The same kind of management which permits a factory to give the fullest service will permit a hospital to give the fullest service, and at a price so low as to be within the reach of everyone (Ford, 1922. My Life and Work)

It is simply a matter of transferring those precision methods, so well established in the Ford shops, into hospital work (Norwood, 1931. Ford: Men and Methods 82).

• The Problem: rising health care costs, HMO administrators engaged in the unlicensed practice of medicine (by dictating patient care), and malpractice insurance premiums that are driving many doctors out of business
• Costs of poor quality in health care: $1800 per employee per year, $344 to $698 billion per year in 1998
  
• The focus of the AMA's past President's inaugural speech was gun control (!) as opposed to skyrocketing health care costs and malpractice insurance premiums.
• Socialized medicine: worse than no solution at all
• Proven Solutions such as error-proofing
• Downloadable PowerPoint presentation (about 2Mb) on why insurers, auto makers, Medicare, and Medicaid should require the health care providers with which they do business to register to ISO 9000 (or its IWA-1 counterpart).
• Virtues of the medical savings account (MSA)
• Improving Efficiency in health care
• JCAHO (Joint Commission on Accreditation of Healthcare Organizations) doesn't have the answers
• References
• Links: related information sources
• Levinson, "Malpractice cost not lone villain in health care," Wilkes-Barre Times Leader, 20 September 2002

Health care providers' cost of poor quality is estimated to be as high as 30-50 percent of the total paid for health care. For some companies the cost of employee health insurance is now higher than profits (Blanton Godfrey, 2000. "Managing Key Suppliers." Quality Digest, September, 2000, p. 20) [emphasis is mine]

The Institute of Medicine reported in November 1999 that 44,000 to 98,000 hospital patients die every year from avoidable mistakes (Shapiro, 2000, 50). Crago (2000) cites the same estimate and adds Harvard School of Public Health adjunct professor Lucian Leape's estimate of 120,000 deaths a year from all medical mistakes. This is more than the United States' combined death rate for motor vehicle accidents, firearm misuse, falls, drowning, and fire (Levinson, 2002. Henry Ford's Lean Vision, Productivity Press). [emphasis is mine]

"Tens of thousands of hospital patients die each year from causes that could be prevented as many U.S. hospitals turn a blind eye to safety, quality, and public accountability, according to a report Tuesday by the National Academy of Sciences. ...The tribune reported that 103,000 patients died from hospital-acquired infections and that an estimated 75,000 deaths were preventable in 2000." Michael Berence, Chicago Tribune, "Many die in hospital needlessly, study says."

This suggests that at least 30 percent of every health care dollar is waste, in the form of the cost of poor quality. HMO administrators and insurance companies are another form of waste because they contribute nothing to patient care. Anything that gets them out of the loop means more money for patients and physicians.

• The ISO 9000 industrial quality standard requires verification that people are qualified to perform their jobs. Per Rock (2001), "A survey the following year by the California Healthcare Association revealed that unlicensed staff was assisting in surgery in at least 20 California hospitals."
• "Early one January morning in 1996, a woman in Hayward, Calif., called her doctor's clinic complaining of symptoms that were classic for an abdominal aortic aneurysm-- an extremely dangerous swelling of the artery that carries blood from the heart. Unknown to her, the medical-advice phone line was manned by unlicensed assistants" (Rock, 2001). Failure to diagnose the problem resulted in the patient's death. One might even question the legality of allowing unlicensed personnel to dispense medical advice.
• The same article says that registered nurses (RNs) are buried under mountains of paperwork, and this reduces the time they can spend with patients.
• The same article cites a $2.7 million lawsuit that resulted from what looks like gross mismanagement: "Keck's daughter testified that for three and a half hours she begged for more help [for her mother, who was gasping for breath and ripping at her IV tubes], but it appeared to her that her mother's nurse was always in a hurry. Hartman recalls hearing the nurse 'bark out that they were understaffed, had been working six days a week, twelve-hour days, and that she could only get to one person at a time.'"
• Understaffing doesn't just happen; it is management's job to make sure there are enough people to do the work. "We're understaffed" would not be accepted as an excuse if a manager hired only ten people to run a production line that needed twenty. Making people in life-critical occupations work six twelve-hour days in a row could be construed as mismanagement; truck drivers are limited in the hours-per-day they can work because a mistake with a 60,000-pound truck by an exhausted driver could have serious consequences.
• The article describes cases in which unlicensed aides failed to replace a patient's oxygen mask (the patient would have died had a respiratory therapist not checked on the patient) and were assigned to read heart monitors. "...workers may go from mopping floors to taking blood pressure after just a few days of training." "...most unlicensed assistants have no more than a high school degree-- and nearly one in five is lacking even that." One unlicensed aide was told by nurses who "didn't have the time" to take out catheters and intravenous tubes.
• In many states, it is a criminal offense to allow (or instruct) an unlicensed person to practice medicine or nursing. State laws govern the type of work that doctors, registered nurses, licensed practical nurses, and nurses' aides may perform.
• "If you can't read your doctor's handwriting on the prescription you are handed when you leave, don't assume the pharmacist can..." (Landro, 2002). See below: handwritten instructions are not permitted in ISO 9000 industrial work environments, for obvious reasons.
• The most prevalent cause of in-hospital acquired infections is still the failure of nurses and doctors to adequately wash their hands between patient visits (Godfrey, 2000). This should be a no-brainer.
• HMO administrators come dangerously close to the unlicensed practice of medicine when they tell member physicians what procedures they can use. Connecticut Attorney General Richard Blumenthal writes, "In these situations [overriding HMOs' coverage guidelines] our success rate is close to 100% in securing coverage, even after the HMO has denied it…"

