QI Revolutions Lower Barriers to Improvement

Over the past year, 2directions has met with leading physicians to learn from their successful QI projects. We were most impressed by projects which achieved demonstrable benefits to their patients and to their medical care organization. One such project was Dr. Bela Patel’s success at Memorial Hermann Hospital, in which she essentially eliminated ventilator associated pneumonias (VAP) from her ICU for five years and counting. Review of her achievements highlights patients who experience fewer adverse outcomes and arrive home sooner.

To accountants, those patient-centered results equate to cost savings and increased turnover. Previously, 2directions presented an analysis of how bed turnover is one of the primary drivers of hospital efficiency. Better turnover increases capacity and widens bottlenecks that otherwise limit patient flow. It’s much easier to justify those benefits through a low cost, low risk quality improvement project, than through heavy capital expenditure and disruptive construction of new beds. We estimate her work releases $1.7 million from the annual operating budget and avoids $3 million of capital expenditures.

Her work provides meaningful patient stories and a compelling business case. But even as Bela Patel’s Medical Intensive Care Unit has gone without a VAP for five years, in most hospitals, VAPs remain a monthly occurrence. This observation led 2directions to ask what barriers prevent rapid adoption of such tremendous accomplishment to other healthcare institutions.

Several of us at 2directions have experience outside healthcare. Software, industrial manufacturing, and retail provide reference of successful scale: the explosive growth of social networks, the economics of precision in mass production, and fashion trends. The answer to why scale is not possible in quality improvement is the same reason my former employer, IBM Consulting, has been tremendously successful, even in economic downturn -- QI is a highly customized service. Solutions aren’t simply adopted, they must be adapted. Even if the solution has proven successful elsewhere, adaptation is required, and it is an expensive process that calls upon local heroes to successfully shift the organization to the new clinical approach.

It became our conviction that QI scale is hindered by two cultures. The clinical culture is hesitant to change processes. Physicians are apt to believe in a system in which hard work, by competent people, delivers the best patient outcomes. We need a change agent that will risk reputation and expend great efforts to demonstrate that even better patient outcomes are possible through QI. The financial culture of the hospital is hesitant to invest in projects which disrupt the current model. Reluctance can be overcome by a salesperson who understands the hospital’s financial drivers, and uses those drivers to connect their offering to better business outcomes. We need a similarly equipped salesperson for QI.

Understanding these barriers to scale, and the capabilities needed to surmount them, we considered the equipment which would enable physicians to overcome them. We aim to refine our blueprint and begin to fabricate these tools over the next 8 months. However, ours is not a “if we build it, they will come” type solution. Only participation by QI Physician Leaders will substantiate our vision. Therefore our first step was to garner support for our concept from the American Medical Association. We drafted a resolution which describes the problem we identified and our approach to a solution, and presented it to the AMA medical student section (MSS) to ask for promotional support. The MSS formally adopted our resolution at their national meeting in New Orleans one week ago. It’s a milestone we are excited to share. The next step will be for physicians to debate this resolution on the floor of the House of Delegates, at the AMA meeting in Chicago this summer. Passage would be a strong catalyst to improve collaboration between QI leaders.

Simplifying the Square

A goal of 2directions is to help physicians win the corner office at the hospital and to begin making business decisions in the best interest of the Patient-Physician relationship.

To weigh interests, business schools teach a simple method: ask two dichotomous questions and plot the answers on a 2 X 2 square. Along one side, are the responses to the effect of the action on customers as either Good or Bad. On the other, the same consideration is made, this time regarding the effect of an action on the business itself. Answering these two questions allows quick analysis of whether a project should be pursued, weighed, or rejected. The resulting grid is reminiscent of the Punnet Square. Homozygous recessive is akin to the elusive win-win, while the Heterozygotes fall in the more common grey areas.

While you wouldn’t always think so, MBAs prefer projects which are good for both the customer and the business. However, the MBA doesn't shy away from actions which are unfavorable to one of the two parties so long as the actions are strategic and maximize the long term value of the firm. Mixed responses to the two questions introduced above lead the MBA to consider options, with an eye for the long run, the MBA attempts to maximize profits without losing its best customers.

"Promotions" are actions which benefit the customer more than any harm done to the business. When judged correctly, promotions have a high transaction value even though they may be unfavorable to the business. Groupon capitalizes on this strategy by helping business to generate awareness and goodwill. The business shares with customers the majority of the value it creates. Actions which benefit the customer but aren't necessarily good for the business accumulate Goodwill. Later, the business will have an opportunity to take actions which favor the business at the expense of the customer.

A recent example of cashing in on Goodwill is Netflix upsetting customers by raising its rates and enacting separate billing for postal delivery of DVDs and streaming video. Undoubtedly analysts demonstrated the move is good for Netflix, despite the fact that customers will be lost. Clearly, those customers who stick it out receive less value now that the same product carries a higher price. In the future, greater customer value may return if many more movies are available to stream. Should that happen, customers who are satisfied by streaming alone might discontinue postal DVD delivery, a choice they would otherwise not give much thought to without separate billing. Since the cost to Netflix is greater to ship a DVD than to stream a movie, Netflix will benefit when consumers change their behavior. By billing separately, Netflix encourages customers to drop DVD delivery so that in the future Netflix might discontinue its postal service with less guilt. Despite the fact that customers don’t benefit by this path, the decision supports Netflix’s long term goal to yet again revolutionize the way we watch movies at home.

Should physicians give in to perverse incentives, they breach their fiduciary duty to patients. Whether motivated by greed or the practice of defensive medicine, these actions increase the cost of care without adding value. On the other hand, an action which is not in the best interest of the physician and benefits the patient should be taken. Indeed, a criteria of a profession is to only take actions which benefit the customer. Currently, many hospitals are run by CEOs who approach decisions as an MBA would. To maintain service, and ensure it stands for future generations, physicians must be mindful of when actions harm the business. On average, most decisions the Physician CEO makes would need to benefit the business. However the MBA's approach could be simplified by omitting any option that is not good for patients: