Indiana Institute of Technology Quality Management Paper

In a short paper (1-2 pages), describe the three primary quality management activities:

Health Administration Press
Chapter 1
The Challenge and the Opportunity
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The Challenge
• US healthcare spending outgrowing GDP
• Increased pressure on federal budget
• Continuing safety and error issues
• Pace of quality improvement slow
• Failure to implement known methods to improve
patient care
• Patient dissatisfaction
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Institute of Medicine—Crossing the
Quality Chasm
Six Aims for the US Health System
• Safe
• Effective
• Patient-centered
• Timely
• Efficient
• Equitable
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Steps to Close the Chasm
• Care based on continuous healing
relationships
• Customization based on patient needs and
values
• The patient as the source of control
• Shared knowledge and the free flow of
information
• Evidence-based decision making
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Steps to Close the Chasm (cont’d)
• Safety as a system property
• The need for transparency
• Anticipation of needs
• Continuous decrease in waste
• Cooperation among clinicians
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The Opportunity
• Evidence-based medicine
– Could reduce healthcare costs significantly (e.g., by
$4,919/hospital admission)
– Over 4,000 care guidelines currently available
• Big data and analytics
– The new data science/healthcare partnership
– Widespread adoption of electronic health records
• Active and engaged consumers
– Consumer-directed healthcare savings accounts
– Self-care through healthcare education
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A Systems View of Healthcare
Environment
Level D
Organization
Level C
Microsystem
Level B
Patient
Level A
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System Stability and Change
(Peter Senge—The Fifth Discipline)
• The structure of a system is the primary mechanism
for producing an outcome.
• No system is ever completely stable.
• Each system’s performance is modified and
controlled by feedback.
• Feedback is “any reciprocal flow of influence.”
• Feedback can be one of two types: reinforcing or
balancing.
• A confounding problem with feedback is delay.
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System with Reinforcing and
Balancing Feedback
Employee
motivation
+
+
Salaries
+
Financial
performance,
profit
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System with Reinforcing and
Balancing Feedback (cont’d)
−
Actual
staffing
level
Add or
reduce
staff
−
Compare actual to
needed staff based
on patient demand
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Chemotherapy as an Example of Linkages
Within the Healthcare System
Payers want
to reduce
costs for
chemotherapy
New payment
method for
chemotherapy
is created
Chemotherapy
treatment needs
to be more
efficient to meet
payment levels
Changes are
made in care
process and
support
systems to
maintain
quality while
reducing
costs
Environment
Organization
Clinical Microsystem
Patient
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Framework for Effective Operations
Management in Healthcare
Setting goals
and executing
strategy
Fundamental
healthcare
operations
issues
Performance
improvement
tools,
techniques,
and programs
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High performance
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Vincent Valley Hospital (VVH)
• Midwestern city of 1.5 million
• 5,000 staff members
• Operates 350 inpatient beds
• Medical staff of 450 physicians
• Operates nine clinics
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Vincent Valley Hospital (cont’d)
• Two major competitor hospitals
• Surgeons from all three hospitals recently joined
together to set up an independent ambulatory surgery
center
• Three major health plans provide most of the private
payment to VVH
• Plans, along with the state Medicaid system, have
recently begun a pay-for-performance system
• VVH has a strong balance sheet and a profit margin of
approximately 2 percent but feels financially challenged
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Health Administration Press
End of Chapter 1
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Chapter 2
History of Performance Improvement
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Operations Management in
Healthcare Organizations
• Costs of care and level of services delivered are increasing
• Expectation of quality care without defects or failures
• Need to produce higher quality service at reduced cost
• Only an improved utilization of resources through
effective operations management will meet this need
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Operations Management
• What is operations management?
The design, implementation, and improvement of the
processes and systems that create and deliver the
organization’s products and services. Operations
managers plan and control delivery processes and
systems within the organization.
