Question 1
Complete Text Page 313 Practice Exercise 9: Improvement Case Study
Complete your work using a word processor and save it in pdf file format.
Present your work with question #, statement, and answer.
Question 2
If you were the team leader of the group described in the above case study, how would you refocus and remotivate the team toward the improvement goal? Give a complete analysis and provide a complete answer to the case analysis.
1. Analyze and answer the case completely and thoroughly.
3. Upload your work via attachment.
Question 3
MyHealthcare manufactures and sells blood pressure measurement and control products. Last year the company began selling its products online. Online sales have exceeded the company’s expectations, and management is now considering strategies to increase sales even further. To learn more about the online customers, a sample of 50 transactions was selected from the previous month’s sales. Data for these transactions include the day of the week each transaction was made, the time each customer spent on the website, and the amount of money each customer spent. MyHealthcare would like to gain a general understanding of customers’ buying patterns. The company uses the sample data to determine if online customers who spend more time also spend more money during their visits to the website. The company would also like to investigate the effect that day of the week has on sales.
1. The following table shows the frequency and the average dollar amount spent per transaction for each day of the week. What observations/interpretations can you make about MyHealthcare’s business based on the day of the week?
2. Using the information derived from the scatter plot and correlation coefficient (0.71), explore the relationship between the time spent on the website and the dollar amount spent. Discuss and interpret your results.
Patrice L. Spath
Diane L. Kelly
fo u rth Editio n
Applying Quality
Management
in HeAltHcAre
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Library of Congress Cataloging-in-Publication Data
Names: Spath, Patrice L., author. | Kelly, Diane L., author.
Title: Applying quality management in healthcare : a systems approach /
Patrice L. Spath, Diane L. Kelly.
Description: Fourth edition. | Chicago, Illinois : Health Administration
Press ; Washington, DC : Association of University Programs in Health
Administration, [2017] | Revision of: Applying quality management in
healthcare / Diane L. Kelly. | Includes bibliographical references and
index.
Identifiers: LCCN 2016055038 (print) | LCCN 2017001695 (ebook) | ISBN
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Subjects: LCSH: Medical care—Quality control. | Health services
administration. | Total quality management.
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To my lifelong friend and companion, my husband Robert O. Brown.
—P. S.
To Isabella.
—D. K.
BRIEF CONTENTS
A Note from Diane L. Kelly………………………………………………………………xv
Preface………………………………………………………………………………………..xvii
Acknowledgments…………………………………………………………………………..xxi
Section 1
Quality Management: A Systems Approach…………………………… 1
Chapter 1.
Chapter 2.
Chapter 3.
Chapter 4.
Chapter 5.
Section 2
Setting the Stage for Success…………………………………………….81
Chapter 6.
Chapter 7.
Chapter 8.
Section 3
Quality Management Fundamentals…………………………… 3
Role of Policy in Advancing Quality…………………………. 17
Characteristics of Complex Systems…………………………. 33
Understanding System Behavior……………………………… 49
Visualizing System Relationships……………………………… 65
Establishing System Direction…………………………………. 83
Setting Improvement Goals in Complex Systems……… 107
Fostering a Culture of Collaboration and Teamwork…. 125
Achieving Quality Results in Complex Systems………………….. 147
Chapter 9.
Chapter 10.
Chapter 11.
Chapter 12.
Chapter 13.
Measuring Process and System Performance……………. 149
Using Data Analytics Techniques to
Evaluate Performance……………………………………… 167
Designing and Implementing Improvements ………….. 203
Using Improvement Teams and Tools…………………….. 229
Making Healthcare Safer for Patients……………………… 253
Section 4 Practice Lab………………………………………………………………….. 283
Practice Exercise 1. Reflective Journal ……………………………………285
Practice Exercise 2. The Manager’s Role…………………………………287
Practice Exercise 3. Dynamic Complexity………………………………..289
Practice Exercise 4. System Relationships………………………………..291
Practice Exercise 5. Meeting Customer Expectations…………………293
vii
viii
B rief Co n t ents
Organizational Self-Assessment…………………..295
Improving a Performance Gap
in Your Organization……………………………301
Practice Exercise 8. Teamwork and Patient Safety……………………..309
Practice Exercise 9. Improvement Case Study………………………….313
Practice Exercise 10. Systems Error Case Study and Analysis………..319
Practice Exercise 11. Failure Mode and Effects Analysis………………321
Practice Exercise 6.
Practice Exercise 7.
Glossary……………………………………………………………………………………..325
Index…………………………………………………………………………………………335
About the Authors…………………………………………………………………………353
About the Contributor…………………………………………………………………..355
DETAILED CONTENTS
A Note from Diane L. Kelly………………………………………………………………xv
Preface………………………………………………………………………………………..xvii
Acknowledgments…………………………………………………………………………..xxi
Section 1
Quality Management: A Systems Approach…………………………… 1
Chapter 1. Quality Management Fundamentals ……………………………. 3
Learning Objectives ………………………………………………….3
Why Focus on Managing Systems?………………………………..4
What Are Quality and Safety?………………………………………5
Creating a Common Understanding of Quality Methods….7
Three Principles of Total Quality………………………………….9
Quality Continuum for Organizations…………………………12
Summary……………………………………………………………….14
Companion Readings……………………………………………….15
Web Resources………………………………………………………..15
References………………………………………………………………15
Chapter 2. Role of Policy in Advancing Quality…………………………… 17
Learning Objectives…………………………………………………17
External Stakeholders Affecting Quality ………………………18
Federal Health Policies and Oversight…………………………20
Private Health Policies and Oversight………………………….26
Summary……………………………………………………………….28
Companion Readings……………………………………………….29
Web Resources………………………………………………………..29
References………………………………………………………………31
Chapter 3. Characteristics of Complex Systems……………………………. 33
Learning Objectives…………………………………………………33
Systems Thinking…………………………………………………….35
Dynamic Complexity………………………………………………..37
ix
x
Det a iled Co n te n ts
Summary……………………………………………………………….44
Companion Readings ………………………………………………45
Web Resources………………………………………………………..46
References………………………………………………………………46
Chapter 4. Understanding System Behavior…………………………………49
Learning Objectives…………………………………………………49
A Systems Metaphor for Organizations………………………..49
Lessons for Healthcare Managers………………………………..52
Going Below the Waterline………………………………………..56
Summary……………………………………………………………….61
Companion Readings……………………………………………….62
Web Resources………………………………………………………..62
References………………………………………………………………63
Chapter 5. Visualizing System Relationships………………………………..65
Learning Objectives…………………………………………………65
Interconnected Systems Model…………………………………..67
Three Core Process Model………………………………………..68
Baldrige Performance Excellence Program
Framework ………………………………………………………..71
Socioecological Framework……………………………………….74
Summary……………………………………………………………….76
Companion Readings……………………………………………….78
Web Resource…………………………………………………………78
References………………………………………………………………78
Section 2
Setting the Stage for Success…………………………………………….81
Chapter 6. Establishing System Direction……………………………………83
Learning Objectives…………………………………………………83
Purpose………………………………………………………………….84
The Purpose Principle………………………………………………90
Vision……………………………………………………………………96
Context………………………………………………………………….99
Summary……………………………………………………………..102
Companion Readings……………………………………………..103
Web Resources………………………………………………………104
References…………………………………………………………….104
D etailed C ontents
Chapter 7. Setting Improvement Goals in Complex Systems…………107
Learning Objectives……………………………………………….107
Relationship Between Goals and Results…………………….109
Setting Improvement Goals in Complex Systems…………111
Types of Goal Statements………………………………………..114
Critiquing Goal Statements……………………………………..115
SMART Goals and Complex Systems………………………..119
Corollaries to Purpose and Goals………………………………120
Summary……………………………………………………………..121
Companion Readings……………………………………………..123
Web Resources………………………………………………………123
References…………………………………………………………….123
Chapter 8. Fostering a Culture of Collaboration and Teamwork…….125
Learning Objectives……………………………………………….125
Creating a Supportive Culture………………………………….126
Teams in Healthcare……………………………………………….128
Collaboration and Teamwork…………………………………..129
Mental Models Affecting Team Design………………………129
Mental Models About Work Team Differences……………131
Tools for Effective Teams………………………………………..134
Summary……………………………………………………………..137
Companion Readings……………………………………………..141
Web Resources………………………………………………………142
References…………………………………………………………….143
Section 3
Achieving Quality Results in Complex Systems………………….. 147
Chapter 9. Measuring Process and System Performance……………….149
Learning Objectives……………………………………………….149
Quality Measures and Their Uses……………………………..150
Selecting Performance Measures……………………………….151
Choosing a Comprehensive Set of Measures……………….156
Performance Measures and the Quality Continuum……..160
Summary……………………………………………………………..163
Companion Readings……………………………………………..163
Web Resources………………………………………………………164
References…………………………………………………………….164
xi
xii
Det a iled Co n te n ts
Chapter 10. Using Data Analytics Techniques to
Evaluate Performance…………………………………………167
Learning Objectives……………………………………………….167
What Is Data Analytics?…………………………………………..168
Introduction to Data Analytics Techniques…………………169
Types of Data ……………………………………………………….170
Applying Descriptive Statistics Techniques………………….171
Graphical Methods…………………………………………………172
Predictive Analytics………………………………………………..179
Numerical Summary Measures…………………………………180
Using Graphical and Numerical Methods to Analyze
Process Performance…………………………………………..186
Bundling and Unbundling Data According to the User’s
Purpose……………………………………………………………191
Summary……………………………………………………………..197
Companion Readings……………………………………………..200
Web Resource……………………………………………………….201
References…………………………………………………………….201
Chapter 11. Designing and Implementing Improvements ……………..203
Learning Objectives……………………………………………….203
Systematic Critical Thinking in Designing
Improvements…………………………………………………..204
Implementing Improvements…………………………………..212
Summary……………………………………………………………..219
Companion Readings……………………………………………..222
Web Resources………………………………………………………222
References…………………………………………………………….222
Appendix 11.1………………………………………………………225
Chapter 12. Using Improvement Teams and Tools……………………….229
Learning Objectives……………………………………………….229
Charter Improvement Projects…………………………………230
Performance Improvement Teams…………………………….232
Improvement Tools and Techniques………………………….235
Summary……………………………………………………………..246
Companion Readings……………………………………………..247
Web Resources………………………………………………………248
References…………………………………………………………….248
Appendix 12.1………………………………………………………250
D etailed C ontents
Chapter 13. Making Healthcare Safer for Patients…………………………253
Learning Objectives……………………………………………….253
Systems Model of Organizational Accidents………………..254
Creating High Reliability…………………………………………258
Measuring and Evaluating Safe Performance……………….262
Designing and Implementing Safety Improvements……..268
Summary……………………………………………………………..273
Companion Readings……………………………………………..276
Web Resources………………………………………………………278
References…………………………………………………………….278
Section 4 Practice Lab………………………………………………………………….. 283
Practice Exercise 1.
