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How to Fix the Health Care System

April 21st, 2009

Six Sigma + ISO 9000 Quality Management = Fix the Health Care System
It’s a given in today’s world of advancing technology that health care delivery represents an extremely complex collection of diagnostic, operational and administrative processes, all of which must be highly coordinated to ensure the delivery of quality patient care. Yet the health care industry’s implementation and practice of quality measures causes it to operate at a low three-sigma to four-sigma quality level, compared to the five-sigma to six-sigma quality of the aerospace, information technology, telecommunications, or medical device and in-vitro diagnostics industries. medical2With health care performing at this significantly lower level, is it any wonder that (according to Lucian Leape, an adjunct professor of health policy at the Harvard School of Public Health) an estimated 120,000 deaths occur every year due to medical mistakes? Compare this to National Safety Council figures of 41,200 deaths from motor vehicle accidents, 16,600 from falls, 4,100 from drowning and 3,700 from fires. The Institute of Medicine reported that medical mistakes in the United States cause as many as 98,000 hospital deaths per year. Dr. William C. Richardson, chair of the committee that wrote this report and president/CEO of the W. K. Kellogg Foundation, articulates it best when he asserts, “these stunningly high rates of medical errors–resulting in deaths, permanent disability and unnecessary suffering–are simply unacceptable in a medical system that promises to do no harm.”

 

Why is there a problem with quality in health care today? Is the health care industry really so very different from other industries that have successfully implemented ISO 9000 quality management systems in an effort to realize Six Sigma quality results?

It’s true that health care in the United States requires a heterogeneous mix of people to support the operation of its multifaceted industry. The Partnership for Patient Safety describes these many interactive groups as including “consumers, clinicians, hospital organizations, ambulatory care providers, employers that purchase health care from providers for their employees, suppliers of health care medicines and other products, purchasers of medical products, regulators and lawmakers, lawyers, and the media,” among others. It’s also true that health care quality assurance organizations have sought for decades to standardize clinical performance for activities that affect patient safety and the quality of health care. The respected Joint Commission on Accreditation of Healthcare Organizations (JCAHO) describes its approach to quality as endeavoring to improve patient care by “addressing the organization’s level of performance in key functional areas.” However, as in any other industry, quality in health care delivery requires the congruent system integration and synchronization of all essential operational, clinical, and administrative process inputs and outputs to optimize and ensure a synergistic realization of the organization’s common goals and purpose. To paraphrase the basic tenant of systems analysis theory, no part is of greater importance than the whole.

In the attempt to establish a process quality goal for health care, it’s important to understand the applicability of Six Sigma quality and ISO 9000 quality management. Let’s begin by defining sigma as it relates to a business or manufacturing process. Six Sigma Qualtec, a leading Six Sigma consulting firm, defines sigma as “a metric that indicates how well that process is performing. The higher the sigma value, the higher the performance quality of the organization’s process. Sigma measures the capability of the process to perform defect-free work, with a defect being anything that results in customer dissatisfaction.”6 The International Organization for Standardization (ISO) defines Six Sigma as a “statistical business-improvement approach that seeks to find and eliminate defects and their causes from an organization’s processes, focusing on outputs of critical importance to customers.” With a similar philosophical intent, ISO defines quality management as “all activities of the overall management function that determine the quality policy, objectives and responsibilities and implement them by means such as quality planning, quality control, quality assurance and quality improvement within the quality system.” ISO further defines the quality system as “the organization structure, procedures, processes and resources needed to implement quality management.” Therefore, ISO 9000 provides a methodology and framework to evaluate whether an organization has efficiently and effectively defined, organized, integrated and synchronized its operational resources to optimize performance and ensure customer satisfaction. Moreover, ISO 9000 synergistically augments and enhances the long-standing benefits of health care accreditation and government regulation and produces continuous quality improvement to effectively respond to technology’s fast-moving continuum of change.

Dr. Paul M. Schyve, senior vice president of JCAHO, has acknowledged that the solution to medical mistakes is “to change the systems and processes within which people work in order to make it harder for errors to occur.” He further concludes that accreditation and ISO 9000 can fit well together and complement each other.

