Defining and demonstrating quality in healthcare can be an elusive proposition, but it need not be as complex as many imagine. Stated simply, the way to define quality is to describe the aspects of your operation that positively impact your business and have meaning to your clients and patients, and then measure performance accordingly. Quality is important; and when it can be measured, monitored, and reported, the results are improved outcomes, reduced costs, increased profitability, and competitive advantage. The quality-improvement process requires only three clearly identifiable initiatives:

• define quality performance standards;
• measure and document performance against the defined quality criteria;
• analyze performance using benchmarking data.

Organizations can prove their excellence when they measure and document their performance against a set of quality standards. The proficiency with which they perform against their quality indicators reveals their level of quality. Metric-based standards are the stretch goals of an organization, each observable and measurable. Exceptions (failures or defects) are counted, documented, and analyzed, mobilizing a corrective process. Ultimately, the process leads to new or adjusted quality standards, thereby creating continuous quality improvement.

Define Quality Standards

Part 1 of this series¹ described formal quality recognition entities such as ISO-9000, JCAHO, Baldridge National Quality Program, and others. These entities provide proprietary sets of standards against which performance can be measured and accredited or certified. Such quality standards can also be used to foster improvement against the internal goals of an organization by creating a framework for improvement activities. (Click here if you wish to review Part 1.)

One example of a quality standard that might be set by an occupational health center is, "Patient waiting-room time will not exceed twenty minutes." This very simple statement is quite possibly a stretch goal for the organization. Performance to this goal can be measured, documented, and reported to clients. Reporting might be expressed as the percentage of quality goal attained or as a continuous improvement rate. This is an objective process, filled with marketing and contracting currency. Clients will value a medical organization that interprets their needs and responds with a formal, ongoing process. For clinic management, the reward is documentation of the behavioral focus on a quality goal.

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Defining quality standards in a straightforward manner makes the job of measuring performance easy. Quality standards may be applied to operational or clinical goals, or the focus might be case outcome. Monitoring waiting time is a process indicator, while rating pain level is a clinical or outcome indicator. A quality standard for pain management might be expressed, "perceived pain will be no higher than level 3 (on a scale of 1–10) upon discharge" (an outcome standard); or "reduce perceived pain level by three points within one week of initial visit" (a clinical indicator). To add an element of consistency, the ICD-9 code and a measure of the severity of the injury or illness should be factored into the analysis report to "handicap" pain levels.

When establishing quality standards initially, it is best to limit the number of goals set. Each goal must be infused into operations and monitored consistently to legitimately report quality improvement.

Document Performance

While recognition by a formal quality certification entity such as JCAHO requires documentation of compliance, it does not necessarily require electronic documentation. However, electronic documentation is essential to the overall goal of proving quality by measuring, or quantifying, performance. Available sources of suitable electronic data include:

• data extracted and/or interpolated from practice-management software applications;²
• data gathered using third-party quality monitoring tools;³
• a combination of data extracted from multiple sources.

Electronic documentation of quality indicators provides the opportunity to analyze data using such cutting-edge methodologies as dynamic performance benchmarking, balanced scorecarding, and Six Sigma principles. Understanding the power of these data-analysis techniques will encourage the pursuit of quality monitoring and the concomitant benefits of process improvement.

Analyze Performance Using Benchmarking

Dynamic Benchmarking

Budgets and revenue goals cannot inspire world-class performance. In fact, management by budget creates a minimalist view, seeking the least elegant option, usually with lackluster results. Leading companies understand that the real difference between success and failure, profitability and loss, is a strong methodology for measuring performance. A well-structured approach to precisely measure performance against quality standards provides the opportunity to identify problems and develop interventions that focus on squeezing out costly errors and waste. Stated another way, that which is measured and monitored can be improved!

Benchmarking is a proven business approach for identifying and measuring performance against the quality processes of operational excellence that attract and retain patients or clients and increase margins and revenue. It is a management tool that focuses on ongoing operational efficiency to avoid errors and redundancy and demonstrates quality by comparing performance against pre-described standards. Achieving a quantum improvement depends upon frequent, consistent data collection and analysis with a focus on how daily activities impact overall results.

