Strategy and Leadership

1. Strategy and Leadership Edward F Crooks MD, CMQ, CPHQ, CLSSBB

2. Aligning the Information System. Financial system and organizational renewal to support quality

3. Culture QUALITY Structure ALIGNING Staff Rewards Information System SUPPORT ALIGNING

4. Strategy and Leadership Information System • To plan a course of action HCP first have to sift and interpret vast amount of data, distinguishing what is relevant from what is irrelevant. Definitions • Data are abstract representation of things, fact, concepts and instructions that are stored in a defined format and structure on a passive medium • Information is obtained when data are translated into results and statements that are useful for decision making. • For information to be useful data must be considered with the context of: • How they were obtained • How they are to be used

5. Strategy and Leadership An information distribution system must be developed, whereby effective processes are identified for information gathering and dissemination (Tweed-Weber, Inc 1992). An Organization must • Identify who needs to know the information • Determine what information they need to know in order to make decisions related to improving the quality of care • Develop a system whereby the right people receive the right information at the right time in the right way

6. Strategy and Leadership The Quality Measurement and management Project (1991) Developed seven basic concepts related to QMI • Health care data must be carefully defined and systematically collected and analyzed in their full context before they can be useful in quality management. • There are tremendous amounts of healthcare data and information available but no all are useful in quality management. • Mature quality management information revolves around clearly established pattern of care, not individual cases. Pattern identify a consistent process, which can be studied and improved. • Most quality indicators currently available are useful only as indicators of potential problems and not a s definitive measures of quality.

7. Strategy and Leadership The Quality Measurement and management Project (1991) • Multiple measures of quality need to be integrated to provide a clear picture of quality of care in an institution or managed care organization. • Developed outcomes information without monitoring the process of care, when warranted, is inefficient because it cannot lead directly to quality improvements • Cost and quality are inseparable issues.

8. Strategy and Leadership The Quality Measurement and management Project (1991) Seven-step Strategy for the interpretation and Utilization of Quality-of-Care Information. Step 1 Planning and Organizing for Data Collection, Interpretation and Use • Plan in advance for collection and utilization of data – greater likelihood of success. • Anticipate barriers • Identify responsibilities • Establish groundwork for multidisciplinary collaboration • Have a data dictionary • Defining all the data elements and calculations of indicators

9. Strategy and Leadership The Quality Measurement and management Project (1991) Step 2 Verifying and Collecting Data Purpose • Identify limitations of the data • Provide an opportunity for correcting the data • Identify opportunities for improving internal systems that lead ti better data • Review the data in order to be come familiar with it.

10. Strategy and Leadership The Quality Measurement and management Project (1991) Step 3 Identifying and Presenting Potentially Important Findings Preliminary Data Analysis Questions to be addressed - Bader and Bohr (1991) • How do these data compare with other organizations or previously trended internal data? • What is the trend over time? • How are data likely to be interpreted? • Is there an opportunity for improvement? • Who should receive the data? For what purpose?

11. Strategy and Leadership The Quality Measurement and management Project (1991) • Translate data into meaningful information • Tables are the most common format for presenting information • Highlight the most pertinent information • Minimal abbreviation and jargon • Clearly identify columns with specific findings highlighted with boldface type, underlining or other distinguishing marks.

12. Strategy and Leadership The Quality Measurement and management Project (1991) • Graphs and visual provide a “snapshot” of • Where the organization is: • Where the variation les; • The relative importance of identified problems • Impact, if any, of changes that have been instituted • Common graphical techniques • Pareto chart • Histogram • Scatter diagram • Run chart • Control chart • Stratification

13. Strategy and Leadership The Quality Measurement and management Project (1991) • Dashboards • Represent key management and performance indicators • Synchronize and synthesize vast amount of data into visual representations • Analyzing and forecast various organizational systems

14. Strategy and Leadership The Quality Measurement and management Project (1991) Step 4 Continuing to Study and Develop Recommendation for Change Is further study of the data warranted? Methods for further evaluation • Variation analysis • Seeks explanation for statistically significant differences in data • These differences may be due to clinical factors, patient factors, data collection or organizational characteristics. • Review of additional data • Collection and review of additional data may be necessary to completely understand the variations in the data