Reflective Journal ……………………………………285
Practice Exercise 2. The Manager’s Role…………………………………287
Practice Exercise 3. Dynamic Complexity……………………………….289
Practice Exercise 4. System Relationships………………………………..291
Practice Exercise 5. Meeting Customer Expectations………………..293
Practice Exercise 6. Organizational Self-Assessment………………….295
Practice Exercise 7.
Improving a Performance Gap in Your
Organization……………………………………..301
Practice Exercise 8. Teamwork and Patient Safety…………………….309
Practice Exercise 9. Improvement Case Study………………………….313
Practice Exercise 10. Systems Error Case Study and Analysis………..319
Practice Exercise 11. Failure Mode and Effects Analysis………………321
Glossary……………………………………………………………………………………..325
Index…………………………………………………………………………………………335
About the Authors…………………………………………………………………………353
About the Contributor…………………………………………………………………..355
xiii
A NOTE FROM DIANE L. KELLY
T
he quality landscape has changed dramatically since the first edition of
Applying Quality Management in Healthcare: A Process for Improvement
(2003). At that time, the Institute of Medicine reports To Err Is Human
(1999) and Crossing the Quality Chasm (2001) were still relatively new and
patient safety was in its early stages. The Premier Hospital Quality Incentive
Demonstration, the precursor to today’s value-based purchasing initiatives,
was just getting started. Transparency was in its infancy.
Fast-forward to today. The concept of systems is widely embraced in
healthcare and has become a cornerstone for driving improvements toward
achieving the Institute for Healthcare Improvement’s Triple Aim. Perverse
financial incentives, which punished organizations for reducing utilization by
improving care, are being challenged with a wide array of innovative payment
models that reward improvements in quality, safety, and health promotion.
The numerous and often disparate parts of the US healthcare system are
working together to improve the health of populations, not just to care for
sick individuals. The quality, safety, and systems concepts discussed in this book
have become foundational, essential, and timeless. They may be applied to any
type, size, level, or complexity of organizational forms.
I would like to thank the many students whom I have had the privilege
to get to know, work with, and learn from as a result of writing and teaching
with this text. I would also like to thank my mentor and friend, Dr. Arnold
Kaluzny. I am delighted that Patrice Spath is collaborating on this fourth edition
so that the book may continue to bring value to future students.
Diane L. Kelly, DrPH, MBA, RN
Principal Consultant
Quantix Health Capital
Columbus, OH
xv
PREFACE
S
everal years ago, I partnered with a physician, Dr. William Minogue, to
respond to an article in a medical journal that bemoaned the lack of
successful patient safety improvement initiatives. The article’s authors
suggested a new model was needed for conducting patient safety investigations
because the current way of doing things was not working. At the time, I was
facilitating training workshops for the Maryland Patient Safety Center, where
Dr. Minogue was the medical director. We both agreed that a new safety
investigation model was not the answer. This belief resulted in our coauthoring
an article on the subject for WebM&M, an online case-based forum on patient
safety sponsored by the Agency for Healthcare Research and Quality.
Our article began by reminding readers of the insights of Louis Pasteur,
who, throughout his career, “insisted that germs were the cause of disease, not
the body.” Near the end of his life, Pasteur changed his opinion and “declined
treatment for potentially curable pneumonia, reportedly saying, ‘It is the soil,
not the seed.’ In other words, a germ (the seed) causes disease when our bodies
(the soil) provide a hospitable environment” (Spath and Minogue 2008).
This lesson, discovered by Pasteur so many years ago, has application
to all quality improvement activities and is reinforced by the topics covered
in this book. The systems in health services organizations must be carefully
nurtured to create a hospitable environment for the many tools and techniques
of improvement to thrive. If the soil is not properly prepared, the seeds of
improvement will not take root or be sustainable. Dr. Diane Kelly, author of
the first three editions of this book, was insightful in taking a systems approach
to quality improvement. Dr. Kelly understood that preparing the “soil” of the
organization is just as important as learning how to use the various quality tools.
I am honored to have the opportunity to build on Dr. Kelly’s contributions
in this fourth edition.
This book is intended for managers—anyone who influences the design
of healthcare systems for the purpose of improving quality. It is not necessary
to hold the official title of manager in an organization to be instrumental in
creating and supporting higher-quality services. Many frontline, nonmanagerial
clinical and administrative staff members are directly or indirectly involved in
xvii
xviii
Prefa c e
shaping patient care systems and in using improvement techniques to design
more efficient, safer processes. Although the word manager is used liberally
throughout this book, it is not intended to narrow the audience or the purpose.
Anyone interested in making improvements in the quality and safety of health
services will benefit from the learning in these pages.
Changes from the Third Edition
The emphasis on systems in the third edition is still evident in this fourth edition.
What has changed is an expansion of information about quality tools, data
analysis techniques, and patient safety. As with all editions of this book, concepts
covered in the chapters are supported by real-life examples, illustrations, and
thought-provoking end-of-chapter exercises. Some chapters have been added
and others reordered. The book is now divided into three major sections
instead of two.
Section 1 provides students with the foundational principles of healthcare
quality and explains how systems affect an organization’s ability to accomplish
quality goals. The chapter on the role of policy in advancing quality (chapter 8
in the third edition) was moved to this section so students can better appreciate
how external forces affect system behavior and relationships as well as the quality
methods used by health services organizations (covered in later chapters). Some
of the material relevant to reliability and patient safety covered in this section
in the third edition has been moved to a new chapter dedicated solely to the
topic of patient safety.
Section 2 contains three chapters designed to illustrate what health
services organizations must do to set the stage for success in quality management
efforts. Because teamwork and collaboration are essential for advancing
healthcare quality, the teamwork chapter at the end of the third edition has
been expanded and moved to this section (chapter 8, “Fostering a Culture of
Collaboration and Teamwork”). Much of the information from chapter 10
has been moved to chapter 9 (“Measuring Process and System Performance”),
and some topics have been shifted to other related chapters.
The nuts and bolts of quality management are found in section 3. The
chapters in this section are expansions of topics covered in the third edition.
Instructors using the third edition in a quality course indicated the need for
more detailed explanations of quality models and the tools and techniques of
healthcare quality management. In addition, a new chapter has been added
(chapter 10, “Using Data Analytics Techniques to Evaluate Performance”).
This chapter covers basic concepts of healthcare data analytics, including how
to use various statistical and graphical methods for reporting and evaluating
Prefac e
performance data. Some of these methods were covered briefly in the third
edition, and some of the discussion is new to the fourth edition.
Materials on improvement models, project teams, and quality tools
are greatly expanded from the third edition and now covered in two separate
chapters (chapter 11, “Designing and Implementing Improvements,” and
chapter 12, “Using Improvement Teams and Tools”). In the third edition, the
various topics related to patient safety were dispersed among several different
chapters. Now, most of the material concerning patient safety is in a new chapter
(chapter 13, “Making Healthcare Safer for Patients”). This chapter is focused
entirely on systems issues affecting patient safety and methods for reducing
mistakes and preventing patient harm.
Health Administration Press now offers educators the opportunity to
build custom textbooks comprising chapters from several different books.
To accommodate this service, the chapters in the fourth edition of this book
have been written to stand alone as much as possible. Within each chapter,
references to material in other chapters have been minimized, or the concepts
summarized and repeated when necessary. Where there are linkages between
materials in various chapters, instructors are encouraged to point out these
relationships because the connections are not as clearly stated as in the third
edition.
Resources
Listed at the end of each chapter are companion readings and web resources.
