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Costs of Poor Quality

Patient Safety Quality Monthly, January 15, 2009

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I was just going through some of the research I did a few years ago on the costs of poor quality and came across the following information, which is still true today.

In the 2002 BMJ medical publication of the year [BMJ 2002;324:1478 (June 22)] there is an article on the conclusions of a study led by the Juran Institute, which found that "$39 billion a year is being wasted on outmoded and inefficient procedures in the United States." The article also stated that "30% of all direct healthcare spending was the result of poor quality care including overuse, misuse and waste."

The main cause of waste was cited as unnecessary administrative activity. According to the article, authors of the study said "A number of experts believe that the potential to reduce cost by eliminating inefficiency is enormous."

In the article, CMS was quoted as saying that "US spending on healthcare will likely exceed $1 trillion by 2011, equivalent to over 6% of projected gross domestic product."

"A number of experts believe that the potential to reduce cost by eliminating inefficiency is enormous."

How can we begin to chip away at this inefficiency? Look at your clinical processes and:

• Gather data on errors
• Look for common causes
• Map processes
• Eliminate waste
• Determine if the right person is doing the right thing at the right time
  • Competencies (do we have the right staff?)
  • Staff allocation (multidisciplinary integration at the bedside)

At Greeley, we call this Process-Driven Integrated Care (PDIC).

For more information on Process-Driven Integrated Care and reducing the costs of poor quality, contact Sharon Courage.

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