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Systems View
INPUT
Transformation
Process
OUTPUT
Feedback
Labor
Material
Machines
Management
Capital
Goods or
services
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Knowledge Hierarchy
Wisdom
Morals
Understanding
Principles
Knowledge
Patterns
Information
Relationships
Importance
Data
Learning
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Important Events in Performance Improvement
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Mass Production
Women work an assembly line, Frankford Arsenal, Philadelphia, ca. 1940-45
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Frederick Taylor
• The Principles of Scientific Management (1911)
• “Wasted” human effort
• One best way
• Four principles
• Standard work
• Training
• Cooperation
• Planning
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Frank and Lillian Gilbreth
• One best way
• Time and motion studies
• Bricklaying
• Surgery
• Cheaper by the Dozen
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Project Management
• Gantt chart (early 1900s)
• Program Evaluation and Review Technique (1950s)
• US Navy
• Beta distribution for task times
• Critical Path Method (1950s)
• DuPont and Remington Rand
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Quality Gurus
• Walter Shewhart
• SPC and PDCA
• W. Edwards Deming
• Joseph M. Juran
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Do
Plan
PDCA
Cycle
Act
Check
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W. Edwards Deming
• Father of the quality revolution
• 1970s energy crisis
• Common cause versus special variation
• 14 points
• Deming System of Profound Knowledge
• Appreciation for a system
• Knowledge about variation
• Theory of knowledge
• Knowledge of psychology
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Joseph M. Juran
• Juran’s Quality Handbook (1951)
• Defines quality as “fitness for use”
• Adaptation of Pareto principle
• Quality trilogy
• Quality planning
• Control
• Improvement
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TQM (CQI) → Six Sigma
• TQM less codified than Six Sigma
• Based on the teachings of Shewhart, Deming, Juran
• Top management support and leadership
• Continuous improvement
• DMAIC, PDCA
• Six Sigma goal of 3.4 DPMO
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Quality Certification and Awards
• ISO 9000
• To be certified, an organization must demonstrate
compliance with the standards
• Standards are concerned with the processes of insuring
quality
• Baldrige Award
• Based on organizational excellence in seven categories
• Dissemination of best practices and strategies
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JIT → Lean → Agile
• Just In Time (JIT)
• Inventory management strategy aimed at reducing or
eliminating inventory
• Lean
• Philosophy of eliminating waste
• Agile
• Ability to respond quickly to changing conditions
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Supply Chain Management
The planning and management of all activities in
sourcing and procurement, conversion, and logistics
management. Also includes coordination and
collaboration with channel partners (e.g., suppliers,
intermediaries, third-party service providers,
customers). Supply chain management integrates
supply and demand management in and across
companies.
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Big Data and Analytics
• Appeared in 1997 with launch of Google search engine
• “Three Vs” of big data
• Volume
• Variety
• Velocity
• Increasingly sophisticated data analysis
• Growth of mobile internet usage
• New devices being connected to the internet
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Performance Improvement Today
Organizations such as the Institute for Healthcare
Improvement and AHRQ are leading the way in the
development and dissemination of tools,
techniques, and programs aimed at improving the
quality, safety, efficiency, and effectiveness of the
US healthcare system.
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End of Chapter 2
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Chapter 3
Evidence-Based Medicine
and Value-Based Purchasing
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The Challenge of Medical Progress
• Medical progress
• Laboratory experiments
• Clinical trials
• Translation to clinical practice
• Translation to clinical practice is where system often
breaks down
• Result—widespread variation in clinical costs and
quality
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Evidence-Based Medicine (EBM)
• The cure to wide variation in clinical practice: the consistent
application of EBM
• Major tool: the clinical guideline (also known as a protocol)
• Institute of Medicine definition: “Statements that include
recommendations, intended to optimize patient care, that are
informed by a systematic review of evidence and an
assessment of the benefits and harms of alternative care
options”
• National Guideline Clearinghouse
• 4,000 guidelines
• www.guideline.gov
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Resistance to
Evidence-Based Medicine
• Disagreement on the science underlying a guideline
• EBM is “cookbook medicine”; all patients are unique
• Lack of variation in treatment approaches decreases
“natural” discoveries
• Resistance to change and reliance on habits
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Standard and Custom Patient Care
• All clinical care is a mix of custom and standardized
care processes
• High-quality organizations. . .
• Master the art of custom care
• Optimize the science and consistent delivery of standard
care
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Separate and Select
Examples:
• Laser eye surgery
• Minute clinic
Patients self-select
Custom
Standard
Sorting
Resorting
Source: Bohmer, R. 2005. “Medicine’s
Service Challenge: Blending Custom and
Standard Care.” Healthcare Management
Review 30 (4): 281.
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Separate and Accommodate
Example: Duke Cardiology Clinic
• Patients sorted by protocol
• Nurse practitioners provide
standard care
• Cardiologists provide custom
care
• Every fourth visit, standard
patients are evaluated by the
nurse practitioner and
physician
Custom
Standard
Sorting
Resorting
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Modularized
Example: Andrews AFB Clinic
• Physician serves as architect—
care designer
• Physician performs evaluation
and creates plan
• Standard care provided by
other organizations and
departments
• Hypertension modules: weight
control, diet, drug therapy,
stress modification, surveillance
Custom
Standard
Sorting
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Resorting
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Integrated
Example: Intermountain Healthcare
• Identified 62 standard
processes—90 percent of
inpatients
• Standard processes built into its
electronic health record
• Physician encouraged to override
standard care as needed
• Overrides are recorded, analyzed,
and used to improve standard
process
Custom
Standard
Sorting
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Resorting
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Financial Implications of EBM
• Savings in the system can be achieved by consistent, highquality outpatient treatment and disease management, which
prevents unneeded hospitalizations
• AHRQ has identified a set of care-sensitive conditions, which
are measured with prevention quality indicators (PQIs)
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Federal Initiatives Using PQIs
* A sample of CMS and CMMI initiatives
that use the AHRQ QIs.