Instructors can expand students’ learning experience by assigning a companion
reading or directing them to explore one or more of the online resources. These
readings and websites are particularly useful in the chapter on data analysis
techniques, if instructors want to cover more than just basic concepts. The
web resources also provide instructors and students with sources of the most
current information on relevant quality management and patient safety topics.
Patrice L. Spath, MA, RHIT
President
Brown-Spath & Associates
Forest Grove, OR
xix
xx
Prefa c e
Instructor Resources
This book’s Instructor Resources include explanations of the exercises, a test
bank, and PowerPoint slides.
For the most up-to-date information about this book and its Instructor
Resources, go to ache.org/HAP and browse for the book’s title or author
names.
This book’s Instructor Resources are available to instructors who adopt this
book for use in their course. For access information, please e-mail hapbooks@
ache.org.
Student Resources
For students, end-of-chapter exercises and web resources are available on this
book’s companion website at ache.org/books/qualitymanagement4.
Reference
Spath, P., and W. Minogue. 2008. “The Soil, Not the Seed: The Real Problem with
Root Cause Analysis.” Perspectives on Safety. Agency for Healthcare Research and
Quality. Published July. https://psnet.ahrq.gov/perspectives/perspective/62/
the-soil-not-the-seed-the-real-problem-with-root-cause-analysis.
ACKNOWLEDGMENTS
The primary person that I must thank is Diane Kelly, author of the first
three editions of this book. Her contributions to the learning experience of
innumerable students and seasoned professionals have been outstanding. I am
also grateful to the many people over the years who afforded me opportunities
to share knowledge through my books and journal articles. In particular, I’d like
to thank Janet Davis and Audrey Kaufman (the current and former acquisitions
managers at Health Administration Press, respectively) and Richard Hill (senior
editor at Health Forum, a unit of the American Hospital Association).
xxi
SECTION
QUALITY MANAGEMENT:
A SYSTEMS APPROACH
1
CHAPTER
QUALITY MANAGEMENT FUNDAMENTALS
1
Learning Objectives
After completing this chapter, you should be able to
• describe the vital role of management in achieving quality patient and
client health services;
• differentiate among key healthcare quality characteristics, common
approaches to quality improvement, and total quality principles; and
• recognize management practices and traits as organizations mature
along the quality continuum.
A
mother arrives at the pediatrician’s office for her daughter’s six-month
well-child checkup. As she has for previous checkups, she arrives 10
minutes early. Her daughter’s scheduled appointment time of 10:00
am passes and she is still waiting at 11:30 am. The front desk receptionist
politely tells the mother that the pediatrician has been called to an emergency,
saying, “I’m sure you understand. If it was your child, you would want the
doctor to attend to her.” Although the mother understands the reason for the
delay, this explanation does not change the fact that she has to pick up her son
from preschool at noon. The mother asks if her daughter can at least get the
immunizations today and have the rest of her checkup at another time. A clinic
nurse hurriedly administers the child’s immunizations while quietly complaining
to the mother that she is often too busy to get a lunch break.
Dissatisfied with the hours wasted at the pediatrician’s office and
disappointed with the need to return to finish her daughter’s checkup, the
mother begins to investigate other healthcare options for her children. While the
doctor at her current pediatric clinic seems highly trained and knowledgeable,
the mother has concerns about the organization in which the doctor practices.
The organizational aspects of the pediatric clinic are not meeting the mother’s
expectations. In the broadest definition, an organization is a structured system
designed to accomplish a goal or set of goals. In this example, the care providers
and office staff are a pediatric health services organization designed to deliver
healthcare to children.
organization
a structured
system designed
to accomplish a
goal or set of goals
3
4
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
This book focuses on managing the quality of the structured system
in which health services are delivered. Like any organization, the structured
system in the pediatric clinic is a by-product of numerous variables that
affect the design and execution of many interrelated factors. What are the
specific goals of the healthcare organization and how are they determined?
Does everyone in the organization understand and agree with these goals?
How are patient appointments, office workflow, and staff hours scheduled to
enable the practice to meet these goals? How are patient and family needs and
expectations taken into account? How are clinic employees recruited, hired,
trained, and evaluated? Does the pediatrician devote all of her time to the
office or does she also have hospital commitments? How is the pediatrician
compensated for services? How does reimbursement influence the office
structure and work systems? Does the practice operate according to a budget?
Does the practice employ an office manager? If so, how is the manager’s role
defined? How do the pediatrician and the staff communicate with each other
and with patients and their families?
These are just some of the questions that influence managerial decisions
about how the structured system will operate. In the example, the mother’s
experience resulted from how her pediatrician’s practice addressed such
organizational questions. This mother’s perception of quality had nothing
to do with the quality of the medical care. It had everything to do with the
organizational quality of the health services. The focus of this text is on
managing the structured systems of health-related services—within and between
organizations—to provide the highest-quality and safest healthcare.
Why Focus on Managing Systems?
Providing the medical care (e.g., performing cardiac surgery) and producing
the service (e.g., maintaining a clean environment) are functions of the clinical
and technical professionals. Creating and managing the structured system in
which clinical and technical professionals work is the role of management. The
manager’s perspective and tactics may vary depending on his organizational level
(e.g., senior administrative, middle management, frontline supervisory) and
his scope of responsibilities (e.g., team, project, department, division, agency,
organization-wide). Regardless, all persons holding management responsibilities
in an organization are charged with finding ways to carry out, coordinate, and
improve the organizational functions.
As illustrated by the mother’s experience at the pediatric clinic, patients
may not receive the benefits of good medical care when the system of delivery
is poorly managed. Quality is not simply the obligation of clinical and
technical professionals. The task of achieving quality outcomes from healthcare
C h a p te r 1: Q uality Managem ent Fundam entals
5
organizations is a shared responsibility belonging to those who provide medical
care and produce services and the management professionals who oversee the
system. Management determines how and what organizational goals are set; how
human, fiscal, material, and intellectual resources are secured, allocated, used,
and preserved; and how activities in the organization are designed, carried out,
coordinated, and improved. The material presented in this book is intended to
assist managers in the decision-making processes related to quality and safety
in health services organizations.
What Are Quality and Safety?
A widely accepted definition of quality as given by the Institute of Medicine
(IOM) is this: “The degree to which health services for individuals and
populations increase the likelihood of desired health outcomes and are consistent
with current professional knowledge” (Lohr 1990, 21). To further clarify the
concept of quality, the IOM (2001) identified the key components of quality
care: safe, effective, patient centered, timely, efficient, and equitable. Patient
safety, a key component of quality care, is defined as, “freedom from accidental
or preventable injuries produced by medical care” (Agency for Healthcare
Research and Quality [AHRQ] 2016b).
The way managers in health services organizations define and prioritize
quality in the context of their daily responsibilities is often influenced by their
own background and experiences. For example, a physician manager may
emphasize the importance of achieving optimal patient outcomes through
implementation of evidence-based medicine. A nurse manager or pharmacist
may stress the importance of interpersonal skills, teamwork, and patient-centered
care. A manager with public health credentials may take a population-based
approach to improving healthcare quality. Likewise, the educational focus
of nonclinical managers may influence the preferred quality definition and
priorities. A manager educated in a business school may emphasize operations
management, whereas someone trained as an accountant may focus on how
quality affects the financial bottom line. A manager with a health services
administration background may stress the importance of organizational
structures and stakeholder relationships.
These examples illustrate the assortment of perspectives and preferences
about health services quality and the numerous ways quality concerns may be
expressed in healthcare organizations. The multifaceted nature of quality poses
several additional questions and challenges for healthcare managers: What is
quality in healthcare? Which approach is best? How are the approaches related?
Since the early 1970s, Avedis Donabedian’s work has influenced the
prevailing medical paradigm for defining and measuring quality. In his early
quality
“the degree to
which health
services for individuals and populations increase
the likelihood of
desired health
outcomes and are
consistent with
current professional knowledge”
(Lohr 1990, 21)
key components of
quality care
quality care is safe,
effective, patient
centered, timely,
efficient, and equitable (IOM 2001)
patient safety
“freedom from
accidental or preventable injuries
produced by medical care” (AHRQ
2016b)
6
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
writings, Donabedian (1980) introduced the two essential components—the
technical and the interpersonal—that comprise quality medical care. He also
identified three ways to measure quality (structure, process, outcome) and
the relationships among them. Donabedian (1980, 79, 81–83) described the
measures in the following way:
process of care
“a set of activities
that go on within
and between
practitioners
and patients”
(Donabedian
1980, 79)
I have called the “process” of care . . . a set of activities that go on within and between
structure
“the relatively stable characteristics
of the providers of
care, of the tools
and resources
they have at their
disposal, and of
the physical and
organizational settings in which they
work” (Donabedian 1980, 81)
a change in a patient’s current and future health status that can be attributed to
outcome
“a change in a
patient’s current
and future health
status that can
be attributed to
antecedent healthcare” (Donabedian
1980, 83)
patient experience
a patient’s “report
of observations of
and participation
in health care, or
assessment of any
resulting change
in their health”
(AHRQ 2016a)
practitioners and patients. . . . Elements of the process of care do not signify quality
until their relationship to desirable health status has been established. By “structure”
I mean the relatively stable characteristics of the providers of care, of the tools and
resources they have at their disposal, and of the physical and organizational settings
in which they work. . . . Structure, therefore, is relevant to quality in that it increases
or decreases the probability of good performance. . . . I shall use “outcome” to mean
antecedent healthcare. The fundamental functional relationships among the three
elements are shown schematically as follows: Structure → Process → Outcome.
