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By Ken Blick
10/09/07
The Culture of Quality: Acute Care and Outreach Markets
The Culture of Quality: Acute Care and Outreach Markets
This article will identify the key components of culture related to the quality
environment and will explore the historical acute-care perspective of quality
culture versus the required outreach quality culture. Successful labs can address
the requirements of both markets and create solutions that benefit all customers
in both acute-care and outreach.
A New Paradigm for Quality
“When we talk about quality, there is a new paradigm that should really
make labs think of this in terms of how we create value for our customers,
our owners, and our staff,” says Earl Buck, MT (ASCP), former Executive
Director, Clinical Laboratories for Duke University Health System, and currently
Vice President, Operations Management, Chi Solutions, Inc. (Durham, NC).
“I view the value proposition for laboratory services as a very simple
formula, which is based on the business principle of a balance scorecard,” Buck
explains. The formula is as follows:
• Quality: “Historically, we have focused on clinical
quality and labs have been great at that—we’re quantitative thinkers,” he
says. “We had statistical process control back in the day when other
people in healthcare didn’t really understand what we were doing. In
addition to clinical quality, we need to become more focused on the element
of business process excellence.”
• Customer Service: The
second quadrant in this value proposition is customer service. It applies not
only to turnaround time and other service metrics, but also to measuring whether
customers are satisfied.
• Financial Performance: “Financial
benefit is in the denominator right now because we started as cost centers.
Cost always goes to into the denominator of a formula when trying to determine
value.” Today,
however, Buck would put financial performance as a numerator, the same as quality
and customer service. Why? Because labs should not only be responsible for
monitoring revenue, but also the bottom line, e.g., margin management. “When
we get to the point where have effective margin management for inpatient activity,
outpatient activity, and outreach, we’ll a be able to document how labs
contribute to capital generation. We will be able to convince hospital administrators
to fund equipment by documenting ‘this is our margin and this is how
we contribute.’ Business success demands knowledge of operating margin.”
• Work
Culture: Buck notes that 10 years ago the people
component was not a conscious part of the formula. “We have learned from
the balance-sheet approach to business that people are the most important asset
in our laboratories. You can have good quality, service, and financial performance—but
that’s leveraged up or down by the way our people and our leaders behave.
Work culture is the fourth quadrant of a balance scorecard, as well as an important
part of this formula.”
One element of work culture is learning and growth. “People often think
that growth refers to the organization in terms of volume of testing. On the
contrary, it’s about the learning and growth of people—and what
we’re doing to reinvest in the most important asset we have,” he
says.
“Many people in health systems prefer the purer form of the balance
scorecard and would use ‘internal focus’ instead of quality in
the formula,” he
explains. “However, I think quality fits better for the lab industry.” Likewise,
he prefers financial benefit rather than the original ‘value focus.’ Customer
focus, on the other hand, has been a constant.
These components are the basis
for a balanced scorecard focused on value creation. “The
concept of lab quality is really about how we create value for our customers,
our organization, our people, and ourselves.” In short, Buck suggests
thinking of quality in terms of this value proposition and the four elements
of the balanced scorecard.
Attributes of a Quality Culture
Culture is defined as the “shared beliefs, values, attitudes, institutions,
and behavior patterns that characterize the members of a community or organization.” What
is desirable in terms of cultural outcome could be described as when what is
good for the company and what is good for customers come together to become
the driving force behind the organization and its actions.John Woods, author
of “The Six Values of a Quality Culture,” offers
this list to differentiate between desirable and undesirable characteristics.
“In
the healthcare industry it’s obvious that some of these might
not apply,” Buck notes. “For example, we can’t say to a patient,
sorry about the ABO incompatibility, but this was a real learning experience
for the lab.”
According to Buck, a quality culture demands the following:
• Companies
and individuals that deliver on their promises—both stated and implied.
• Companies
and individuals that operate with honesty and integrity. “Some in the
lab industry who are experts in balance scorecard note that there is a fifth
element coming in the future. That is, you can put brackets around the previously
described value formula and multiply that quantity by ‘integrity’—this
will be a very important fifth element in the future.”
• All
people are treated with respect.
• Services
are delivered within the time promised or the customer is notified. “Admittedly,
labs don’t always do well with this one,” Buck says.
• Company
is reachable and responds appropriately.
• Customers,
vendors, business associates, suppliers, and clients perceive the company as
having a quality culture.
• Employees
and colleagues also perceive and believe that a quality culture is valued by
the organization.