15. Strategy and Leadership The Quality Measurement and management Project (1991) Step 4 Continuing to Study and Develop Recommendation for Change • Retrospective medical reviews • Activities in which processes or outcomes are utilizing pre-established criteria or indicators. • Process analysis • Measure process variation • Look for ways to improve the process

16. Strategy and Leadership The Quality Measurement and management Project (1991) Step 5 Taking Action Individuals, teams, departments, and committees are empowered to make decisions and implement changes based on the information discovered by analyzing the data. • Education and training of staff • Education and/or reporting of findings to outside vendor or the public • Changing department policies and processes • Changes in practice pattern

17. Strategy and Leadership The Quality Measurement and management Project (1991) Step 6 Monitoring Performance • Monitor the impact and effectiveness of the QI action • Involves collecting additional data • Questions to be answered (Bader&Bohr, 1991) • Have the proposed changes actually been implemented? To what extent? • How could compliance with the changes be enhanced? • What are the changes having on patient outcomes? Are these desirable effects? • Should the changes be modified and then tested further, communicated on a wider scale, tested for a longer period of time before drawing conclusions, or ended because they are ineffective.

18. Strategy and Leadership The Quality Measurement and management Project (1991) Step 7 • Human Factors • Fear of data • Resentment of external data • Unrealistic expectation data • Lack of training related to planning, organizing and analyzing data. • Statistical Factors • Flawed data • Untimely data • Poorly displayed data • Organizational Factors • Data overload • Poor data retrieval system • Lack of resources • Poor relationships among administration, physicians, and staff

19. Strategy and Leadership The Quality Measurement and management Project (1991) Step 7 Communicating Results • QI begins with communication of where an organization is and where it is going • Bader and Bohr (1991) delineate three barriers to the interpretation and utilization of information • Human Factors • Statistical Factors • Organizational Factors

20. Strategy and Leadership Management Information System • Automated or computerized system • Information plays a key role in decision making in each stage of the management process. • Accurate and timely information is on ongoing requirement. • To establish a goal • Estimate resources • Allocate resources evaluate a QI process • Monitor a system • The quality of judgments and decisions is directly correlated with availability and reliability of data and its synthesis into information

21. Strategy and Leadership Management Information System • The choice for the design or flow of information are important: • Can be a dertermining factor in the survival of a patient or organization. • Rationale for management decision should be accurate and timely health information. • Information presented in governing body reports should be complete and sufficiently relevant to the organization’s mission, strategic goals, or customer and stakeholder needs.

22. Strategy and Leadership Management Information System Information contained in data can help leaders to: • Monitor aspects of organizational performance and take corrective action • Judge progress toward strategic goals and objectives • Determine priorities for continuous improvement • Evaluate the effectiveness of programs designed to improve health • Help the governing body evaluate and improve its performance

23. Strategy and Leadership Management Information System • Can be used to support a variety of activities with healthcare organizations: • Quality improvement • Cost control and productivity • Patient registration • Utilization management • Program planning and evaluation • External reporting • Research • Education

24. Strategy and Leadership Management Information System • Can identify problems, provide evidence to lead to solutions, and evaluate the results of implemented strategies. • Information system can be grouped into the following: • Clinical information system • Administrative support information systems • Decision support system

25. Strategy and Leadership Management Information System Clinical Information Systems • Design to support direct patient care processes • Great potential for analyzing and improving the quality of patient care • Expanded CIS includes: • EMR and their retrieval system • Computer-assisted medical decision making for H&P and Antibiotics Rx • Clinical application programs for heal risk program • Health maintenance organization encounter data • Clinical algorithms • Predictive modeling • Simulation

26. Strategy and Leadership Management Information System Criteria needed for a MIS – Managed Care prospective {Rontal (1993)} • Appropriate use • Place of service • Specific procedures • Preventive care • Cost-effectiveness • Patient satisfaction • Chronic illness management • Access to care • Patient education

27. Strategy and Leadership Management Information System Also needed are: • Outcomes of care for mortality • Morbidity • Complications • Readmissions • Quality of life • Disability