For example, in a family medicine group practice, the number and
credentials of physicians, nurse practitioners, physician’s assistants, nurses,
medical technicians, and office staff are considered structure measures. The
percentage of elderly patients who appropriately receive an influenza vaccine is
considered a process measure, and the percentage of elderly patients who are
diagnosed and treated for influenza is considered an outcome measure for this
practice. The staff members in the office (structure) influence the ability of the
practice to appropriately identify patients for whom the vaccine is indicated and
to correctly administer the vaccine (process), which in turn affects the number
of patients developing influenza (outcome). If a process measure has a clearly
demonstrated link to an outcome, the process measure may be used as a proxy
measure for an outcome (Parast et al. 2015)
When the IOM recognized patient-centered care as a key component
of twenty-first-century healthcare quality in 2001, the Donabedian model for
measuring quality expanded to include patient experience. Patient experience
measures are a subcategory of outcomes that represent the voice of patients—
their “report of observations of and participation in health care, or assessment
of any resulting change in their health” (AHRQ 2016a). For example, a family
practice clinic may have a good process for identifying patients needing an
influenza vaccine and qualified staff to correctly administer the vaccine, yet
patients may report their experience to be unsatisfactory if caregivers do not
listen to their concerns and adequately answer questions about the vaccination.
C h a p te r 1: Q uality Managem ent Fundam entals
7
While a health services manager can easily become overwhelmed by the
complexity and extensive range of views on the topic of healthcare quality, she
may also consider this array of perspectives as a vast pool from which to draw
quality-related knowledge and lessons.
Creating a Common Understanding of Quality Methods
As with most elements of management, the subject of quality in healthcare
organizations has been the object of numerous trends, fads, and attempts at
quick fixes. Because departments and professionals with “quality” responsibilities
may change their job titles with the latest trend, managers must understand what
is behind the label; in other words, they must understand the philosophy and
actions used to promote quality in an organization. The first step for managers
is to develop a common understanding of quality terminology. Definitions of
frequently used terms to describe quality are provided here.
Quality control. Mostly used in the manufacturing setting, quality
control (QC) encompasses “the operational techniques and activities used
to fulfill requirements for quality” (American Society for Quality [ASQ]
2016). In health services, quality control activities usually refer to equipment
maintenance and calibration, such as for point-of-care and laboratory testing,
imaging machines, and sterilization procedures.
Quality assurance. A quality assurance (QA) approach is focused on
the outputs of a process. Products are inspected after they are produced, and
imperfect products are discarded. In some cases, the defect may not be readily
noticeable and is replaced at a later time, as with a new automobile warranty.
In service organizations fields such as healthcare, defects refer to unsatisfactory
or defective outputs from a received service. The quality of the service is
inspected after it is received and, if not acceptable, the customer may ask for
the service to be repeated. For example, when the customer discovers that
a retail pharmacy includes only half the number of tablets in a prescription
refill, he asks for the refill to be corrected. Sometimes the service defect is
not readily noticeable, as in the case of a surgical sponge left in a patient after
an operation. As the patient’s condition deteriorates, tests are performed to
identify causes of the defective output. The patient must return to surgery for
the defect to be corrected.
Hearing QA and QC used interchangeably when “referring to the
actions performed to ensure the quality of a product, service or process” is
not uncommon (ASQ 2016).
Quality improvement. A quality improvement (QI) approach, also
referred to as continuous quality improvement (CQI), is focused on the ongoing
improvement of processes as a way to improve the quality of the outputs (i.e.,
quality control
(QC)
“the operational
techniques and
activities used to
fulfill requirements
for quality” (ASQ
2016)
quality assurance
(QA)
actions performed
to eliminate
defective outputs
quality
improvement (QI)
“ongoing improvement of products,
services or
processes through
incremental and
breakthrough
improvements”
(ASQ 2016)
8
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
total quality (TQ)
“a philosophy or
an approach to
management that can
be char-acterized by its
principles, practices,
and techniques. Its
three principles are
customer focus, continuous improvement,
and teamwork . . . each
principle is implemented through a set
of practices . . . the
practices are, in turn,
supported by a wide
array of techniques
(i.e., specific step-bystep methods intended
to make the practices
effective)” (Dean and
Bowen 2000, 4–5)
performance
management
“an umbrella term
that describes the
methodologies,
metrics, processes
and systems used
to monitor and
manage the business
performance of an
enterprise” (Buytendijk
and Rayner 2002)
Six Sigma
a rigorous and disciplined process
improvement approach
using defined tools,
methods, and statistical analysis with the
goal of improving the
outcome of a process
by reducing the frequency of defects or
failures
Lean (or Lean
thinking)
an improvement philosophy and set of
tools that “is about
finding and eliminating
waste in all processes”
(Black 2016, 6)
reduce the number of defective outputs). Preoperative checklists, sponge counts,
and team briefings are examples of operating room process improvements
designed to prevent defective outputs or surgical complications. By implementing
incremental and breakthrough improvements, QI seeks to produce defect-free
outputs and provide consistent high-quality services.
Total quality. The term total quality (TQ), also referred to as total
quality management or TQM, is often used interchangeably with “QI” and
“CQI.” This tendency can cause students and managers to be confused by the
two related but different concepts. Total quality is “a philosophy or an approach
to management that can be characterized by its principles, practices, and
techniques. Its three principles are customer focus, continuous improvement,
and teamwork . . . each principle is implemented through a set of practices
. . . the practices are, in turn, supported by a wide array of techniques (i.e.,
specific step-by-step methods intended to make the practices effective)” (Dean
and Bowen 2000, 4–5).
As shown by this definition, TQ is a strategic concept, whereas CQI is
one of three principles that support a TQ strategy. Numerous techniques—
including performance management, Six Sigma, and Lean—are available for
managers in implementing the principles of CQI on a tactical level and an
operational level. A brief description of these techniques is provided in the
following section with more detail in subsequent chapters.
Performance management. The business literature defines performance
management as “an umbrella term that describes the methodologies, metrics,
processes and systems used to monitor and manage the business performance of
an enterprise” (Buytendijk and Rayner 2002). Performance management is also
referred to as enterprise performance management (EPM), corporate performance
management (CPM), and business performance management (BPM).
Six Sigma. Six Sigma is a rigorous and disciplined approach using
process improvement tools, methods, and statistical analysis. Its precepts are
based on the philosophy “that views all work as processes that can be defined,
measured, analyzed, improved and controlled” (Muralidharan 2015, 528).
Six sigma is a statistical term referring to the goal of achieving zero defects or
failures. Six Sigma quality is considered a “rate of less than 3.4 defects per million
opportunities, which translates to a process that is 99.99966 percent defect
free” (Spath 2013, 125). Although the technique originated in manufacturing,
the use of Six Sigma is being encouraged in health services organizations as a
way of achieving high reliability (Chassin and Loeb 2013).
Lean. Sometimes called Lean thinking, Lean “is about finding and
eliminating waste in all processes” (Black 2016, 6). This quality philosophy
and set of tools, which also originated in manufacturing, is used to remove
wasted effort from healthcare processes without compromising quality (Chassin
and Loeb 2013). Lean techniques have helped health services organizations
C h a p te r 1: Q uality Managem ent Fundam entals
increase patient staff satisfaction, create more efficient processes, lower expenses,
reduce patient wait times, improve capacity management, and make many
other value-added, customer-focused enhancements (Black 2016). The Toyota
Production System (TPS) is a common method of applying Lean in health
services organizations.
Organizational effectiveness. Several models or definitions of effectiveness
in management literature exist, and the meanings are derived from the values
and preferences of evaluators (Cameron 2015). From the perspective of TQ,
organizational effectiveness means accomplishing goals.
Change management. Whether quality improvement is aimed at reducing
defects, removing wasteful process steps, or achieving better patient outcomes,
the work people do in the organization will be modified in minor and sometimes
major ways. Change management is a “systematic approach that prepares
an organization to accept, implement, and sustain the improved processes”
(Chassin and Loeb 2013, 481). A structure for managing the changes that
result from quality improvement efforts is essential for ensuring that quality
does not deteriorate as time passes, staff turnover occurs, and new priorities
emerge. Components of this strategy can include human resources planning,
financial and resource management, and implementation of a control system
that involves measurement and oversight of performance results (McLaughlin
and Olson 2012). A phrase often associated with change management is “sustain
the gains.”
Exhibit 1.1 provides a summary of the quality-related terms described in
this section and the influence these concepts have on the actions of healthcare
managers.
Quality management. Continuously improving products and services
to achieve better performance is often referred to as quality management.
In this book, the term quality management is used to describe the manager’s
role and contribution to organizational effectiveness. Quality management,
for our purposes, refers to how managers working in various types of health
services organizations and settings understand, explain, and continuously
improve their organizations to allow them to deliver quality and safe patient
care, promote quality patient and organizational outcomes, and improve health
in their communities.
Three Principles of Total Quality
Total quality is based on three principles: customer focus, continuous
improvement, and teamwork. While these topics are explored in depth in later
chapters, a brief introduction to these principles is provided in this section.