Creating Cultural Change
To create cultural change, labs need to adopt these attributes. In addition,
labs also need to do the following:
• Role-model
desired behaviors and recognize daily behavior that supports quality culture.
• Re-tell
stories of leader and employee behavior that extol virtues important to quality.
• Select
people who hold quality culture in high esteem.
• Eliminate
most rules regarding time clocks, assigned parking spots, etc.
• Create
teams to study rules and policies. “If teams are managed well, this is
an excellent way to get feedback from employees in terms of what needs to be
changed,” Buck says.
• Communicate,
openly and honestly.
A Historical Perspective on Value Focus
In Buck’s opinion, the following chart depicts changes in the focus of
the value proposition relative to the sources of hospital testing over a 40-year
span:
“There was a time when hospital laboratories performed primarily
in-patient (IP) and, perhaps, a little outpatient testing (OT). Labs then moved
into the arena where outpatients started to become a focus—albeit it
was more of a focus of health systems,” he explains. “Many labs
were forced to bring in outpatient specimens, which were typically given low
priority and weren’t dealt with effectively. As outpatient and non-patient
(NP) testing grew, commercial labs found an opportunity and successfully captured
the NP market.”
In the first phase, acute care was the focus and the clinical
laboratory was considered a leader of quality management metrics. “We
had our plus or minus 2 standard deviations, control charts, and the focus
was on inpatient testing. Our lack of focus on outpatients and non-patients
created an opportunity for independent and commercial labs to take control
of that market,” Buck
says.
“Today, we know that performing at plus or minus 2 standard deviations
allows for 308,000 defects per million opportunities (DPMO) and that plus or
minus 3 standard deviations allows for 66,000 defects per million opportunities,
in Six Sigma terminology,” he explains. “In fact, laboratory performance
today tends to be at the same level as most other businesses that have not
pursued Six Sigma. In other words, we are running at about a 3.4 Sigma level
as an industry—and that means that we’re allowing 28,000 defects
per million opportunities over the longer term in our various systems.” The
historical perspective on OP testing is that it was a necessary service, but
not a primary objective. “Because hospital administrators and physicians
wanted to use the labs, the labs needed to find a way to provide the service.
At the time, labs started to commingle IP and OP priorities and, as result,
provided a lesser service to OP testing.”
However, labs that did both
IP and OP well saw the long-term benefit of increased test volume and began
to look for other sources of testing—i.e., outreach.
Today, volume growth in the hospital lab market is an essential part of continuity
of care within health systems—and it has caused an increased focus on
laboratory-related business process improvement and customer service.
The shift
in focus is a good thing, Buck emphasizes. “Hospital labs are
now compared to labs providing customer service in the non-patient market.
We are put in a competitive mode if we are told that the national lab or local
independent lab can do it better or cheaper. Our focus is now on the complete
value proposition, not just quality and customer service, but on all the elements
in the formula. Our process-improvement initiatives have become more data-driven
and, as laboratorians, we can easily adopt data-driven methodologies, such
as Six Sigma.”
The market share for hospital labs is also increasing because
it makes sense from a community-focused delivery of care perspective to maintain
consistent test results. “We’re seeing growth of outreach testing
and 80 percent of laboratories surveyed say that they have an outreach program.
The strategies of the health systems are pushing us to move in this particular
direction,” he
adds.
Quality Metrics for the Lab
As an industry, we now look at value (i.e., quality) and performance from a
process focus—from pre-analytic, analytic, and post-analytic perspectives,” Buck
says. He also notes that there are a number of quality metrics that are not
directly related to testing that hospital labs need to monitor. One key performance
indicator (KPI) is determining where defect opportunities occur across the
entire the lab process. The following tables outline the KPIs for the pre-analytic,
analytic, and post-analytic stages and their historical application in the
IP, OP, and outreach sectors.
“The Institute for Quality in Laboratory
Medicine (IQLM) has determined on a preliminary basis that less than 35 percent
of the industry focuses on the following KPI of the pre-analytic stage, ‘whether
physicians know what to order.’ From a post-analytic perspective, fewer
than 10 percent are dealing with physicians in terms of trying to help them
understand what results mean. There are opportunities for us to make improvements
and I think the IQLM will push labs into focusing on these areas,” Buck
says.
Following are some of the pre-analytic areas that Buck
pinpoints:
• Missing
information critical to testing and diagnosis. “This has been a recent
focus in the inpatient arena, and is primarily driven by anatomic pathology.
The same is true in the outreach arena—until we get to the point that
we’re talking about information that’s related to billing,” he
says. “We need to do a much better job in the outreach arena in capturing
that information.”
