Social Responsibility, that is, is now Politically Correct. ISO has a new standard, ISO 26000: Guidance on Social Responsibility, that defines what it means for a company to be “socially responsible.” The standard strives to make social and environmental considerations part of decision making, and sustainability is a big part of this.
To accomplish this, the standard identifies seven principles that should be applied to seven core subject areas within the organization. The principles are: accountability, transparency, ethical behavior, respect for stakeholders, respect for the law, respect for norms of behavior, and respect for human rights.
The seven areas of the organization where these principles might apply are: governance, human rights, labor practices, the environment, fair operating practices, consumer issues, and community involvement.
I’m sure motherhood and apple pie are in there someplace. Much of this was written from a Western cultural point of view.
The first question is, will it sell? Altruism goes just so far, and without some regulation or competitive advantage, SR will have limited penetration. There is, indeed some evidence for a financial advantage. First, there is a correlation between “admired companies” and SR. Most admired companies (e.g. Apple) have an easier time hiring good employees, and, whether cause or effect, their employees tend to be more productive and more loyal.
A study done for BITC in 2010 showed that SR friendly companies outperformed their peers in the FTSE 350 index and recovered faster after the financial downturn. It stands to reason that companies with more efficient resource utilization will do better when resources become more expensive.
But it isn’t always so obvious. Take farming. You’d think that a farmer would not want 25% of the fertilizer he buys to get washed out into the Chesapeake bay. However, the American Farm Bureau Federation (“The Voice of Agriculture”) is suing the EPA so farmers can continue to do exactly that. A 2003 report on the bay said the nation’s largest estuary continues to decline because of over-fishing and pollution. (Much of that pollution is due to farm run-off.)
But what about healthcare? What does SR mean for healthcare? What about your carbon footprint? Is your building LEED certified? OK, how about Energy star certified--that’s feasible. Are alll the light bulbs LED? (CF’s are old hat now.)
How do patients get there? Employees? I worked in a hospital once where all employees were required to pay commercial rates for parking at work. Once visited a hospital that started its own bus line to bring in patients. The more you think about this, the more ideas come to mind. Perhaps that’s the real value of a new standard.
And patient care processes. Applying LEAN principles can help with more efficient use of resources which reduces the carbon footprint as well as costs, while pleasing patients at the same time. Here’s one place where a quality professional can help--what tools to use where, and help getting started. Another, of course, is conformance to the ISO 26000 standard.
The ancient oath of Primo non nocere, or First do no harm, was intended to apply to harming patients. It could be expanded conceptually to include society in general. Genichi Taguchi is quoted as suggesting that a “service demonstrated good quality if its production and use caused little to no harm to society.” Read that again and think broadly of the environment.
First you have to care. The rest is easy.
Monday, March 7, 2011
Wednesday, February 9, 2011
Speaking and Listening
If you were granted five minutes with any individual or group to improve healthcare in the U.S., where would you go and what would you say? With so little time, you’d want to find the fulcrum--the leverage point to amplify your message. Perhaps a physician group, for they order the tests and procedures that make our healthcare the most expensive in the world. Perhaps hospital administrators. Those tests and procedures are done in their facilities. Would you “raise your voice” and implore them to inject “quality” into their healthcare practices? What does “quality” look like? How much does it weigh?
Used to be that quality meant statistical analysis of assembly line output. Then Deming pointed his finger at management. Today, we hear about process improvement, LEAN, and TPS. Then, there are dashboards and Six Sigma and myriad other tools. So which is the magic bullet? The key to success.
Rene Dubois, the shepherd of the French anti-smoking efforts talked about the variety of initiatives his group had done over many years to achieve a notable and unlikely success. Someone asked what was the most important factor--the key to success, and he replied, “You have to do it all.” There is no shortcut. Managers must be nimble and skillful in selecting the right tool at the right moment. This requires knowledge. It’s not possible to pull a book off the shelf when you need to do a Root Cause Analysis or produce a Pareto chart to decide where to start. The knowledge must be available in the minds of well trained employees.
Above all, however, there must be a goal. We must know what improvement would look like. Where are we going? Then, we can employ the tools to get us there.