9
Toyota Production
System
a common method
of applying Lean in
health services, first
developed at the Toyota Motor Company
organizational
effectiveness
the ability to accomplish goals
change management
a “systematic
approach that prepares an organization
to accept, implement,
and sustain the
improved processes”
(Chassin and Loeb
2013, 481)
quality management
the manager’s role
and contribution
to organizational
effectiveness; how
managers working
in various types of
health services organizations and settings
understand, explain,
and continuously
improve their organizations to allow
them to deliver quality and safe patient
care, promote quality
patient and organizational outcomes,
and improve health in
their communities
10
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
EXHIBIT 1.1
Quality-Related
Terms
customer
the user or
potential user
of services or
programs
external customer
a user outside the
organization
internal customer
a user inside the
organization
stakeholder
“all groups that
are or might be
affected by an
organization’s
services, actions
or success” (BPEP
2015, 53)
Quality-Related Term
Relevant Manager Actions
Quality control
Fulfill process requirements
Quality assurance
Find and repair faulty processes causing
defective outputs
Quality improvement/continuous
quality improvement
Incrementally and continuously improve
processes
Performance management
Continuously review, evaluate, and improve
performance to meet changing customer,
stakeholder, and regulatory requirements
Six Sigma
Aggressively improve processes and reduce
variation to achieve zero defects
Lean/Lean thinking
Seek better ways to organize human actions
and processes to eliminate waste
Total quality/total quality
management
Manage using a customer focus, continuous
improvement, and teamwork
Organizational effectiveness
Understand and improve the system to
achieve goals
Change management
Use systematic methods to transition
individuals, teams, and the organization
Customer. A customer is defined as a user (or potential user) of services
or programs. Patients are customers, as are referring healthcare providers, as
well as payers such as patients’ family members and health plans (Baldrige
Performance Excellence Program [BPEP] 2015).
External customers are the parties outside the organization, and the
primary external customers for health services providers are patients, families
and partners, clients, insurers and other third-party payers, and communities.
An internal customer is a user inside of the organization. Internal customers
have been described as “someone whose inbox is your outbox.” For example,
in a hospital, when patient care is handed off from one provider to another at
shift change, the incoming provider is considered the internal customer of the
outgoing provider. Completing the requisite shift responsibilities in a timely
manner, communicating relevant information, and leaving a tidy work space
demonstrate one’s recognition of coworkers as internal customers.
The contemporary view of quality management expands the concept
of “customer” to include stakeholders and markets in which the organization
operates. The term stakeholder is used to refer to “all groups that are or might
be affected by an organization’s services, actions or success” (BPEP 2015,
53). In healthcare organizations, key stakeholders may include “customers,
the community, employers, health care providers, patient advocacy groups,
C h a p te r 1: Q uality Managem ent Fundam entals
departments of health, students, the workforce, partners, collaborators,
governing boards, stockholders, donors, suppliers, taxpayers, regulatory bodies,
policy makers, funders, and local and professional communities” (BPEP 2015,
53).
Customer-focused quality means that key patient and other customer
requirements and expectations are identified and drive improvement efforts
(BPEP 2015). Defining customers and stakeholders is a prerequisite to
determining their requirements and, in turn, to designing organizational
processes that meet these requirements.
Continuous improvement. When the manager of an environmental
services department in a large hospital picks up something from the hallway
floor and throws it away in the nearest trash can, her action exemplifies the
principle of continuous improvement. While other hospital employees might
walk past the trash, the environmental services manager realizes the importance
of being committed to continuous improvement for her department and for
the hospital; if at any time the manager sees something that needs fixing,
improving, or correcting, she takes the initiative. If managers want to achieve
continuous improvement in their organizations, they must demonstrate
continuous improvement through their everyday actions.
The principle of continuous improvement may also be expressed through
managers’ execution of their managerial functions. Managing by fact and
depending on performance data to inform decisions is requisite to this principle.
Though they might vary according to the nature of the work and the scope of
management responsibility, performance data may be reported at various time
intervals. For example, a shift supervisor for the patient transportation service
in an 800-bed academic medical center watches the electronic dispatch system
that displays a minute-by-minute update on transportation requests, indicators
of patients en route to their destinations, and the number of patients in the
queue. By monitoring the system, the supervisor is immediately aware when
a problem occurs and, as a result, is able to take action quickly to resolve the
problem. If the number of requests unexpectedly increases, the supervisor can
reassign staff breaks to maximize staff availability and minimize response times.
Each day, the supervisor posts the total number of transports performed
the previous day, along with the average response times. This way, the patient
transporters are aware of the department’s statistics and their own individual
statistics, which helps the transporters take pride in a job that is typically
underappreciated by others in the organization. The daily performance data
also enable the supervisor to quickly identify documented complaints and to
address them within 24 hours, which in turn increases employee accountability
and improves customer relations. On a monthly basis, the department manager
and the shift supervisors review the volume of requests by hour of the day to
determine whether employees are scheduled appropriately to meet demand.
11
customer-focused
quality
a type of quality
in which key
patient and
other customer
requirements and
expectations are
identified and
drive improvement
efforts
12
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
continuous
improvement
steady, incremental improvement in
the organization’s
overall
performance
teamwork
a team process
involving the
“knowledge, skills,
experience, and
perspectives of different individuals”
(Health Resources
and Services
Administration
2011, 3)
The manager also reviews the statistics sorted by patient unit (e.g., nursing
unit, radiology department) to identify any issues that need to be explored
directly, manager to manager. The manager reviews the monthly statistics
with his administrator, and the annual statistics are used in the budgeting
process. A performance management system such as this promotes continuous
improvement, which is defined as steady, incremental improvement in the
organization’s overall performance.
Teamwork. When the terms teamwork and quality are used together,
management is usually referring to cross functional or interdisciplinary project
teams. Healthcare organizations seeking to make changes in complex processes
or activities that involve more than one discipline or work area often use
a team approach. Quality improvement is fundamentally a team process in
which significant and lasting improvements rely on the “knowledge, skills,
experience, and perspectives of different individuals” (Health Resources and
Services Administration 2011, 3).
In relation to quality management, managers should also consider
teamwork when they carry out functions inherent in the managerial role—in
particular, organizational design, resource allocation, and communication.
Designing and implementing decision-making, documentation, and
communication processes (which ensure individuals and teams have the
information they need, when they need it, to make effective and timely clinical
and organizational decisions) reflect a manager’s understanding of the quality
management principles. For example, in one hospital, the manager of the
materials management department negotiates with a supplier to obtain surgical
gloves at a discounted rate compared with the rate of the current supplier. The
decision is made based on vendor and financial input. The first time the new
gloves are used, however, the surgeon rips out the fingers of the gloves while
inserting his hand. Had the manager embraced the concept of teamwork in
her approach to decision making, she would have sought out information and
input from the patient care team—the people who actually use the product and
know the advantages and disadvantages of different brands of gloves.
Quality Continuum for Organizations
Quality management is not a single event; rather, it is an organizational
journey. Progress along the journey may be viewed on a continuum, with one
end representing traditional or early attempts at quality and the other end
representing more mature approaches (exhibit 1.2). Regulatory, accreditation,
and cost-control pressures, as well as consumer activism, are accelerating the
quality journey of health services organizations. These external factors are
described in more detail in the next chapter.
C h a p te r 1: Q uality Managem ent Fundam entals
Less Mature
Developing
More Mature
Quality priorities
Complying
with quality
requirements
of external
stakeholders is
an operational
imperative
Internal quality
improvement is
one of three or
four strategic
priorities
Internal quality
improvement is the
organization’s top
strategic priority
Quality scope
Internal
customers
Internal and
external
customers and
stakeholders
Internal and
external customers
and stakeholders
and the community
served
Quality
transparency
Key quality
measures
not reported
internally
throughout the
organization and
not reported
publicly
Key quality
measures
reported
internally
throughout the
organization; few
reported publicly
Key quality
measures
reported internally
and publicly;
reports include
benchmark data
from best practice
organizations
Quality methods
No organizationwide approach
to quality
improvement
Data-driven,
statistical
methods
used in some
improvement
initiatives
Managers trained
in data-driven,
statistical methods
that are used for
all improvement
initiatives
Performance
measures
Only measures
used are
those required
by external
stakeholders
In addition
to measures
required
by external
stakeholders,
internal
measures are
used to evaluate
quality priorities
of managers
In addition to
measures required
by external
stakeholders,
internal measures
linked to the
quality goals of the
organization are
used
Information
technology (IT)
There is little or
no IT support for
quality activities
IT supports some
quality activities,
but many are still
paper based
IT support is
provided for all
quality activities
Source: Adapted from Chassin and Loeb (2013).
13
EXHIBIT 1.2
Quality
Continuum
for Healthcare
Organizations
14
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
Although a healthcare organization may occupy a point anywhere along
this maturity continuum, the goal of quality management is to continually
strive toward the most mature end of the continuum. An understanding
of the quality continuum in health services organizations begins to explain
differences in operations and outcomes in organizations that all claim to be
“quality organizations,” such as
• how an organization can be successful at quality projects but not attain
a quality organizational culture;
• why some organizations have adjusted better than others to current
oversight practices of regulatory groups and accreditation agencies;
• why implementing clinical practice guidelines does not in itself
guarantee healthcare quality;
• why operations management efforts, independent of clinical context,
may not yield expected results; and
• why, without leadership’s involvement in establishing a quality
philosophy and strategy for the entire organization, only pockets of
excellence may be found in an organization.