"Reducing the Costs of Poor Quality Health Care Through Responsible Purchasing Leadership" (Juran Institute and Midwest Business Group on Health) cited the following estimates:

• Costs of poor-quality care for employers are at least $1,800 per employee per year for health care coverage.
• Based on national health expenditures of $1.149 trillion, the estimated direct cost of poor-quality care in 1998 averaged between $344 billion and $698 billion.

The Problem, continued-- and why we need engineers to fix it. Here is where the American Medical Association's past President, Richard Corlin, put his priorities during his inaugural address:
"I began by telling you how I grew up in a world without guns." "We all know that violence of every kind is a pervasive threat to our society. And the greatest risk factor associated with that violence – is access to firearms. Because –there’s no doubt about it – guns make the violence more violent and deadlier." "Gun manufacturers are exempt by federal law from the standard health and safety regulations that are applied to all other consumer products manufactured and sold in the United States."

In other words, Dr. Corlin spent his inaugural address on a topic about which he knows little or nothing, instead of on things he has both the expertise and the duty (as AMA President) to do something about: rising health care costs and rising malpractice premiums that are driving physicians out of business. The fact that an engineer like myself has to discuss health care quality systems while Dr. Corlin (and also the Physicians for Social Responsibility, who claim to be experts on things like nuclear arms control, gun control, and global warming-- just about everything but quality of health care) discusses gun control points to a major root cause of the problem.

Socialized medicine is worse than no solution at all

There is no profit and loss account staring a government in the face. There is no check on high prices or poor service, such as customers can exercise upon private concerns. A government can monopolize a service and thus compel one to use it, it can under-serve and over-charge and make one pay a deficit in the form of taxes. All these conditions are utterly destructive of all the elements of business (Ford, 1930, Moving Forward, 117).

This is what happens when you let a government bureaucracy run something (Social Security, a criminally fraudulent pyramid scheme, is another example). There is no accountability and there are no consequences for failure, poor performance, or dysfunctional results. Incompetent or even dishonest performance that would get an employee in the private sector fired or demoted gets swept under the rug. (The same is admittedly true of executives with "golden parachutes," and executives who raise their own salaries or take bonuses while they lay off employees. Stockholders should quite seriously consider passing resolutions to fire such executives for prima facie evidence of incompetence or worse.) There is a well-known saying, "Be careful what you wish; you might get it," and the Netherlands did:

An estimated 5,981 people— an average of 16 a day— were killed by their doctors without their consent… And these numbers do not measure several other groups that are put to death involuntarily: disabled infants, terminally ill children, and mental patients.
…As the cost of socialized medicine in the Netherlands grew, doctors were lectured about the climbing cost of care. In many hospitals, signs were posted indicating how much old-age treatments cost taxpayers (Miniter, Richard. 2001. "The Dutch Way of Death," The Wall Street Journal, 4/25/2001, A20.). [emphasis is mine]

The Wall Street Journal is not known for printing inaccurate stories, even on its opinion page. "Putting someone to death involuntarily" constitutes, in the absence of a conviction and sentence for a capital crime, murder in any civilized nation. (As an example, if Oregon's assisted-suicide law stands, "putting someone to death involuntarily" would still constitute first-degree murder in that state.) This means the Netherlands' per-capita murder rate far exceeds that of the United States despite Europeans' frequent complaints about America's "violent culture."  The Miniter article says that Holland was the only Nazi-occupied country in which doctors universally disobeyed or ignored orders to euthanize patients or withhold treatment. The economics of socialized medicine apparently succeeded where Nazi coercion failed. In summary,

Substituting the engineer for the politician is a very natural step forward. The engineer can do that which the politician can never do under any circumstances. The engineer creates and harmonizes while the politician can at best only rearrange what he has in hand (Ford, 1930, Moving Forward, 249-250).