28. Strategy and Leadership Management Information System Barriers to implementation • Normal resistance to change • Mindset that patients can best be tended by the human mind • Lack of exposure to information science and computers in healthcare education and training programs • Inadequate resources

29. Strategy and Leadership Administrative Support Information Systems Aid day-today operation in HCO • Financial information systems • Human resources information • Office automation systems

30. Strategy and Leadership • Financial information systems • Human resources information • Office automation systems • Payroll • Accounts payable • Patient accounting • Cost accounting • Forecasting • Budgeting • Employee record • Position management • Labor analysis • Turnover and absenteeism • Word processing • Electronic mail • Scheduling • Facsimile/scanning • Electronic spreadsheet

31. Strategy and Leadership Decision Support Systems Deals with strategic functions, Decision Support, Risk Adjustment, Data interpretation and Benchmarking • Strategic planning and marketing • Resource allocation • Performance evaluation and monitoring • Product evaluation and services • Medical management • Evidence-based practice • Clinical guidelines and pathways

32. Strategy and Leadership Evaluating Systems - Checklist • Doses the system provide for capture, storage and retrieval of clinical and financial information from a a variety or sources: • HIM, medical records, admission, discharge, transfer, billing, laboratory, pharmacy, blood bank, operating room schedule and radiology. • Does the system interface with the organization’s existing information system? • Does the system allow for the establishment of “triggers” or thresholds for important measures of performance and signal an alert when these thresholds have been exceeded? • Does the system support Joint Commission and other accreditation and regulatory reporting requirement For a more exhaustive list please refer to Q Solution: Module Foundation, Techniques and Tools

33. Strategy and Leadership Buy or Build Checklist • Does the organization have the in-house expertise to build the system, database software, analytic tool and hardware for such a project? • Do either HIM or quality management staff have the full industry knowledge required to build an automated information system – architecture, nomenclature and other national standards? • What happens if the staff member who designed the program leaves the facility? Will the organization still be able to support the systems. For a more exhaustive list please refer to Q Solution: Module Foundation, Techniques and Tools

34. Culture QUALITY Structure ALIGNING Staff Rewards Information System SUPPORT Financial System ALIGNING

35. Strategy and Leadership Business case for Quality Improvement Initiatives Michael Bailit and Mary Beth Dyer - Beyond Bankable Dollars: Establishing a Business Case for Improving Health Care • Positive return on investment (ROI) is the most compelling business case for any type of investment. • However ROI is difficult to document for many QI interventions • Fragmented nature of the health care systems • Financial incentives are not aligned with quality • Lack of current health services research findings to support an ROI calculation • Not possessing the required data or capacity to calculate a true ROI for specific intervention.

36. Strategy and Leadership Business case for Quality Improvement Initiatives • Estimating indirect financial costs or savings related to quality interventions can be challenging. • It is getting easier for organizations to construct a business case for quality - a more supportive climate • The institute of Medicine’s reports on quality • The leapfrog Group’s promotion of patient safety in hospital • The National Committee for Quality Assurance annual state of health care quality report. • Enhanced Information technology capabilities improving the ability to measure and document health care quality • Purchasers and insurers rewarding organizations for performance

37. Strategy and Leadership Business case for Quality Improvement Initiatives • Despite the lack of a positive ROI many organizations see and act upon a business case for quality. • These organizations recognize quality’s soft benefits: outcomes and consumer satisfaction that are not typically capture in an ROI calculation • Organizations can more accurately gauge the over-all value of QI investment, by including the nonfinancial, or indirectly financial considerations in the business case argument.

38. Strategy and Leadership Business case for Quality Improvement Initiatives The Framework • Consist of 10 specific business case arguments that health care purchasers, insurers, and providers should consider when determining whether or not to invest in a specific quality improvement initiatives. • These 10 arguments fall within three categories: • Direct financial considerations • Strategic considerations • Internal organizational considerations

39. Return on Investment Reduced expenditures or Cost Avoidance Cost – cost of doing nothing Direct Financial Considerations Condition of Participations Alignment with Explicit Performance Incentives Image, Reputation and Product Differentiation Relationship Development with Key Stakeholders Strategic Positioning Strategic Considerations Relevance to the Organization’s Mission Impact on Internal Culture Internal Organizational Considerations

40. Strategy and Leadership Business case for Quality Improvement Initiatives Caveats • Organizations weigh business case considerations differently. • Not all potential arguments will be relevant for every organization or every initiative. • Some components will be more important than others at certain point in time when constructing a business case argument. • A business case argument is usually more compelling when a quality improvement initiative can be shown to align both with direct financial, indirect financial and non-financial considerations.