Large numbers of both U.S. health care providers and their patients are less than satisfied with the industry’s mechanisms for attempting to balance health care quality, accessibility and costs today. For far too many U.S. residents, the health care industry’s attempts at cost containment have become synonymous with ineffectual hurry-up-and-wait patient care. Neither the health care industry’s internal customers (represented by the health care professionals themselves) nor its external customers (represented by the patients) seem satisfied with the quality status of health care today. This management trend is the result of conflict between the clinicians’ need for professional autonomy and the health care industry management’s corresponding mandate to impose reasonable administrative controls on clinical practice. Clinical autonomy should clearly translate into efficacious patient care, and good administrative practice should systematically translate into efficient and effective use of resources to promote profitability, budgetary enhancements or both. When these conditions appropriately manifest themselves, a state of synergy exists between managers and clinical care providers, and the needs and expectations of those most fundamentally important people affected by the quality, accessibility and cost equation–that is, the patients–are better served. However, when management practice is driven by cost measures that aren’t derived from a systems-process approach that effectively inculcates all activities of the overall management function (i.e., to determine a quality policy, objectives and responsibilities and implement them accordingly), there is no quality system. Health care quality and accessibility suffer, the health care industry continues to muddle through at a three-sigma to four-sigma quality level, and patient safety is described by medical mistakes that represent the highest cause of accidental death in America. Such a conclusion is, by definition, the antithesis of quality management.

To be fair, in considering health care quality, accessibility and cost, not all emerging interactive problems can be solved by the health care industry. Technology is expensive and will continue to remain so, and the U.S. health care consumer will continue to expect the best that technology can provide. However, increased costs associated with increased capital investments in technology don’t necessarily result in increased quality or customer satisfaction. Increasing costs can correspondingly reduce the health care consumer’s access to expensive new technologies. In other words, can or will a patient be able to pay for more expensive diagnostic and treatment services? And will the health care organization, in an effort to offer affordable health care, be reasonably willing to routinely utilize more costly services prescribed by its clinical providers in the face of increased operating costs? Or does the health care organization’s management administratively obfuscate clinical diagnosis and treatment processes in order to rein in the organization’s clinicians and inhibit them from referring their patients for more costly diagnostic procedures or treatment regimens? These are but a few issues that are plaguing the health care industry today.six_sigma_phases-dmaic7

Clearly, across health care’s delivery landscape, health services managers have their work cut out for them. They must start doing what the leadership in the other high-tech industries have been doing for more than 10 years–be willing to start looking for more creative, nontraditional solutions. Health care’s leadership should innovatively consider that the worldwide standard for five-sigma to six-sigma quality is, historically, ISO 9000.

ISO 9000 is a proven methodology that will effectively help health care organizations to better manage continuous quality improvement while facilitating synergy between accreditation and regulatory processes. There is no better proven way for the health care industry to address the problem of patient safety while simultaneously pursuing a five-sigma to six-sigma quality end-state. The mediocrity of three-sigma to four-sigma quality is indefensible in today’s Six Sigma quality environment, especially when juxtaposed with the issue that deaths due to medical mistakes is an abomination that has finally escaped Pandora’s box and is out on the street. Having ushered in the 21st century, it’s time for the health care industry to acknowledge that the efficacy of a system-process approach toward quality is tantamount to a system-process approach toward patient safety. The industry can no longer make excuses, and the alternative–continuing to beg the question–borders on insanity. As Leape puts it, when comparing patient safety and the health care industry to commercial aviation and the aerospace industry, health care’s three-sigma to four-sigma quality is “roughly equivalent to a jumbo jet crashing every day.”

ISO 9000 quality management, along with the demonstrated performance of health care accreditation and government regulation, will be instrumental in helping to restore the public’s confidence in the health care industry. ISO 9000 quality management can do for the health care industry what it has systematically succeeded in doing for the automotive, aerospace, information technology, telecommunications, machinery, electrical products, pressure equipment and transportation industries: facilitating performance excellence and the achievement of a five-sigma to six-sigma quality end-state.

More Information:
info@optimizenow.com

Source:

http://www.qualitydigest.com/nov00/html/patient.html

cisco Finance, Medicine, Six Sigma

Made in USA

March 26th, 2009

madeinusaJoe Smith started the day early, having set his
alarm clock
(MADE IN JAPAN ) for 6 a.m.
While his coffeepot
(MADE IN CHINA )
was perking, he shaved with his
electric razor
(MADE IN HONG KONG ).
He put on a
dress shirt
(MADE IN SRI LANKA ),
designer jeans
(MADE IN SINGAPORE )
and
tennis shoes
(MADE IN KOREA )
After cooking his breakfast in his new
electric skillet
(MADE IN INDIA )
he sat down with his
calculator
(MADE IN MEXICO )
to see how much he could spend today.. After setting his
watch
(MADE IN TAIWAN )
to the radio
(MADE IN INDIA )
he got in his car
(MADE IN GERMANY )
filled it with GAS
(from Saudi Arabia )
and continued his search
for a good paying AMERICAN JOB.
At the end
of yet another discouraging
and fruitless day
checking his
Computer
(Made In Malaysia ),
Joe decided to relax for a while.
He put on his sandals
(MADE IN BRAZIL )
poured himself a glass of
wine
(MADE IN FRANCE )
and turned on his
TV
(MADE IN INDONESIA ),
and then wondered
why he can’t find
a good paying job
in USA…..