Source: Reprinted from AHRQ (2015).
Note:
AHRQ = Agency for Healthcare Research
and Quality
CMMI = Center for Medicare & Medicaid
Innovation
CMS = Centers for Medicare & Medicaid
Services
Hospital VBP = Medicare Hospital ValueBased Purchasing program
IQI = inpatient quality initiative
PDI = pediatric initiative
PQI = prevention quality initiative
PSI = patient safety initiative
QI = quality initiative.
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Chronic Care Model
•
•
•
•
•
Population-based outreach
Treatment plans sensitive to patient preferences
Evidence-based medicine used with automated
clinical decision support
CCM now widely deployed—managing diabetes
Team care—patient-centered medical homes
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Patient-Centered Medical Homes
1. Comprehensive care—meeting large majority of patient needs
through diverse team of care providers
2. Patient-centered—relationship-based care through understanding of
unique patient needs and support of self-managed care by patient
3. Coordinated care—spans all elements of broader health care system
4. Accessible services—shorter waiting times for urgent needs, 24/7
access to care, access tailored to patients’ preferences
5. Quality and safety—commitment shown through use of EBM,
decision support tools, performance, and patient satisfaction
measurement and improvement
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EBM and Comparative
Effectiveness Research
•
•
•
•
ACA—Patient-Centered Outcomes Research
Institute
Advances the quality and relevance of diagnostic
and treatment alternatives for common conditions
Relates research findings to patient subpopulations
Effectively disseminates these findings to
practitioners
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Tools to Expand the Use of EBM
•
•
•
Public reporting
Pay for performance
Clinical decision support
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Public Reporting
•
CMS reporting
•
•
•
•
Hospitals
Long-term care
Medical groups
Community-based systems
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Issues in Public Reporting
•
•
•
•
Risk adjustment for “sicker patients”
Patient compliance
Measurement of individuals or clinics
Use by general public to make buying decisions
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Impact of Public Reporting on the
Healthcare System
• Reduction in mortality and pain, increased patient
satisfaction
• Addition of new services, increases in quality
improvement activities
• Little or no impact on selection of providers by
patients
• Improvements more likely to occur in providers with
initially low scores
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Pay for Performance
• Gives providers additional payments based on their
care’s compliance with clinical EBM goals
• Goals measured by either process or outcome
• While preferred by providers, outcome is more
difficult to measure due to varying results
• Process measures backed by EBM are often used to
assess performance
• Implemented to improve health outcomes and lower
costs
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Pay-for-Performance Model
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Value-Based Purchasing
• Issues with traditional fee-for-service (FFS) system
• Encourages providers to deliver more, and more
expensive, services to maximize reimbursement
• Facilitates fragmented and uncoordinated care delivery
• Does not offer incentives for high-quality care
• Transition from FFS to value-based systems is accelerating
• Value-based payments at 40 percent in 2014, up from 11
percent in 2013
• Secretary of HHS goals—50 percent of Medicare
provider payments value-based by 2018
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Policy Issues in Value-based
Purchasing
• Attribution issues
• Patients lacking primary care physician
• Accountability wrongly assigned
• Costs assigned to physician rather than provider
• Increasing complexity of system
• Clinics changing billing methods to increase
Medicare payments
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Implications for Operations
Management
• Strategy Execution
• Blended balanced scorecard strategy
• Improved Modeling and Analytics
• Activity-based accounting
• Individual predictive patient behavior models
• Innovation Centers
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Clinical Decision Support
High-Tech Imaging Results
• $84 million savings based on
reduction of HTDI scans against
projected trend line without
decision support
• 11,000 fewer administrative hours
for just one medical group by
having electronic decision support
accepted vs. calling a radiology
benefits manager
• Decreased exposure to
radiation—potentially preventing
cancers
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Clinical Decision Support
High-Tech Imaging
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Summary
• The use of EBM is increasing
• EBM has been demonstrated to increase quality and
decrease costs
• Efforts to increase the use of EBM include:
• Public reporting
• Pay for performance
• Clinical decision support
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Health Administration Press
End of Chapter 3
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