quality
Production and Operations Management 0(0), pp. 1–12, © 2017 Production and Operations Management Society
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Please Cite this article in press as: Zheng, S., et al. The Impact of Internal Service Quality on Preventable Adverse Events in Hospitals.
Production and Operations Management (2017), https://doi.org/10.1111/poms.12758