41. Strategy and Leadership Return on Investment • An ROI is evident if an organization realizes a financial return on an investment. • Financial return can be realized in the short or longer term. • Earlier returns have a higher value to the organization than later terms of the same magnitude. • ROI may be realized as: • Profit (bankable dollar) • Reduction in losses • Avoided cost

42. Strategy and Leadership Reduced Expenditure or Cost Avoidance • In this business case argument, an organization refers to well-supported research related to whether targeted quality interventions reduce expenditures or avoid costs. • However using this argument the organization is not able to definitely identify projected savings in excess of the cost of implementation (administrative cost or associated medical expenditure)

43. Strategy and Leadership Cost • Organization may use cost as an argument for investing in quality improvement if it cannot convincingly use ROI or cost effectiveness. • For this business case argument the organization documents current or projected cost associated with an identified problem. • This cost is seen as the cost of doing nothing. • This cost may suggest the importance of undertaking an QI initiative.

44. Strategy and Leadership Conditions of Participation • A regulatory or contractual requirement faced by an organization presents a compelling argument for making an investment of organizational resources. • Potential loss of contracts, revenues or market share related to lack of compliance with mandatory quality measures is an example of how conditions of participation can create a business case for quality. • Performance to a certain quality standards might be required for a hospital to designated as a center of excellence or be designated in a preferred tier of an insurer’s benefit plan.

45. Strategy and Leadership Alignment with Explicit Performance Incentive • Organization may be face with positive performance incentives for specific measures. • Organization therefore could consider a business case argument for QI on the extent to which is rewarded for such an investment, or the extent to which it could be penalized for lacking one. • Reward and penalties include: • Direct contractual incentives – revenues liked to specific performance measures. • Indirect incentives – purchaser’s or health plan’s public release of comparative performance information for peer organizations in a given market.

46. Strategy and Leadership Alignment with Explicit Performance Incentive • Purchasers and consumers look for the value-added differences among health plans and providers. There specific performance measures used by purchasers and insurers may constitute a business case for QI in these measured areas. • As purchasers and health plans create financial incentives linked to provider performance on standard measures HCO will be able to create a business case aligning internal and provider incentives with these external purchaser priorities for QI.

47. Strategy and Leadership Image, Reputation and Product Differential • Image, reputation, and product differentiation on quality measures directly affect market share and the ability to attract members or patient. • Better image and reputation leads to increase members or patient volume as well as an improved ability to recruit and retain high-quality staff and providers. • Loss of brand identity or reduced image and reputation can be considered as a factor in a business case

48. Strategy and Leadership Relationship Development with Key Stakeholder • An organization’s desire to develop or strengthen relationships with key stakeholders is often critical and deserving of a business investment. • A strong business case argument exist if the relationship involve collaboration (creating new value together) as distinct form mere exchange. • Nurturing relationships with key stakeholders also can open new opportunities for collaborative alliances than enhance the business case for quality in the longer term.

49. Strategy and Leadership Strategic Positioning • Business Case is based on an organization’s desire to influence future activity or behavior: in this case its strategic position. • The argument here is that a QI initiative will significantly improve the organization’s strategic position in the future, in part by changing the environment in which it operates. • This business case argument is much more focused on achieving a specific objective.

50. Strategy and Leadership Relevance to the Organization’s Mission • Organization may consider a QI investment in light of its relevance to the organization’s mission. • Organization may base a business decision partly on the mission of the organization, even when a portion of the mission may not be aligned with organizational financial objectives. • Stronger business case: • The larger the impact of the QI initiative in terms of improved medical outcomes, • The greater the certainty of the entity’s ability to achieve the improved outcomes