For this, my five minutes would distill into one minute and no slides:
“Take this as your goal: Make everything you do cost less next year than it did last year. Every service, every procedure, every product must cost less than before. Go forth and do good work."
Used to be that quality meant statistical analysis of assembly line output. Then Deming pointed his finger at management. Today, we hear about process improvement, LEAN, and TPS. Then, there are dashboards and Six Sigma and myriad other tools. So which is the magic bullet? The key to success.
Rene Dubois, the shepherd of the French anti-smoking efforts talked about the variety of initiatives his group had done over many years to achieve a notable and unlikely success. Someone asked what was the most important factor--the key to success, and he replied, “You have to do it all.” There is no shortcut. Managers must be nimble and skillful in selecting the right tool at the right moment. This requires knowledge. It’s not possible to pull a book off the shelf when you need to do a Root Cause Analysis or produce a Pareto chart to decide where to start. The knowledge must be available in the minds of well trained employees.
Above all, however, there must be a goal. We must know what improvement would look like. Where are we going? Then, we can employ the tools to get us there.
For this, my five minutes would distill into one minute and no slides:
“Take this as your goal: Make everything you do cost less next year than it did last year. Every service, every procedure, every product must cost less than before. Go forth and do good work."
Monday, January 10, 2011
Resolutionists
They fill the health club in January. It's so easy to see how the world ought to be. But attendance drops off as they discover there is work involved. Physical work. And pain. And sacrifice. By March their resolve begins to dissolve, and the health club is mine again.
Will healthcare be different? Will we be able to lose some weight? The continuous expansion of costs in our healthcare system resembles an over 40 waistline, and changing the paradigm that generates these costs will win a spot on the "Biggest Loser." Doing nothing, however, is a threat to our economy and to the healthcare system itself. There is always the chance that Congress will recognize the problem and do something no one will like.
So, let's make some resolutions to reduce costs in healthcare in 2011.
1. Become more efficient. More than that, let's set up a mechanism for becoming more efficient. This means that the effort will continue beyond initial success. Perhaps a team with training in Lean and associated disciplines. These folks will roam the halls, helping various process owners wring the waste out of what they are doing.
2. Integrate and communicate with physician groups. Look for ways to share information and resources. Get surgeons to schedule their own cases via the internet. Why should a patient have to register in the hospital when they are a known patient in the surgeon's office? And we can schedule the post op visits from the hospital recovery room. Look for seamless integration and transparency for the patient. These techniques will save time and money for everyone.
3. Promote and reward wellness among healthcare employees. They should be an example for the community. There are lots of examples from industry. Pick one . . . or two . . . or twenty-two. Make it happen. Don't forget to collect data to demonstrate success.
4. Look at the visitor/family experience in any healthcare institution. These are future customers, and a captive audience. What do they need but don't know it yet? How about a health assessment while you're waiting?
6. Prepare to compete. Select at least one process and make it world class in terms of the patient experience and the profit margin. Next year, do something else.
7. Try to maintain our resolve beyond March.
Will healthcare be different? Will we be able to lose some weight? The continuous expansion of costs in our healthcare system resembles an over 40 waistline, and changing the paradigm that generates these costs will win a spot on the "Biggest Loser." Doing nothing, however, is a threat to our economy and to the healthcare system itself. There is always the chance that Congress will recognize the problem and do something no one will like.
So, let's make some resolutions to reduce costs in healthcare in 2011.
1. Become more efficient. More than that, let's set up a mechanism for becoming more efficient. This means that the effort will continue beyond initial success. Perhaps a team with training in Lean and associated disciplines. These folks will roam the halls, helping various process owners wring the waste out of what they are doing.
2. Integrate and communicate with physician groups. Look for ways to share information and resources. Get surgeons to schedule their own cases via the internet. Why should a patient have to register in the hospital when they are a known patient in the surgeon's office? And we can schedule the post op visits from the hospital recovery room. Look for seamless integration and transparency for the patient. These techniques will save time and money for everyone.
3. Promote and reward wellness among healthcare employees. They should be an example for the community. There are lots of examples from industry. Pick one . . . or two . . . or twenty-two. Make it happen. Don't forget to collect data to demonstrate success.