• Unacceptable
specimens. “Historically, in the inpatient arena we didn’t really
deal with this because we would go and re-collect most of those specimens.
In the outpatient arena, historically, we would reject all those specimens
and not go out of our way to work with physicians and educate them. In the
non-patient market, we certainly have to be focused on unacceptable specimens
and how to remedy this problem.”
• Customer
satisfaction for phlebotomy. “This is relatively new in acute-care settings,
while it has always been a part of non-patient settings in terms of what do
our customers think.”
• Missing
information, lost specimens, order cancellation rates, and missed pickups.
All of these are primarily about the quality and customer-service quadrants
of the balance scorecard.
Regarding analytic KPIs, “while some in the industry
say that the occurrence rate among analytic KPIs are low, these are critical
and labs need to be focusing efforts on them,” Buck says.
• Turnaround
time. “Historically, we have always looked at the receipt to verify information—or
hold to the belief that ‘we can only deal with what we can control,’ which
is the TAT (turnaround time) from the time they are inside the lab’s
walls. However, the difference is that labs are now part of a healthcare team
and everything has to be monitored—from the time the test is ordered
until the result is verified. The new metric should be ‘from the time
we collect the specimen until the time we verify the results.’”
• Pap/biopsy
correlation. “This is a way we can differentiate ourselves in the hospital
market, because theoretically we have access to this information and the commercial
laboratories who are seeing patients on a single occurrence basis don’t
have the historical information.”
• Proficiency
testing. “We need to monitor proficiency testing and report it as a metric
that is looked at every month,” Buck recommends.
• Report
content. “Do we really take an in-depth look at the content of our reports—is
it meaningful and can the physicians and providers who have to interpret it
derive good information?” Buck asks rhetorically.
In terms of post-analytic KPIs,
reporting errors, customer satisfaction, and customer service are all things
that are being looked at, but not necessarily in an automated mode.
“There
is a tool on the market that has automated event reporting, which some might
refer to as incident or event reporting,” he says. “It
can originate in the laboratory, you input your data, and at the end of a defined
period you will get reports that detail prevalent pre-analytic and post-analytic
problems so you can develop appropriate action plans.”
In terms of critical
value detection, the Joint Commission requires that this be documented—the
lab has to call physicians, ask them to read back the results, and document
it. “When you automate a laboratory with a front-end
system, analyzers, and middleware that’s all linked to the laboratory
information system, the number of critical value alerts increases significantly.
It’s not because the lab was doing a poor job before,” he notes. “Essentially,
it was being done manually and expert systems can now help to identify all
the appropriate critical value information and relay it to the physicians.”
KPI
for Work Culture
There are also KPIs for the work culture quadrant. “It can be debated
whether the elements of the work culture quadrant in a balance scorecard really
impact the quality of service and the overall value of what labs are doing,” Buck
says. “The answer is yes, they do. Having unhappy people or a shortage
of positions absolutely has an impact on the overall value proposition.”
Employee satisfaction, investing in continuing education, and staff productivity
are also critical in the IP, OP, and outreach markets to ensure competitiveness.
Finally, employee accident rates should be monitored and mandatory safety training
is already in place to meet compliance and other requirements.
KPI for Financial
Performance
While most labs are monitoring total cost per test, Buck notes that the one
new metric that should be monitored going forward is the actual margin per
test. “We really need to know what our margin is on inpatient, outpatient,
and non-patient testing.”
Quality in the Industry
Quality is very much affected by complexity—and the bigger the organization
the more complex the process becomes for creating value and improving processes.
“Most
errors occur in organizations where there are interfaces between systems or
between people. We have all experienced or heard of stories where the interface
leads to a defect. “We need to do a better job in terms
of being a member of the healthcare community. We are not just responsible
for lab testing inside our laboratory; we’re also responsible for making
sure the order priorities we put out there make sense for our providers and
that we create front and back-end systems that help us create that value proposition.
“In
terms of best practice we’re not very far as an industry, Buck
says. “We don’t have industry standards for quality metrics or
a centralized database of best practices. However, labs do have many resources
to turn to—organizations, conferences, accrediting agencies, associations,
literature, and networking, for example.”
Quality = Value
“In summary, quality only exists through the creation of value in everything
that we do,” Buck concludes. “When we’re talking about quality,
we’re really talking about value creation and all the elements in the
balance scorecard. As an industry, we need to morph into that way of thinking.
Our value contribution across the entire continuum of care is essential.”
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