cisco Finance, Stock Market

How to Fix the Social Security System

March 6th, 2009

250px-rooseveltssasigningIn almost every financial situation that we deal with on a regular basis, there is the idea of an “account”. For example, when you put money into a bank, it is understood to be “your money” and it goes into an account with your name on it. The same thing happens when you contribute to your 401(k) plan at work — you have an account with your money in it, and if you change employers the money in the account is yours. You also have accounts for your credit card, mortgage, car loan, and so on. In any of these accounts, you add money to the account and take money out of it, and whomever holds the account keeps track of how much you have or you owe.
The Social Security system is nothing like that. In the Social Security system, the money you pay into the system gets immediately paid back out to the people who are currently getting Social Security checks. This arrangement came into being because of the way the system started. In 1935, when Roosevelt signed the Social Security Act into law, there were a lot of people who needed benefits (because of the Great Depression), but there was no money to pay those benefits with. The idea at the time was that people currently working would pay into the system, and their money would immediately go back out in the form of benefit checks. Each generation of retiring workers would get paid by the people currently working, and therefore the system would fund itself forever despite the fact that the system had no money to start with.

This clever idea worked great in 1935 (and for many years after that), but it is going to have a problem in the future for two reasons:

In 1935, there were many more people paying into the system than those receiving benefits. The ratio of workers to retirees meant that workers did not have to pay much into the system in 1935 to support the retirees, up through 1950, only 2% of income (1% employee, 1% employer) was withheld for Social Security, compared to 15.30% (7.65% employee, 7.65% employer) today). In the future, the retirement of millions of baby boomers will hurt the ratio — there will be so many retired people that the working people will not be able to support them. If the population had grown steadily this would not have been a problem, but there is no good way for the design of the Social Security System to handle a population spike like the baby boomers.
Many people have become so used to the idea of a 401(k) plan (where your money belongs to you and grows to a large sum over time through investment compounding), that the idea behind the Social Security system becomes hard to swallow. Currently a worker pays 7.65% of his or her gross income into the Social Security system (with a cap at a gross income of around $70,000), and the employer pays another 7.65% for the worker as well. If you could take that 15.30% of gross income and invest it in a 401(k) plan for the same period of time, it would generate an immense sum of money based on historical returns — far more than a person with average income (or greater) would get from Social Security. A retiree’s Social Security benefit is calculated using a complex formula rather than an account balance, because there is no “account” in the traditional sense.

In finance, the rule of 72, the rule is methods for estimating an investment’s doubling time. The number in the title is divided by the interest percentage per period to obtain the approximate number of  years required for doubling. Although scientific calculators and spreadsheet programs have functions to find the accurate doubling time, the rules are useful for mental calculations and when only a basic calculator is available.
For instance, if you were to invest $1000 with compounding interest at a rate of 9% per annum, the rule of 72 gives 72/9 = 8 years required for the investment to be worth $2000; an exact calculation gives 8.0432 years
Assume that when you are born your parents or the government invest  for you only $1,000 in a savings account that yields 8 or 10% per year.  The table below will show you what this modest investment  can do for you in later years.

The first column is for reference, the second is the number of years to take to double your money at a yield of return of 10% or 72/10 = 7.2 or approximately = every 7 yrs.  The third column is the number of years to take to double your money at a yield of return of 8% or 72/8  = 9 yrs.  The fourth column shows the total compounded investment.  Notice that a yield of return of 10% will yield 512K at age 63 and for a yield of return of 8% will yield 128 K at age 63.  Notice that such a small difference in yield (10% vs 8%) makes such a huge difference in compounded return. 

1  7  9  2K
2  14  18  4K
3  21  27  8K
4  28  36  16K
5  35  45  32K
6  42  54  64K
7  49  63  128K
8  56  72  256K
9  63  81  512K
10  70  90  1,024K

Thus, an investment of $1000 when you are born with a yield of return of 10% per year, will give you 512K at age 63,  or one time investment  of 15% of your salary at age 28,  say you make 60K or $16.8K  will give you 537.6K at age 63.

cisco Finance, Stock Market

Price, Time and Market Geometry

February 11th, 2009

Powerful relationship between time and price that is misunderstood and overlooked by 99% of traders, but that has allowed the select few who truly understand it to consistently and repeatedly pinpoint market reversals weeks and months ahead of time.

cisco Finance, Stock Market