Summary
Achieving organizational effectiveness requires leaders to combine the knowledge
of management and quality to understand and improve the organization.
This chapter has introduced various terms and approaches to help managers
establish a common vocabulary for quality in their organizations. The path to
becoming a mature, quality organization is a process characterized by transitions
in managerial philosophy, thinking, and action.
Exercise 1.1
Objective: To explore the current state of healthcare quality in the United
States.
Instructions:
• Go to the AHRQ website (https://nhqrnet.ahrq.gov/inhqrdr) and
find the most current version of the National Healthcare Quality and
Disparities report.
• Read the Executive Summary.
• Browse the rest of the report.
C h a p te r 1: Q uality Managem ent Fundam entals
• Based on your brief review of this report, summarize the state of
healthcare quality and disparities in the United States in one or two
paragraphs.
Companion Readings
Health Resources and Services Administration. 2011. Quality Improvement. US
Department of Health and Human Services. Published April. www.hrsa.gov/
quality/toolbox/508pdfs/qualityimprovement.pdf.
Institute of Medicine (IOM). 2001. Crossing the Quality Chasm: A New Health System
for the 21st Century. Washington, DC: National Academies Press.
Web Resources
Agency for Healthcare Research and Quality: www.ahrq.gov
American Society for Quality: www.asq.org
National Association for Healthcare Quality: www.nahq.org
Public Health Foundation: www.phf.org
References
Agency for Healthcare Research and Quality (AHRQ). 2016a. “Domain Framework
and Inclusion Criteria: Domain Definitions.” Updated March 17. www.quality
measures.ahrq.gov/about/domain-definitions.aspx.
———. 2016b. “Patient Safety Network Glossary.” Accessed June 25. www.psnet
.ahrq.gov/glossary.aspx.
American Society for Quality (ASQ). 2016. “Quality Glossary.” Accessed June 25.
www.asq.org/glossary/index.html.
Baldrige Performance Excellence Program (BPEP). 2015. 2015–2016 Baldrige Excellence
Framework: A Systems Approach to Improving Your Organization’s Performance
(Health Care). Gaithersburg, MD: US Department of Commerce, National
Institute of Standards and Technology.
Black, J. 2016. The Toyota Way to Healthcare Excellence: Increase Efficiency and Improve
Quality with Lean, 2nd ed. Chicago: Health Administration Press.
Buytendijk, F., and N. Rayner. 2002. “A Starter’s Guide to CPM Methodologies.”
Research Note TU-16-2429. Stamford, CT: Gartner, Inc.
15
16
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
Cameron, K. 2015. “Organizational Effectiveness.” In Wiley Encyclopedia of
Management, vol. 11, 1–4. Published January. http://onlinelibrary.wiley.com/
doi/10.1002/9781118785317.weom110202/abstract.
Chassin, M. R., and J. M. Loeb. 2013. “High-Reliability Health Care: Getting There
from Here.” The Milbank Quarterly 91 (3): 459–90.
Dean, J. W., Jr., and D. E. Bowen. 2000. “Management Theory and Total Quality:
Improving Research and Practice Through Theory Development.” In The
Quality Movement and Organization Theory, edited by R. E. Cole and W. R.
Scott, 3–22. Thousand Oaks, CA: SAGE Publications.
Donabedian, A. 1980. Explorations in Quality Assessment and Monitoring. Vol. 1 in
The Definition of Quality and Approaches to Its Assessment. Chicago: Health
Administration Press.
Health Resources and Services Administration. 2011. Quality Improvement. US
Department of Health and Human Services. Published April. www.hrsa.gov/
quality/toolbox/508pdfs/qualityimprovement.pdf.
Institute of Medicine (IOM). 2001. Crossing the Quality Chasm: A New Health System
for the 21st Century. Washington, DC: National Academies Press.
Lohr, K. N. (ed.). 1990. Medicare: A Strategy for Quality Assurance. Washington, DC:
National Academies Press.
McLaughlin, D. B., and J. R. Olson. 2012. Healthcare Operations Management, 2nd
ed. Chicago: Health Administration Press.
Muralidharan, K. 2015. Six Sigma for Organizational Excellence: A Statistical Approach.
New York: Springer.
Parast, L., B. Doyle, C. L. Damberg, K. Shetty, D. A. Ganz, N. S. Wenger, and P. G.
Shekelle. 2015. “Challenges in Assessing the Process–Outcome Link in Practice.”
Journal of General Internal Medicine 30 (3): 359–64.
Spath, P. L. 2013. Introduction to Healthcare Quality Management, 2nd ed. Chicago:
Health Administration Press.
CHAPTER
ROLE OF POLICY IN ADVANCING QUALITY
2
Learning Objectives
After completing this chapter, you should be able to
• describe the types of oversight organizations that influence healthcare
quality;
• recognize how public and private policies encourage quality
improvement at the organizational, community, and national levels; and
• identify resources to maintain current knowledge about policy changes,
new initiatives, and updates on current initiatives.
T
he most visible or well-known topics of healthcare policy tend to be those
related to funding, payment, and access. Examples include Titles XVIII
and XIX, the Social Security Act amendments of 1965 that created
Medicare and Medicaid; the Balanced Budget Act of 1997 that created the
Children’s Health Insurance Program (CHIP); and the Patient Protection and
Affordable Care Act of 2010 (ACA). There are many other public and private
policies that play an integral role in ensuring the quality of healthcare services.
Licensure is an example of how healthcare quality is affected by
public health policies. Physicians, nurses, nurse practitioners, pharmacists,
physical therapists, and other care providers must have licenses to practice
their professions. These requirements are guided by the statutes and rules
outlined in the professional practice acts and occupational licensing bodies
of their respective states. There are many other examples of how public and
private policies influence healthcare quality. The Americans with Disabilities Act
requires health facilities to have ramped sidewalks to the front door and Braille
numbers on the elevator buttons. Sprinklers in the ceilings, signs labeled “fire
exit,” and alarm-activated doors that close automatically are mandated by state
building codes and the fire safety requirements of state regulations and private
health facility oversight groups. Inappropriate or excessive radiation exposure
to patients and healthcare personnel during diagnostic exams is prevented
when facilities comply with the requirements of the Occupational Safety and
17
18
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
licensure
status granted by a
governmental body
and confirming minimum standards
accreditation
“a public recognition by a healthcare
accreditation body of
the achievement of
accreditation standards by a healthcare
organization, demonstrated through an
independent external
peer assessment of
that organization’s
level of performance
in relation to the
standards” (Smits,
Supachutikul, and
Mate 2014, 66)
certification
a form of external
quality review for
health services
professionals and
organizations; when
applied to individuals, it represents
advanced education
and competence;
when applied to
organizations, it
represents meeting
predetermined standards for a specialized service provided
by the organization
(Rooney and van
Ostenburg 1999).
EXHIBIT 2.1
Types of
Healthcare
Quality
Oversight
Organizations
in the United
States
Health Administration and private oversight entities. The safety and efficacy of
medications are investigated by the US Food and Drug Administration before
they are released for patient use.
Considering the Donabedian (1980) model for measuring quality
(structure, process, outcome), policy initiatives have historically targeted the
quality of the structural elements of the healthcare delivery system, such as
people, physical facilities, equipment, and drugs. Outcome measures, such as
infant mortality rates and life expectancy, and aggregate process measures, such
as immunization rates, have been collected for many years by the public health
infrastructure at state, national, and international levels. Current health quality
policy initiatives target outcomes and processes at the organization, provider,
and population levels.
This chapter discusses the increasingly important role of public and
private policies on healthcare quality by providing a brief overview of health
policy concepts, explaining the role of quality oversight bodies, and introducing
several healthcare quality initiatives that demonstrate the use of public and
private policies to drive system change and improvement.
External Stakeholders Affecting Quality
A variety of external stakeholders—federal, state, and local government
agencies and private organizations—set quality expectations and assess and
monitor services delivered by health plans, health facilities, integrated delivery
systems, and individual practitioners. Types of quality oversight organizations
are summarized in exhibit 2.1.
External stakeholders use three primary approaches to influence
healthcare quality: licensure, accreditation, and certification. Licensure is
granted by a governmental body and represents minimum quality standards,
while accreditation and certification are granted by nongovernmental
State licensing bodies. States, typically through their health departments,
have long regulated healthcare delivery through the licensure of healthcare
institutions such as hospitals, long-term care facilities, and home health
agencies, as well as individual healthcare practitioners such as physicians and
nurses. States also license, through their insurance and health departments,
financial “risk-bearing entities,” including both indemnity insurance products
and those managed care products that perform the dual function of bearing
risk (like an insurer) and arranging for or delivering healthcare services (like
healthcare-providing entities).
(continued)
C h a p te r 2: Role of Polic y in A dvanc ing Q uality
Private sector accrediting bodies. Accrediting bodies set standards for healthcare
organizations and assess compliance with those standards. They also focus on
the operation and effectiveness of internal quality improvement systems. In some
functional areas, state and federal governments rely on or recognize private
accreditation for purposes of ensuring compliance with licensure or regulatory
requirements.