4. Look at the visitor/family experience in any healthcare institution. These are future customers, and a captive audience. What do they need but don't know it yet? How about a health assessment while you're waiting?
6. Prepare to compete. Select at least one process and make it world class in terms of the patient experience and the profit margin. Next year, do something else.
7. Try to maintain our resolve beyond March.
Wednesday, December 15, 2010
A Change in the Weather
Paul Borawski announced a project with ASQ and IBM to look at Social Responsibility--see what works and whether there is a business case. We're left wondering exactly what "Social Responsibility (SR)" means and what "works" would look like. For some, it means taking care of the homeless. For others, it's reducing your carbon footprint. For most of us, something in between, a consciousness of your corporate role in society. Being a responsible citizen means not dumping pollutants into the environment, for example. (Are you listening Shell, BP, Massey Energy, etc.?) A business case could mean obtaining a platinum rating for your new building, new solar panels on your roof. Efficient use of energy and other resources.
One interesting aspect of all this is that the American Society for Quality is doing it. Well, maybe ASQ is doing it. They are not emphasizing what the initials stand for as they strive for a global presence and move out of strictly "quality" initiatives. If you've followed my writing long, you know I think quality has become a slang word--no real defined meaning, something people invoke when they don't want to talk about other things, like cost.
Just returned from a meeting of the Healthcare Division of ASQ, where there was considerable discussion about how to improve healthcare, but not much talk about quality. It's process improvement, LEAN thinking. The greatest improvement is needed in reducing the cost of healthcare, not improving quality, and that will be done by improving the processes of delivering healthcare services.
All this comes with a recent article in JAMA titled "The End of the Quality Improvement Movement" in which the authors posit that the QI movement has produced no measurable results in the past 40 years, at least not in healthcare. Maybe it's time to change out thinking.
Maybe it's time to take the word quality out of our vocabulary and define more precisely what we are talking about. So let's change our focus to SR or LEAN or Value Stream Mapping or some other way to reduce the cost of healthcare. Your children will thank you for it.
One interesting aspect of all this is that the American Society for Quality is doing it. Well, maybe ASQ is doing it. They are not emphasizing what the initials stand for as they strive for a global presence and move out of strictly "quality" initiatives. If you've followed my writing long, you know I think quality has become a slang word--no real defined meaning, something people invoke when they don't want to talk about other things, like cost.
Just returned from a meeting of the Healthcare Division of ASQ, where there was considerable discussion about how to improve healthcare, but not much talk about quality. It's process improvement, LEAN thinking. The greatest improvement is needed in reducing the cost of healthcare, not improving quality, and that will be done by improving the processes of delivering healthcare services.
All this comes with a recent article in JAMA titled "The End of the Quality Improvement Movement" in which the authors posit that the QI movement has produced no measurable results in the past 40 years, at least not in healthcare. Maybe it's time to change out thinking.
Maybe it's time to take the word quality out of our vocabulary and define more precisely what we are talking about. So let's change our focus to SR or LEAN or Value Stream Mapping or some other way to reduce the cost of healthcare. Your children will thank you for it.
Icon Under Attack
The deficit reduction committee has recommended canceling the Baldrige Award program as a way of saving money, and ASQ thinks this is a bad idea. It’s worth noting her that ASQ is not a disinterested observer here. They get paid for administering the program, so this proposal would mean a significant revenue hit for them. What about the rest of us? As Bryzinski remarked about the Wikileaks release of State Department cables, it would be “catastrophic but not serious.” The Baldrige Award was launched at a time when U.S. industry was having difficulty competing in world markets because of the poor quality of their goods and services. The Award sought out examples of excellence in hopes that others would emulate them and thus improve the overall quality of U.S. industry. For many years, awards were presented in manufacturing, service, and small business. Eventually, the list was expanded to include healthcare and education.
Has it helped? A recent study of NC hospitals by RAND suggests not. They found no change in the indicators created by NQF or AHRQ over the past 10 years. This may be a bit unfair, because the Baldrige “Criteria for Performance Excellence” were not written to satisfy the NQF or AHRQ. They were written to make business more competitive. Since there is little to no competition within healthcare, one might argue that the Baldrige award is irrelevant.
