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A Plan for Safety, Quality, and Performance Improvement in a Declining Economy

Patient Safety Quality Monthly, March 12, 2009

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The financial news just keeps bearing down on us. Fortunately, healthcare is not getting buffeted as violently as the banks and car makers—at least not yet. So what do we, in the safety, quality, and risk areas, need to be doing to prepare ourselves and our organizations for a long, tough road ahead?

I suggest that we all need to step back and make sure that the quality, safety, and performance improvement activities are really the right ones for a tightening economy. If we are doing the wrong things, the economic pressure will pile up on us and our organizations—and, ultimately, some won't survive. We need a simple plan.

The following are key areas we need to be thinking about in a declining economy:

1. Rapidly get your process management activities under way and under control. We have been so focused on outcomes that the understanding and management of what "goes on under the hood" has fallen behind. The pressure is going to turn up on all of us to know our processes inside out and be able to make them hum like a good race car mechanic.
   1. Make your list of processes now!
   2. Do a quick assessment of which processes have the largest impact on the organization
   3. Focus
   4. Don't reinvent the wheel; get rid of "not invented here" and beg or borrow the best practices you can find and implement the most useful parts
2. Become best friends with your CFO. The decisions over the next five years will be driven by keeping organizations alive and providing the best possible care. If we in the quality, safety, and performance improvement world can't talk the language of the CFO, we will not be helping them succeed, and they will not be helping us in our areas. The CFO may not be your daily contact, but we need to be talking to them and their staff as frequently as we are talking to the folks on the floor. This will take some cultural realignment in some organizations — but you have to do it. Do you invite the financial analysts to your committee or PI meetings?
3. Make safety, quality, and performance improvement a profit stream through reducing cost of poor quality (COPQ). Always remember that there are two key profit streams in the organization:
   1. One is generated by patients coming in the door. We get to keep a part of the amount we charge for their care as profit, either for the stakeholders or to reinvest in the organization. The more profitable patients coming for care the better off we are. That's why we advertise and market—to get patients to come to our facility.
   2. The second stream is generated by reduction in our Cost Of Poor Quality (COPQ). COPQ is all the money and resources we spend that we really don't have to (waste). All those no-pay events, all those unused surgical packs, all those increased length of stay events, all the extra time we spend after a fall or medication event, even if no one was hurt. They are all COPQ. This is our world! Every dollar we can help the organization save is direct profit saved. If you reduce COPQ by $100,000 and your organization generally makes a 2% profit, your savings is the same as increasing the sales of patient care services by $5,000,000! Make sure you can demonstrate your profit contribution!

Next month we will continue with the next parts of the plan and some thoughts on how to start putting this plan into action at your facilities.

Ken Rohde

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