Poka-yoke, or error-proofing, comes to mind immediately. As an example, handwritten prescriptions are blamed for 25,000 deaths a year ("Message to physicians: Better read than dead." 2000. Wilkes-Barre Times Leader, 25 October 2000.) Handwritten instructions of any kind are absolutely forbidden in an ISO 9000-compliant workplace. "Little sticky notes with work instructions stuck to documents or machinery won't cut it" (Bakker, Robert M. 1996. "Why Companies Fail Quality Audits," Manufacturing Engineering, (News Desk), May 1996).

Now suppose that physicians always had to enter their prescriptions into computers, or portable handheld devices like Palm Pilots. This could almost totally eliminate the following medical errors:

• It would be impossible for the prescription to confuse the pharmacist.
• The computer could check for unusual dosages like 100 milligrams instead of 10 milligrams.
• The computer could cross-reference the medication against everything else the patient was taking for interactions.

Bar-coding medications can preclude their administration to the wrong patient. The syringe or pill container's bar code can be matched to a bar code on the patient's wristband immediately before administration. The FDA is now acting on this idea:

Every medication given in the hospital soon will carry a label with a supermarket-style bar code that can be matched to patients and help ensure that they get the right dose of the right drug at the right time.
...An estimated 7000 hospitalized patients die annually because of drug errors, where a wrong drug or a wrong dose is dispensed.
     --14 March 2003, "Bar coding suggested to reduce mix-up," Associated Press

Another example: disposable syringes have attached needle caps. After the injection is given, the needle is capped immediately. This makes inadvertent needle "sticks" impossible.

Virtues of the Medical Savings Account (MSA)

 HMOs claim to reduce costs but they do so by rationing care and cutting corners. Some HMO administrators come dangerously close to the unlicensed practice of medicine by telling doctors what procedures to use. Whatever doesn't add value is waste. An HMO's or insurance company's profit and entire administrative system are waste as far as the patient and doctor are concerned. A combination of high-deductible medical insurance (with lower premiums) and personal medical savings accounts (MSAs) would cut the HMO out of the loop completely. Patients would pay for routine or minor care out of their tax-deductible MSAs and the insurance would cover major care (Levinson, 2002. Henry Ford's Lean Vision.)

Whereas insurer profits and administrative costs for high-deductible insurance are still waste, this form of insurance is available for a few hundred dollars a year. If patients pay for routine examinations and minor treatments out of medical savings accounts, this

1. Gives the patient, not some insurer or HMO, control over the patient's treatment.
2. Cuts the insurer's profits and administrative costs out of the health care system. (E.g. fancy office buildings with plush executive office suites-- Henry Ford said that ornate monuments to a business' success often end up as tombs. The first such structures were, in fact, tombs; the Egyptians skipped the step of housing living executives in them and stocked them directly with dead ones.)

In the ordinary hospital the nurses must make many useless steps. More of their time is spent in walking than in caring for the patient. This hospital is designed to save steps. Each floor is complete in itself, and just as in the factories we have tried to eliminate the necessity for waste motion, so have we also tried to eliminate waste motion in the hospital (Ford, My Life and Work, 1922, 218).

This is simply the application of lean manufacturing principles to health care. Anything that does not add value, such as walking, waiting for supplies (Ford realized that an employee who was waiting for a tool or a part was not doing anything useful), or filling out unnecessary paperwork takes time away from patient care.

Henry Ford's Lean Vision provides a little more detail about using scientific management to reduce health care costs, but this Web page summarizes the book's content regarding health care. The bottom line is that industrial methods succeed where government-run socialized medicine (witness the mess in Britain, and patient-killing in the Netherlands) and HMOs fail. The reason is that the latter two systems ration a certain amount of money but they do nothing to get rid of the waste and malpractice-waiting-to-happen in the system in which doctors and nurses must work. They are themselves waste because the HMO administrators or government bureaucrats have to be paid.