Furthermore, it’s not clear that we have a quality problem in U.S. healthcare. For the past 10 years, it has been popular to bash our healthcare system and make derogatory comparisons with other countries. Most of these articles cite criteria that have little to do with healthcare, per se, or relate more to governmental systems. For example, prior to the recent healthcare reform legislation, we had an access problem in America. There were 47 million people who did not have health insurance and thus had problems with access. However, once they got into the system, the quality of their care was excellent. We have arguably the best healthcare in the world. If you have breast cancer, your chance of having that discovered and your treatment are better here than any other country. An article last year in the Atlantic began with “If I lived in New Zealand, I’d be dead now.” The reason was that the anti-cancer drug she was taking was not approved in New Zealand, or in England either for that matter. England has its NICE committee to decide what healthcare the government will pay for. This is similar conceptually to the “Clinical Effectiveness Committee” proposed for this country.
For another example, look at longevity--life expectancy. At the bottom end of the scale, this seems related to per capita income which presumably relates to access to healthcare among other factors. Once you are out of the gutter, there are strange bedfellows. I have never seen a statistical analysis to see whether being 16th or 17th is really different from being 10th or 12th. One comes away with the feeling that life expectancy relates more to genetics, environmental factors (clean air and water)--but not to healthcare.
In addition to breast cancer, one disease that does relate to healthcare is treatment for cardiac disease, and we do that better than anyone.
At the time of the debate over health reform legislation, the two primary problems with U.S. healthcare were noted as access and cost--not quality. The legislation largely fixed the access problem but did nothing to address cost. Peter Orzag has spoken and written eloquently about this and the deficit reduction commission included Medicare expenditures in their plan for the future. Our healthcare just costs too much.
The Baldrige criteria were designed to make industry more competitive, but there is no competition in healthcare, only a network of local monopolies. There is no question that the Criteria for Performance Excellence have improved the operations of hospitals and healthcare systems where they have been employed. But it is doubtful that there has been any impact on healthcare in general. Is this benefit worth the cost of a national award system? As part of that debate, Congress should not ignore the industry that has grown up to help institutions apply for the award. If it goes away, it will be missed, but the sun will still come up. Catastrophic but not serious.
Has it helped? A recent study of NC hospitals by RAND suggests not. They found no change in the indicators created by NQF or AHRQ over the past 10 years. This may be a bit unfair, because the Baldrige “Criteria for Performance Excellence” were not written to satisfy the NQF or AHRQ. They were written to make business more competitive. Since there is little to no competition within healthcare, one might argue that the Baldrige award is irrelevant.
Furthermore, it’s not clear that we have a quality problem in U.S. healthcare. For the past 10 years, it has been popular to bash our healthcare system and make derogatory comparisons with other countries. Most of these articles cite criteria that have little to do with healthcare, per se, or relate more to governmental systems. For example, prior to the recent healthcare reform legislation, we had an access problem in America. There were 47 million people who did not have health insurance and thus had problems with access. However, once they got into the system, the quality of their care was excellent. We have arguably the best healthcare in the world. If you have breast cancer, your chance of having that discovered and your treatment are better here than any other country. An article last year in the Atlantic began with “If I lived in New Zealand, I’d be dead now.” The reason was that the anti-cancer drug she was taking was not approved in New Zealand, or in England either for that matter. England has its NICE committee to decide what healthcare the government will pay for. This is similar conceptually to the “Clinical Effectiveness Committee” proposed for this country.
For another example, look at longevity--life expectancy. At the bottom end of the scale, this seems related to per capita income which presumably relates to access to healthcare among other factors. Once you are out of the gutter, there are strange bedfellows. I have never seen a statistical analysis to see whether being 16th or 17th is really different from being 10th or 12th. One comes away with the feeling that life expectancy relates more to genetics, environmental factors (clean air and water)--but not to healthcare.
In addition to breast cancer, one disease that does relate to healthcare is treatment for cardiac disease, and we do that better than anyone.
At the time of the debate over health reform legislation, the two primary problems with U.S. healthcare were noted as access and cost--not quality. The legislation largely fixed the access problem but did nothing to address cost. Peter Orzag has spoken and written eloquently about this and the deficit reduction commission included Medicare expenditures in their plan for the future. Our healthcare just costs too much.