Medicare and Medicaid compliance. For a healthcare entity to receive Medicare
or Medicaid reimbursement, the entity must meet certain federally specified
conditions of participation (CoPs) or other standards. The Centers for Medicare &
Medicaid Services (CMS) promulgates CoPs for hospitals, home health agencies,
nursing facilities, hospices, ambulatory surgical centers, renal dialysis centers,
rural health clinics, outpatient physical therapy and occupational therapy, and
rehabilitation facilities. CMS also establishes standards for the participation of
managed care organizations contracting under the Medicare program.
US Department of Labor. Oversight of certain aspects of employer-provided
health plans is performed by the US Department of Labor. The Employee
Retirement Income Security Act of 1974 sets minimum federal standards for
group health plans maintained by private-sector employers, by unions, or jointly
by employers and unions. The department oversees plan compliance with the
following legal requirements of plan administration: reporting and disclosure of
plan features and operations, fiduciary obligations for management of the plan
and its assets, handling benefit claims, continuation coverage for workers who
lose group health coverage, limitations on exclusions for preexisting conditions,
prohibitions on discrimination based on health status, renewability of group
health coverage for employers, minimum hospital stays for childbirth, and parity
of limits on mental health benefits.
Individual certification and credentialing organizations. The American Board
of Medical Specialties (an umbrella for 24 specialty boards) and the American
Osteopathic Association have certification programs that designate certain
medical providers as having completed specific training in a specialty and having
passed examinations testing knowledge of that specialty. The Accreditation
Council for Graduate Medical Education, sponsored by the American Medical
Association and four other organizations, accredits nearly 7,700 residency
programs in 1,600 medical institutions across the United States. For nursing,
the American Board of Nursing Specialties sets standards for the certification
of nursing specialties. The largest numbers of nurses, both in generalist and
specialist practice, are certified by the American Nurses Credentialing Center on
the basis of practice standards established by the American Nurses Association.
Source: Data from President’s Advisory Committee on Consumer Protection and Quality in the Health
Care Industry (1998).
19
EXHIBIT 2.1
Types of
Healthcare
Quality
Oversight
Organizations
in the United
States
(continued)
20
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
organizations. Accreditation and certification represent optimal quality standards
for organizations or advanced education and competence for individuals.
Quality oversight organizations are vital stakeholders of health services
organizations. Their standards, regulations, and conditions of participation
(CoPs) increasingly drive system change and improve quality of care and
services. Details on the specific laws, regulations, and impact of healthcare
quality may be found in other texts dedicated to health policy and healthcare
management. In the next sections, a few key examples of external stakeholders
(public and private) and how they influence healthcare quality are provided.
Because the priorities and expectations of external stakeholders are constantly
changing, students and managers charged with quality responsibilities will
need additional resources to learn about the most current requirements of all
stakeholder groups affecting their organization. The web resources at the end
of this chapter are useful for this purpose.
Federal Health Policies and Oversight
public policy
“authoritative
decisions made
in the legislative,
executive, or judicial branches of
government that
are intended to
direct or influence
the actions, behaviors, or decisions
of others” (Longest
2010, 5)
health policies
policies that
“pertain to health
or influence the
pursuit of health”
(Longest 2010, 6)
The federal government is a vital stakeholder of health services organizations.
Its regulations, CoPs, and health policy priorities are increasingly being used
to drive system change and improve quality of care and services. Details on
specific laws and regulations that affect healthcare quality may be found in
other texts dedicated to health policy. This section presents a few key examples
that illustrate the role of policy in system improvement. A brief background
on the evolution of these initiatives is also provided so readers may appreciate
the influence of history on the current healthcare quality landscape.
The US government serves the following generic purposes: “to provide
for those who cannot provide for themselves, to supply social and public goods,
to regulate the market, and to instill trust and accountability” (Tang, Eisenberg,
and Meyer 2004, 48). To accomplish these purposes, the government uses
public policy or “authoritative decisions made in the legislative, executive, or
judicial branches of government that are intended to direct or influence the
actions, behaviors, or decisions of others” (Longest 2010, 5). Some of these
public policies are considered health policies because they “pertain to health
or influence the pursuit of health” (Longest 2010, 6). Health policies are
crafted to influence health determinants, which in turn influence health. The
ACA (US Department of Health and Human Services [HHS] 2015) was the
most significant legislation resulting from public health policy since enactment
of the Medicare and Medicaid programs in 1965.
However, the federal government’s influence extends beyond the ACA.
In 2011, the HHS published National Strategy for Quality Improvement in
Health Care. This document outlined the National Quality Strategy, a road map
C h a p te r 2: Role of Polic y in A dvanc ing Q uality
21
for achieving affordability, better care, and healthy people and communities. The
recommendations in this document affect all healthcare stakeholders—patients;
providers; employers; health insurance companies; academic researchers; and
local, state, and federal governments (HHS 2011). Each year, the road map is
reviewed and revised as needed to reflect current priorities and performance
results (Agency for Healthcare Research and Quality [AHRQ] 2016b).
The three broad aims of National Strategy for Quality Improvement in
Health Care guide the local, state, and national efforts to improve health and
the quality of healthcare. These aims include the following (AHRQ 2014):
• Better care. Improve overall quality by making healthcare more patientcentered, reliable, accessible, and safe.
• Healthy people/healthy communities. Improve the health of the US
population by supporting proven interventions to address behavioral,
social, and environmental determinants of health in addition to
delivering higher-quality care.
• Affordable care. Reduce the cost of quality healthcare for individuals,
families, employers, and the government.
The many legislative, regulatory, and reimbursement changes necessary
to support the National Quality Strategy are affecting quality management at
the provider level. Two notable changes came from federal legislation passed
before the National Quality Strategy. The Health Information Technology for
Economic and Clinical Health Act, enacted as part of the American Recovery
and Reinvestment Act of 2009, promoted the adoption and meaningful use
of health information technology (Jha 2012). This legislation has influenced
the transition to electronic health records to improve the quality and safety of
the healthcare system. The large federal subsidies for adopting this technology
and financial disincentives have made the conversion from paper to electronic
records possible in many organizations.
The ACA may also support the National Quality Strategy by encouraging
healthcare organizations to form accountable care organizations (ACOs)
to bring about efficiencies in consumption of services while lowering overall
costs. An ACO is a network of providers (primarily doctors and hospitals) that
share financial and medical responsibilities for providing coordinated care to
patients in hopes of limiting unnecessary spending (Gold 2015).
Knowledge Acquisition
Public policy at the federal level creates formal structures and mechanisms for
acquiring new knowledge so that public and private policymakers may make
informed, evidence-based decisions about health quality practices. For example,
accountable care
organization (ACO)
a network of providers (primarily
doctors and hospitals) that share
financial and medical responsibilities
for providing coordinated care to
patients in hopes
of limiting unnecessary spending
(Gold 2015)
22
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
the AHRQ sponsors and conducts research and disseminates information to
advance healthcare quality (see exhibit 2.2).
Another example is the Innovation Center at CMS (2016a), which the
ACA created “for the purpose of testing innovative payment and service delivery
models to reduce program expenditures . . . while preserving or enhancing
the quality of care for those individuals who receive Medicare, Medicaid, or
Children’s Health Insurance Program (CHIP) benefits.” Best practices and
lessons learned from these tests are made available to all healthcare organizations
to support quality improvement throughout the healthcare system at large.
Several of the innovation models being tested have the potential to greatly affect
quality and safety improvement activities at the provider level (see exhibit 2.3).
One initiative of the CMS Innovation Center is a nationwide public–
private collaboration called Hospital Engagement Networks (HEN). These
networks work at the regional, state, national, or hospital-system level to help
identify solutions already working and disseminate them to other hospitals
and providers. Initially, the CMS Innovation Center formed 26 HENs in
2012 as part of a campaign to reduce harm and improve the quality and
safety of healthcare. Many of these networks were successful at achieving this
goal. For instance, the 127 hospitals participating in the Iowa-based HEN
prevented potential harm to more than 4,300 patients in 2013 and reduced
healthcare costs by more than $51 million according to data released by the Iowa
Healthcare Collaborative (Iowa Hospital Association 2014), which administers
EXHIBIT 2.2
Agency for
Healthcare
Research and
Quality
Mission. To support research designed to improve the quality, safety, efficiency,
and effectiveness of healthcare for all Americans. The research sponsored,
conducted, and disseminated by AHRQ provides information that helps people
make better decisions about healthcare.
Created. The agency was founded in December 1989 as the Agency for Health
Care Policy and Research, a public health service agency in the HHS. Reporting
to the HHS secretary, the agency was reauthorized on December 6, 1999, as the
Agency for Healthcare Research and Quality. Sister agencies include the National
Institutes of Health, the Centers for Disease Control and Prevention, the Food
and Drug Administration, the Centers for Medicare & Medicaid Services, and the
Health Resources and Services Administration.
Main functions. AHRQ sponsors and conducts research that provides evidencebased information on healthcare outcomes; quality; and cost, use, and access.
The information helps healthcare decision makers—patients and clinicians,
health system leaders, purchasers, and policymakers—make more informed
decisions and improve the quality of healthcare services.
Source: Adapted from AHRQ (2016a).