The first approach, use of industrial methods and scientific management, succeeds because it makes the system more efficient. It delivers more patient care, and better patient care, for every health care dollar. This is exactly what Henry Ford did with the Model T; by reducing waste and inefficiency, he could deliver a better car at a lower price while paying his employees more and making a tidy profit for himself. The Henry and Clara Ford Hospital worked as well, so we are talking about proven results.

Chicago Tribune, 10 November 2002
Patients suffer as agency shields troubled hospitals [click for complete article]
Clean bills of health are awarded despite deaths, infection outbreaks

By Michael J. Berens and Bruce Japsen       Tribune staff reporters

...But the Tribune found that the Joint Commission often fails in its role as public guardian. Among the findings:

...Using a voluntary system of reporting, the Joint Commission vastly underestimates the number of avoidable patient deaths. The organization, for instance, documents just 12 cases of preventable hospital-borne infections since 1995. The Tribune found about 75,000 such deaths in just one year, a figure supported by state and government files. Joint Commission officials acknowledge substantial  inaccuracies in their records.

...The Joint Commission often has failed to alter a hospital's accreditation when faced with overwhelming evidence that patient care may have been compromised.

In early 1997, Bridgeport Medical Center in Connecticut was experiencing a crisis. Hospital-borne germs infected dozens of patients. Up to one in five patients contracted antibiotic-resistant germs after open-heart surgery. Dust and flies littered the operating room during surgeries, according to internal hospital records obtained by the Tribune. ...state public health investigators conducted a surprise inspection and found myriad patient care and infection control violations, such as failure by surgical assistants to wash hands.

[How hospitals prepare for JCAHO visits: can anyone say "Potemkin Village?"]

...A Minnesota hospital bought hundreds of new towels and pillows to grace every empty bed, then returned the merchandise after the survey, according to a Midwest surveyor who learned of the purchases by interviewing nurses.

"Resource constraints and staffing shortages create patient safety vulnerabilities and force even conscientious health care professionals, in some circumstances, to forego basic necessities such as handwashing in order to meet urgent patient care needs.  It is problems such as these that set the stage for the types of serious and deplorable outbreaks of nosocomial (hospital acquired) infections portrayed in the Tribune article."

This is like saying that, if your factory is shorthanded, it is an excuse to skip quality inspection activities. (I believe this is a criminal offense if it's done knowingly and willfully, and it involves a government contract that calls for such tests and inspections. Not legal advice; it's my recollection from an in-house course on "product substitution.") JCAHO's statement suggests that "staffing shortages" are even an excuse to ship nonconforming material to a customer. JCAHO's response to the Tribune article shows a total lack of understanding of management's responsibility to make sure there are enough qualified personnel to do the job.

Blumenthal, Richard. "What I Do for My 'Clients,' the Citizens." Letter to the editor, Wall Street Journal, 16 September 2002, A15 Crago, Michael G. 2000. "Patient Safety, Six Sigma, and ISO 9000 Quality Management." Quality Digest, November 2000.
Crago, Michael G. "Meeting Patient Expectations" (ISO 9000 will do for healthcare what it has systematically succeeded in doing for manufacturing and services.) Quality Progress, September 2002, p. 41.
"First Aid for Health Care," Quality Digest, December 2003
Godfrey, Blanton. 2000. "Managing Key Suppliers." Quality Digest, September, 2000, p. 20
Landro, Laura. 2002. "Deadly Errors Dog Procedures At Doctors' Offices and Clinics." Wall Street Journal, 29 August 2002, D3
Rock, Andrea. 2001. "How Hospitals Are Gambling with Your Life," Reader's Digest, September 2001.
Rooney, James J., Vanden Heuvel, Lee N., and Lorenzo, Donald K. "Reduce Human Error." Quality Progress, September 2002, p. 27
Shapiro, Joseph P. "Taking the mistakes out of medicine." U. S. News and World Report, 17 July 2000, 50-66

• "A Healthy Choice: New AIAG initiative helps bring ISO 9000 to healthcare, promising the auto industry significant quality gains and big savings in cost." [no longer available online]
  
• "Health Care Expert Says System is Broken," at the American Society for Quality web site.
• Hospital Defect Reduction: Will Device Makers Be Affected?
• "Recent articles in both The New York Times and The Wall Street Journal have reported that hospitals are adopting many defect reduction methodologies.1,2 These methodologies, such as six sigma, have already been used successfully by manufacturing companies such as GE and Toyota."
• Information technology and medication safety: what is the benefit?
• Mundy offers legislation to protect patients Legislation would reward hospitals for implementing quality management systems