The Baldrige criteria were designed to make industry more competitive, but there is no competition in healthcare, only a network of local monopolies. There is no question that the Criteria for Performance Excellence have improved the operations of hospitals and healthcare systems where they have been employed. But it is doubtful that there has been any impact on healthcare in general. Is this benefit worth the cost of a national award system? As part of that debate, Congress should not ignore the industry that has grown up to help institutions apply for the award. If it goes away, it will be missed, but the sun will still come up. Catastrophic but not serious.
Monday, November 8, 2010
Passion in November
In his November blog for ASQ, Paul Borawski talks about the passion of "members of the quality community" and business leaders who have seen principles of quality managaement improve their products and services . . . and their bottom line. One thing many in the healthcare arena don't recognize, however, is that quality is not a goal in and of itself. One doesn't improve quality and then say "mission accomplished." The tools and techniques of quality management are just that--tools to be used in the attainment of another goal. The biggest problem with U.S. healthcare today (and yesterday) is that it costs too much. Yes, we do sometimes provide too much care, and if patients took better care of themselves, they wouldn't need so much care. But at the end of the day, individual healthcare services just cost too much. It doesn't have to be so. The tools and techniques in the quality toolkit can be used to reduce costs, but this has not been done in healthcare. True, there are examples of using LEAN or other tools to make healthcare processes more efficient, but in no case has this reduced the cost of a healthcare service. Indeed it shouldn't, because the reimbursement structure is such that no institution would charge less than insurance is willing to pay. Imagine, however, if there were price competition in healthcare. If you don't reduce the price you charge, you will lose market share. Now, quality becomes a very important tool for competing in a regional market. If you want to perform total hip replacements, you will have to find a way to do them cheaper than your competitor and to make money doing that. Quality to the rescue.
To some extent, I think those in the academic healthcare quality community are responsible for this failure. They have used "quality" to avoid focusing on the true goal of reducing cost. Who could be against a focus on quality healthcare? But ask that question again after you define quality healthcare as the same service at a lower cost. We could use quality tools to bend the curve on healthcare costs if institutions had the motivation to do so. It is possible. Many industries have done exactly that, and healthcare could also.
AHRQ denies that cost is a factor in efficiency in healthcare. The Institute of Medicine listed efficiency as one of the aims but then denied that cost was a factor in their definition. The NQF convened a panel on efficiency in healthcare but announced at the beginning that they would not talk about cost. (Now THERE's a feat of showmanship!) The great fear, of course, is that price competition would reduce physician or institutional income. Initially, this might be true, but eventually, the more efficient use of time and resources would improve the bottom line for everyone. If you read deeply in the "Medical Home" literature, you eventually see that this is a way to improve the productivity of family practice offices. Physicians spend their time doing things only they can do, while others perform tasks they are specifically trained to do.
Most of healthcare today is a commodity. Generally, when products and services become commodities, the price comes down. This has not happened in healthcare, partly because of the interjection of third parties into the purchase decision--payment process, and partly because of the monopoly that most most hospitals hold in their communities.
Once there is motivation to improve healthcare, the quality community will be ready with tools and the passion to reduce cost or move toward whateve new goal comes up.
To some extent, I think those in the academic healthcare quality community are responsible for this failure. They have used "quality" to avoid focusing on the true goal of reducing cost. Who could be against a focus on quality healthcare? But ask that question again after you define quality healthcare as the same service at a lower cost. We could use quality tools to bend the curve on healthcare costs if institutions had the motivation to do so. It is possible. Many industries have done exactly that, and healthcare could also.
AHRQ denies that cost is a factor in efficiency in healthcare. The Institute of Medicine listed efficiency as one of the aims but then denied that cost was a factor in their definition. The NQF convened a panel on efficiency in healthcare but announced at the beginning that they would not talk about cost. (Now THERE's a feat of showmanship!) The great fear, of course, is that price competition would reduce physician or institutional income. Initially, this might be true, but eventually, the more efficient use of time and resources would improve the bottom line for everyone. If you read deeply in the "Medical Home" literature, you eventually see that this is a way to improve the productivity of family practice offices. Physicians spend their time doing things only they can do, while others perform tasks they are specifically trained to do.
