Planning for the Cost of Quality

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Planning for the Cost of Quality

• CLSI Global Health
• Quality Management Systems and Strategic Planning
• Presented by Rick Panning, MBA, CLS(NCA)
• April 2, 2009

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Building in the Cost of Quality a journey

• My career journey last three employers
• Fairview Health Services
• Making the case to add quality resources
• Understanding the relationship between process
  improvement, quality and patient safety
• American Red Cross-Blood Services
• The building blocks for quality management
  existed, but
• needed to embed quality into day-to-day
  operations (primarily collections and
  manufacturing)
• Allina Hospitals and Clinics
• Quality and operations integrated
• Quality essentials at the core
• Moving to the next level

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The cost of a lack of quality

• Understanding the incremental costs in the system
  if quality is not at the core of operations
• Impact on patients time delays, repeat testing,
  incorrect results/incorrect diagnosis
• Impact on resources rework related to errors,
  lost productivity opportunity, wasted supplies,
  measuring for measurings sake
• Lost revenue opportunity lost or potential
  business, impact on revenue (P4P)
• Accreditation risks CAP, AABB, Joint Commission
  deficiencies

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A process improvement journey

• Fairview Introduction of 6 Sigma / DMAIC in
  2002-2003
• Improve consistency of performance by reducing
  defects
• Turnaround time
• Reaching a 6 Sigma level of performance results
  in reduced cost. Defectscost
• Beginning the LEAN journey in 2003.
• Reducing waste in all processes / reduce the
  noise
• Decrease TAT and improved consistency
• One-piece flow reduced opportunities for error
• Reduced resource needs (lower cost) and improve
  quality performance
• Embedding process improvement in the culture
• seeing with new eyes

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Red Cross changing the culture to understand
that quality is the job

• Quality assurance and quality management
  comprised many policies and procedures, as well
  as many resources in the organization, but
• The organizations quality performance had
  resulted in significant FDA issues and media
  attention.
• Why? Organization did not mandate standard
  practice AND quality was viewed as something
  extra we have to do by operations.
• Whole blood and apheresis collections
• Blood product manufacturing

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Red Cross-North Central Blood Services

• Quality performance Quality report card
• FY2006 28th out of 36 regions in performance
• FY2008 9th out of 36 regions in performance
• Consequences of poor quality performance
• Decreased collections (decreased revenue, not
  meeting patient needs, cost per unit collected
  was high)
• Higher percentage of collected units needed to be
  quarantined or discarded

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Red Cross What changed?

• Had to change the culture which regarded quality
  requirements as something extra and as
  something required by the quality department (as
  opposed to being core to operations and part of
  the job)
• Changes includes
• Message from the top of the organization
  President, Division VP, Region CEOs, regional
  management
• Re-education about quality requirements
• Sharing data on performance quality
  deficiencies by team and individual
• Setting performance expectations
• Adding non-operational supervisor to all drives
  to monitor performance and provide 11 support
• Lean processes introduced in collections and
  manufacturing

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Red Cross What were the outcomes?

• Quality profile improved steadily (2006-08)
• Quarantined/discarded units decreased
• Collections goal performance improved 3 straight
  years
• Units collected per FTE improved
• Revenue improved
• Cost per unit collected decreased

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Allina

• Dedicated quality staff as part of corporate
  administrative team
• 2 administrative FTEs (director, staff) with one
  administrative assistant
• Director part of corporate quality management
  team
• Plan to expand by 2.0 FTEs during 2009 and 2010
  as new organizational is developed to include
  metro and regional hospitals, outreach program
  and 70 clinics
• Goal of pursuing ISO 15189
• Responsible for
• Coordination of system accreditation activities
• Establish and maintain quality management
  infrastructure (based on CLSI Quality System
  Essentials)
• Assure that Quality essentials are integrated
  into the budget and strategic planning process
• With input of operations, develop quality goals
  and indicators/measurements

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Prior to 2009

• Current State
• Each metro lab leader is accountable for
  reporting at least one quality indicator.
• Each metro lab leader presents an annual report
  at the Quality Committee.
• The status of each indicator is to be reported
  quarterly.
• There are varying degrees of compliance with
  providing the quarterly reports.
• Regional labs participate in some indicators, but
  not all labs are represented.
• Indicators did not consistently integrate with
  overall operational performance.

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2009 and going forward

• Identify system-wide aspects of the laboratory
  performance that need focused attention - patient
  safety, patient service, regulatory requirements,
  or inconsistent or inadequate past performance.
• Projects formally endorsed by the Quality
  Committee and Operational Leadership team.
• Form teams for each project to focus on making
  improvements service, financial, quality, pt
  safety.
• Each lab leader expected to participate in at
  least one improvement project.
• System-wide projects - representation from metro
  labs, regional labs, and clinic labs (when
  applicable).
• Each team identifies goals and associated
  measures. Each performance measure should be
  linked to an associated financial measure
• Each team compiles a quarterly status report,
  identifying progress toward goals and barriers
  impeding progress.

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Quality Indicators

• Balance scorecard
• All must be linked to one of Allinas strategic
  focus areas.
• Care
• Service
• Growth
• Financial Health
• People

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Rick PanningVice President, Laboratory
ServicesAllina Hospitals and ClinicsMinneapolis,
MN612-262-5012rick.panning_at_allina.com
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Questions