Key strategies for sustained performance improvement

Healthcare Financial Management, Nov, 2004

No healthcare organization today can be complacent about clinical, operational, or financial performance. The stakes are just too high. The Institute of Medicine's seminal 1999 report galvanized the healthcare industry and nation around the need to improve patient care to reduce the number of lives lost as a result of preventable system and process failures. In addition, slim margins, which threaten an organization's continued financial competitiveness and operational viability, can and must be improved.

The biggest gains in improving overall business performance, which encompasses clinical, operational, and financial performance, can be achieved through a multidimensional approach that integrates the three domains. The building blocks that make it possible are data. Key activities or competencies that provide the mortar are the thorough collection and analysis of data, and the use of the resulting information to drive performance improvement. And these activities can be most successfully implemented in an environment of accountability.

Let's look at three strategies that organizations should use to improve their overall performance, and summarize the corresponding results they can achieve.

Strategy 1: Create a Culture of Continuous Improvement and Accountability

Leadership commitment to continuous performance improvement and accountability for making such improvement "happen" create the "right" culture. This culture nurtures patient- focused care, organized and multidisciplinary teamwork, formal and informal learning, and effective communication at and among all levels.

The ability to improve performance starts with the will to improve performance, but the way to improve performance must be facilitated by leaders through the allocation of adequate resources. Resources include staff, time, training, and information systems and tools for performance measurement and assessment. Leaders also must:

* Set and adjust priorities for performance improvement based on evidence and supporting data

* Establish multidisciplinary teams for improvement initiatives

* Ensure participation of individuals with vested interest in the specific process improvement and achieve a high level of physician involvement in clinically related quality improvement projects

* Measure and assess the effectiveness of performance improvement initiatives

* Ensure organizationwide accountability for performance improvement

In past decades, leaders managed departments or functions horizontally using data and tools available to the department. The idea was that if department directors could optimize each function separately, then the organization's operations would be optimized as a whole. But what about the management of patient care or other processes that cross functional areas, such as medication management, infection control, staff retention, resource management, and budgeting?

Today, excellent tools and techniques are available to manage processes both horizontally and vertically. Leaders can look at performance improvement in a holistic, organizationwide manner, enabling all staff to be involved with and accountable for performance improvement.

Strategy 2: Identify Key Performance Improvement Opportunities and Performance Measures

The choice of what to improve is critical. So is the choice of what to measure to track the success of improvement initiatives. Intuition can point to areas where improvements might be made, but data mining and analysis will allow organizations to quickly identify the areas where the most significant improvement opportunities lie. To identify cost-effective opportunities, organizations can look at the following:

* Data related to high-risk, high-volume, and problem-prone areas, processes, and procedures

* Financial/operational data

* Staff suggestions about faulty processes

* Data related to patient perceptions of care and services

* Feedback from physicians, payers, managed care organizations, and other stakeholders

Every healthcare organization has more opportunities for improvement than it can possibly pursue. Prioritization becomes the challenge, says Tina Foster, practice leader, surgical services consulting, McKesson. Leaders must assess the relative merits of each opportunity to select those with the greatest prospect to improve the quality and safety of patient care and organization operations.

Many hospitals focus on improving operating room (OR) efficiency and effectiveness because ORs typically contribute upwards of 40 percent of a hospital's patient revenue. (1) Costs and variability in OR operations are high, and gains in improved clinical outcomes and financial performance can be significant. (2)

What should we measure to track improvement? Indicators related to the key dimensions of performance--demand, cost/resources, human resources, outputs/productivity, quality, and satisfaction--abound. "[Measures] must be realistic and convincing to the people using them. They must be valid enough to identify real objectives, reliable enough to measure actual change in performance, and comparable over time," note healthcare management experts John Griffith and Kenneth White . (3)