Dynamic benchmarking is the ongoing process of collecting real time operational process intelligence that, when analyzed, measures variance from quality standards. It teases out problem areas and showcases top-notch performance. Discovering, studying, and modeling best performers are the best ways to achieve financial improvement and market advantage.

Balanced Scorecard

The balanced scorecard approach is an enhanced method of benchmarking data, widely used in the manufacturing and service industries. It broadens the scope of benchmarking analysis to avoid missing key performance indicators. Developed by Robert Kaplan and David Norton of the Harvard Business School,⁴ it shifts the focus from traditional one-dimensional financial analysis to a multifaceted approach that includes four major perspectives of the operational process. The overriding goal is quantum improvement in all areas of performance by monitoring, improving, and sustaining quality services and customer satisfaction in a broad range of functions.

1. Patient and client relationships: Patient and client relationships constitute quality from the viewpoint of the customer. Developing and maintaining patient and client satisfaction is key to improving performance, profitability, and the competitive advantage. Creating satisfaction with each encounter can be expressed as a quality standard, whether the contact is in person, by phone, or by e-mail. The earlier example of establishing an upper limit for waiting-room time is a customer relationship or satisfaction quality standard.

Patients and other constituents seek credible, efficient, and accurate performance, with clear communication from their medical providers. Too often providers misinterpret customer-relationship improvement initiatives and adopt an overly-friendly, almost patronizing manner for interacting with patients. A better approach is to focus on clearly-stated quality standards to more accurately link behavior to customer appreciation.

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2. Staff and employee satisfaction: The quality of leadership and the working environment positively and negatively impact staff performance, efficiency, and (indirectly) patient satisfaction. Staff turnover, insufficient staffing, confusing instructions, and begrudging attitudes all result in costly customer dissatisfaction, reduced patient confidence, performance errors, and reduced productivity—overall poor quality. Collecting key indicator data illuminates problem conditions and trends so that they can be addressed and corrected immediately. Third-party benchmarking of your data relative to other organizations can help identify best practice models.

3. Process performance: The degree to which process quality standards are consistently met impacts patients and clients and is also critical to maintaining clinical quality. Achieving procedural accuracy by avoiding errors and redundancies contributes to smooth operations, positive outcomes, efficiency, and profitability. Errors can be anticipated and avoided through structured monitoring of performance based on clearly-communicated quality standards.

In occupational health, an example of a quality process goal might be completing the correct combination of physical exam elements during one annual visit, thereby avoiding call-backs, billing confusion, and other undesirable results. In the balanced-scorecard approach, performance goals often overlap, impacting more than one of the four areas of concern. Accurately completing an annual exam is also a suitable patient/client satisfaction goal.

4. Financial performance: Financial performance data are the traditional bases of performance analysis, but they are also an important secondary data source for identifying operational performance and customer satisfaction. Billing procedure errors that result in rejected invoices and lengthy receivables generate indirect costs such as cash flow deficits and inconvenienced clients. Tracking reduced revenue or declining requests for a specific service can provide an early indication of a problem. Real-time data trends will alert management much sooner than intuition.

Summary

Footnotes

1 Wolfe, K., "Competitive Edge: Providing Quality Care—And Proving It," Occupational Health Tracker, Vol. 5. No. 4., Winter, 2002–2003.

2 Note: SYSTOC® and StolaSystem® software applications are excellent sources of electronic data.

3 Companies that provide quality-monitoring and benchmarking tools include: G.E. Medical Systems (www.gemedicalsystems.com); The Benchmarking Exchange (www.tbe@benchnet.com); and On-the-Job, Quality Monitoring and Benchmarking in Ambulatory Healthcare, (www.on-the-job.net).

4 Kaplan, R. and Norton, D., The Balanced Scorecard: Translating Strategy into Action, Harvard Business School Press, 1997.