Most of healthcare today is a commodity. Generally, when products and services become commodities, the price comes down. This has not happened in healthcare, partly because of the interjection of third parties into the purchase decision--payment process, and partly because of the monopoly that most most hospitals hold in their communities.
Once there is motivation to improve healthcare, the quality community will be ready with tools and the passion to reduce cost or move toward whateve new goal comes up.
Tuesday, October 5, 2010
People and Populations
Here is one of those classic struggles--between the individual and the country as a whole. If you're an individual over 65, then a PSA might be of interest to you. But if you're buying healthcare for 100 million people, you would never pay for a PSA. Sure, a few men would die because their prostate cancer went undetected. But not many, and they're dead now. Same for mammograms under age 50. Now, the Rand corp has produced a study showing that if you have a hip replacement, the long term results and mortality are better if you get rehab services post op. But it's cheaper to send the old folks directly home. So what do you do? That depends on whether you're concerned with the individual or with the population.
And that's what it's all about. To save money--and we need to do that--some patients will have to accept less that optimal results. Sometimes that's OK. I remember as a medical student seeing a man in the ER who had mostly cut off the tip of his finger in a machine at work. My first thought was to ship him off to the university plastic surgeons to re-attach his finger tip. Nope. The plant doctor arrived, nipped off a bit of bone and soft tissue, and closed the now shorter finger. "This man is not a violinist. He's a carpenter. I can have him back at work within a week." He was right, of course, but he never asked the patient.
We'll have to do some of this. The biggest problem with U.S. healthcare today is that it costs too much. Not so much that we provide too much of it, but the unit cost is too high. An appendectomy or a hip replacement just cost too much--more than they need to. The easy answer is price competition to force providers to find creative ways to reduce their costs and subsequently their prices. It can be done. It has been done in other industries. We can do it too, but we have to try.
Yesterday, I listened to a woman talking about federal healthcare plans--the health insurance that's offered to government workers. She talked about Sarasota, FL, a town with a very expensive hospital. The health insurance plan tried unsuccessfully to bargain with that hospital and eventually contracted with another hospital about 10 miles away. This woman called the plan executive and ordered him to include the expensive hospital in his policy, regardless of the cost. This is not the way to lower healthcare costs. Some hospitals need to be priced out of existence, but we need the courage to do that. Many--perhaps most--locations in the U.S. have a dominant hospital that "must" be included in any local health insurance policy. And that defeats competition. As others have pointed out, U.S. healthcare is a series of local monopolies. Until we are willing to put out an RFP for hip replacements, it will be difficult to control costs.
And that's what it's all about. To save money--and we need to do that--some patients will have to accept less that optimal results. Sometimes that's OK. I remember as a medical student seeing a man in the ER who had mostly cut off the tip of his finger in a machine at work. My first thought was to ship him off to the university plastic surgeons to re-attach his finger tip. Nope. The plant doctor arrived, nipped off a bit of bone and soft tissue, and closed the now shorter finger. "This man is not a violinist. He's a carpenter. I can have him back at work within a week." He was right, of course, but he never asked the patient.
We'll have to do some of this. The biggest problem with U.S. healthcare today is that it costs too much. Not so much that we provide too much of it, but the unit cost is too high. An appendectomy or a hip replacement just cost too much--more than they need to. The easy answer is price competition to force providers to find creative ways to reduce their costs and subsequently their prices. It can be done. It has been done in other industries. We can do it too, but we have to try.
Yesterday, I listened to a woman talking about federal healthcare plans--the health insurance that's offered to government workers. She talked about Sarasota, FL, a town with a very expensive hospital. The health insurance plan tried unsuccessfully to bargain with that hospital and eventually contracted with another hospital about 10 miles away. This woman called the plan executive and ordered him to include the expensive hospital in his policy, regardless of the cost. This is not the way to lower healthcare costs. Some hospitals need to be priced out of existence, but we need the courage to do that. Many--perhaps most--locations in the U.S. have a dominant hospital that "must" be included in any local health insurance policy. And that defeats competition. As others have pointed out, U.S. healthcare is a series of local monopolies. Until we are willing to put out an RFP for hip replacements, it will be difficult to control costs.
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