The industrywide effort at using proven performance improvement tools in health care started in the 1980s with the advent of the Medicare prospective payment system, which divorced payment rates from the cost of providing care. Over the ensuing three decades, as managed care grew and adopted Medicare's methodology, healthcare organizations have experimented with several different approaches.
Here is a quick look at several of the most prevalent performance improvement tools that healthcare leaders have deployed.
Total Quality Management (TQM). TQM is a management approach developed in the Japanese auto industry, and is the seed from which the Toyota Production System, otherwise known as Lean manufacturing, evolved. TQM emphasizes organizationwide participation, cultural change, and the application of various data-driven systems analysis and statistical process control tools. TQM aims to improve quality by ensuring conformance to customer requirements. As a preventive device, it focuses on error reduction, customer satisfaction, and employee training.
Continuous Quality Improvement (CQI). Related to TQM, CQI goes beyond traditional quality assurance by optimizing the organization's processes and systems. It emphasizes regular, formal identification of quality defects and interventions to prevent defects from occurring in the first place. Both CQI and TQM are based on the work of pioneers in industrial management, most famously W. Edwards Deming and Joseph Juran.
Patient-Focused Care. Patient-Focused Care is epitomized by the Planetree model, established in late 1970s as the philosophy of organizing care around the needs of patients. It requires changes in operations and organizational culture, places patients as active participants with caregivers, and emphasizes creating healing environments through innovation in facility design. The benchmark measure is patient satisfaction.
An alternate version was championed in early 1990s by the consulting firm Booz Allen. This version argued for shifting a healthcare organization away from a functional, hierarchical structure to a "patient-focused" one. The key focus was to restructure operations and services by shifting the organizational focus of delivery from nursing units to patient care centers, aggregating patients based on diagnosis and care requirements, and redeploying ancillary services from centralized locations to as close to the bedside as possible. The greatest failure of this approach was reliance on capital-intensive facilities redesign. (Hospitals are still on this journey; however, there are now more clinical and IT enablers than there were when concept originated (e.g., point-of-care testing, clinical pathways, electronic health records, and picture archiving and communications systems) as well as new information on clinical effectiveness.
Reengineering. Championed in the early 1990s by authors and consultants Tom Davenport and Michael Hammer, reengineering was defined as business process redesign using new enabling technologies (ERP systems). Quickly this concept was transmuted to a benign euphemism for cost reduction and head count reduction. In recent years, it has reemerged as "clinical transformation"-redesigning business and clinical processes to exploit the capabilities of advanced clinical information systems. The key element of both reengineering and clinical transformation is the use of information technology dramatically to improve core operational processes.
Work-Out. Work-Out was developed by GE as a straightforward problem-solving technique to reduce bureaucracy and solve organizational problems of all kinds. It is a high-speed, low-tech methodology that engages many people and drives process and cultural change. Work-Out's signature element is large group meetings of employees and managers to develop recommendations for process improvement, culminating in a "Town Meeting" with senior management to present recommendations and obtain immediate yes/no decisions. Responsibility for implementation is assigned to an "owner" who sees that results are achieved.
Six Sigma. Six Sigma is a deliberate, highly technical, data-driven tool aimed at reducing variation and preventing defects in discrete processes. The DMAIC (define, measure, analyze, improve, control) methodology provides a structured framework for tackling business problems with a prescriptive approach. Results from Six Sigma projects are typically small and local, and address narrow problems. The approach posits that process variation is antithetical to quality; therefore, reducing variation leads to higher quality. Six Sigma requires a large cultural infrastructure that is highly prescriptive and is the most rigorous and complete application of statistical process control.
Lean. Lean, the core element of the Toyota Production System, focuses on process flows and waste reduction using tools such as value-added/non-value-added analysis and value stream mapping. Lean is a slow, technical, and data-driven methodology. It centers on optimizing "value-added" work and eliminating "non-value-added" activities, specifically eight unique types of waste: underutilized people, defects, inventory, overproduction, waiting time, motion, transportation, and extra processing.
Failure Modes and Effects Analysis (FMEA). FMEA is a methodology for evaluating processes to identify where they could go wrong and to assess the relative risk of various kinds of process failures in order to identify the parts of the process that require change the most. FMEA asks three questions: What could go wrong (mode: wrong medication selected)? Why would the failure occur (cause: transcription error)? What are the consequences of failure (effect: patient harm)? Similar to Lean, FMEA addresses core processes, but focuses on identifying the parts of the process that could fail, rather than streamlining the process.
Derivatives. Recognizing the overlap between these tools' objectives and methods, healthcare organizations are implementing various derivative approaches. Lean Six Sigma combines the Six Sigma's focus on quality with Lean's emphasis on speed aiming to improving service quality within an established time limit. Lean and FMEA are frequently combined due to the emphasis on understanding and mapping processes.
It's worth noting that none of these methodologies are completely new inventions. Rather, they are nothing but "packaging" of traditional systems analysis, industrial engineering, and statistical process control tools into management concepts that can be communicated and implemented easily.
Robert D. Betka Jr., MHSA, FACHE, is managing director, Catalyst Management Advisors, Grand Rapids, Mich.(firstname.lastname@example.org).
For more information, see Robert Betka's "Avoiding the Performance Improvement Trap," hfm, June 2012
Publication Date: Friday, June 01, 2012