C h a p te r 2: Role of Polic y in A dvanc ing Q uality
Accountable care. Accountable care organizations and similar care models are
designed to incentivize healthcare providers to become accountable for a patient
population and to invest in infrastructure and redesigned care processes that
provide for coordinated care, high quality, and efficient service delivery.
Episode-based payment initiatives. Under these models, healthcare providers are
held accountable for the cost and quality of care that beneficiaries receive during
an episode of care, which usually begins with a triggering healthcare event (such
as a hospitalization or chemotherapy administration) and extends for a limited
time thereafter.
Primary care transformation. Primary care providers are a key point of contact for
patients’ healthcare needs. Strengthening and increasing access to primary care
is critical to promoting health and reducing overall healthcare costs. Advanced
primary care practices—also called medical homes—use a team-based approach
while emphasizing prevention, health information technology, care coordination,
and shared decision making among patients and their providers.
Initiatives focused on Medicaid and CHIP populations. Medicaid and CHIP are
administered by the states but are jointly funded by the federal government
and the states. Initiatives in this category are administered by the participating
states.
Initiatives focused on Medicare and Medicaid enrollees. The Medicare
and Medicaid programs were designed with distinct purposes. Individuals
enrolled in both Medicare and Medicaid (called dual eligibles) account for a
disproportionate share of the programs’ expenditures. A fully integrated, personcentered system of care that ensures all enrollees’ needs are met could better
serve this population in a high-quality, cost-effective manner.
Initiatives to accelerate the development and testing of new models. Many
innovations necessary to improving the healthcare system will come from local
communities and healthcare leaders from across the country. By partnering with
these local and regional stakeholders, CMS can help accelerate the testing of
models today that may be the next breakthrough tomorrow.
Initiatives to speed the adoption of best practices. Recent studies indicate that
it takes nearly 17 years, on average, before best practices (practices backed by
research) are incorporated into widespread clinical practice—and even then
the application of the knowledge is very uneven. The CMS Innovation Center
is partnering with a broad range of healthcare providers, federal agencies,
professional societies, and other experts and stakeholders to test new models
for disseminating evidence-based best practices and significantly increasing
the speed of adoption.
Source: Data from CMS (2016b).
23
EXHIBIT 2.3
Categories of
New Payment
and Service
Delivery Models
Being Tested
by the CMS
Innovation
Center
24
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
the network. To sustain this national progress and momentum, in 2015 CMS
awarded a second round of contracts to 17 HENs, which include more than
3,200 hospitals (CMS 2015a).
CMS also promotes local implementation of quality practices through its
network of Quality Improvement Organizations (QIOs). The Medicare QIO
Program (formerly referred to as the Medicare Utilization and Quality Control
Peer Review Program) was created by statute in 1982 to improve quality and
efficiency of services delivered to Medicare beneficiaries (Leavitt 2006, 2).
Today, the QIO Program comprises 14 regional Quality Innovation Networks
designed to “bring Medicare beneficiaries, providers, and communities together
in data-driven initiatives that increase patient safety, make communities healthier,
better coordinate post-hospital care, and improve clinical quality” (Quality
Improvement Organizations 2016).
Transparency
Transparency is a vital component of an efficient and effective healthcare system,
as it fosters improved management of the cost and quality of health services
(Wetzel 2014). In 1987, an unprecedented effort at nationwide healthcare
performance transparency occurred when the Health Care Financing Agency
(HCFA), now known as CMS, produced its first annual report of “observed
hospital-specific mortality rates for Medicare acute care hospitals” (Cleves
and Golden 1996, 40). The goal of this HCFA transparency initiative was to
produce “better information to guide the decisions of physicians, patients,
and the agency, thus improving outcomes and the quality of care” (Roper et
al. 1988, 1198).
This initial transparency strategy set the stage for using federal policy to
systematically develop and implement expectations, requirements, methodology,
and infrastructure to collect, publish, and disseminate performance data
measuring beneficiaries’ quality of care. The mortality data reports were
discontinued in 1994 and the focus turned to gathering and reporting
performance data for high-volume, high-cost clinical conditions and patient
experiences.
The specific performance data that healthcare organizations are required
to report to CMS change each year. Many of the organization-specific quality
performance data currently being reported can be found on the Medicare
website (www.medicare.gov). In addition to quality measures for hospitals, the
public has access to performance data for nursing homes, home health providers,
and dialysis facilities. Making performance results more transparent—enabling
stakeholders to assess healthcare quality and compare providers—is intended
to encourage healthcare organizations to take steps toward improving health
services. Refer to the web resources box for more information about these
measurement and reporting initiatives.
C h a p te r 2: Role of Polic y in A dvanc ing Q uality
25
Financial Incentives
The inpatient prospective payment system (IPPS) implemented by CMS in
the 1980s focused on containing the increasing costs of hospital care. The
next phase of financial incentives is focusing on improving the value of health
services. Value is the ratio of quality to cost (value = quality/cost). Section
5001(c) of Deficit Reduction Act of 2005 required CMS to identify conditions
that “could reasonably have been prevented through the application of evidencebased guidelines” (CMS 2015b). As of October 1, 2008, CMS denied additional
payment for these hospital-acquired conditions (HACs), also known as never
events, when patients developed one during a hospital stay (CMS 2015b). For
example, when a patient got a HAC, such as a surgical-site infection following
coronary artery bypass graft, the hospital would be paid as though this infection
were not present.
To understand how CMS has refocused the IPPS on value, consider
the historical role of clinical complications and hospital payment. If a surgical
sponge was accidently left inside the patient after surgery and the patient
required another surgery to remove it, both surgeries were billed to the payer.
The HAC financial incentive in the IPPS was designed to ensure that CMS
would not pay for complications that should not have occurred in the first
place. In addition, it was intended to encourage hospitals to adopt evidencebased practices to prevent never events from occurring.
To date, the success of this approach to financially incentivizing hospital
quality improvements has been mixed. Waters and colleagues (2015) studied
the association between Medicare’s nonpayment policy and four of the more
common HACs: central line–associated bloodstream infections (CLABSIs),
catheter-associated urinary tract infections (CAUTIs), hospital-acquired pressure
ulcers (HAPUs), and injurious inpatient falls. “Medicare’s nonpayment policy
was associated with an 11% reduction in the rate of change in CLABSIs . . .
and a 10% reduction in the rate of change in CAUTIs, but was not associated
with a significant change in injurious falls . . . or HAPUs” (Waters et al. 2015,
347). The authors concluded that reductions in the rates of CLABSI and
CAUTI resulted from implementation of better hospital processes, whereas
little evidence exists that changing hospital processes can lead to reductions
in HAPUs or injurious inpatient falls (Waters et al. 2015).
A continued focus on value is the theme of contemporary healthcare
quality policy at the federal level. The Medicare Access and CHIP Reauthorization
Act of 2015 introduced two value-based payment models for physicians that
have an impact on quality management: a Merit-Based Incentive Payment
System and alternative payment models. These value-based payment models
are intended to strengthen the relationship between physician payment and
quality practices such as efficient use of healthcare resources and clinical
improvements. These changes to the Medicare payment system for physicians
value
the ratio of quality
to cost (value =
quality/cost)
hospital-acquired
conditions (or
never events)
medical conditions
that “could reasonably have been
prevented through
the application of
evidence-based
guidelines” (CMS
2015b)
26
A p p lyin g Q u a l i ty M a n a g e me n t i n H e a l thc are: A Sy stem s A p p roac h
are not expected to be implemented for several years. It will be essential for
physicians and healthcare facilities to understand how these payment models
work so they can determine how and where to focus a systems approach to
improving performance (Bassett 2016).
Private Health Policies and Oversight
Accreditation bodies are private, nongovernmental groups with policies
and standards that encourage healthcare quality and safety improvement.
Accreditation is voluntary, which means that, unlike public policies and
oversight, healthcare organizations can choose whether to comply with an
accreditation group’s private policies and be subject to its oversight.
The Joint Commission is a nongovernmental accreditation organization
for several types of health services organizations: ambulatory care, behavioral
health care, critical access, home care, hospitals, laboratory services, nursing
care, and office-based surgery. The Joint Commission also offers certification for
disease-specific services for conditions such as chronic kidney disease and stroke
and for programs such as palliative and perinatal care and primary care medical
homes. For more information, see its website at www.jointcommission.org.
The National Committee for Quality Assurance (NCQA) offers
accreditation programs for health plans and related organizations and programs
such as wellness and health promotion and disease management. The NCQA
also offers a variety of certifications; for a fuller description, see www.ncqa.org.
The national Public Health Voluntary Accreditation Board was
established to “improve and protect the health of the public by advancing
the quality and performance of Tribal, state, local, and territorial public
health departments” (Public Health Accreditation Board 2016). Additional
accreditation organizations are listed in the web resources box.
Organizations seeking CMS approval to participate in federally funded
insurance programs such as Medicare and Medicaid may undergo state surveys
on behalf of CMS or be surveyed by an accrediting body approved by CMS.
Some private accreditation groups such as The Joint Commission, DNV GL,
the Healthcare Facilities Accreditation Program, and the Institute for Medical
Quality have been granted deemed authority by CMS. An organization accredited
by one of these groups “would have ‘deemed status’ and would not be subject
to the Medicare survey and certification process because it has already been
surveyed by the accrediting organization” (Ame…