How to Fix U.S. Health Care

Much of the country already dislikes Barack Obama's Patient Protection and Affordable Care Act (PPACA), which accomplishes little to either protect patients or make health care affordable.  Voters resent the individual mandate, and there is a good incentive to not comply despite the tax penalty; insurance companies won't be able to decline coverage of preexisting conditions, including newly diagnosed ones.  Employers are looking for ways to drop health care as an employee benefit, and the country is waking up to the fact that the PPACA creates far more problems than it solves.

Voters are, however, justifiably dissatisfied with the status quo, in which health insurance premiums rise by double digits every year.  Lower compensation is driving many doctors and nurses out of the profession, and many doctors are now unwilling to accept Medicare.  Republicans must offer a genuine solution to take the White House and Senate from the Democrats next year, and a nonpartisan one is available off the shelf.  The internationally recognized ISO 9001:2008 standard for quality management systems (QMS) or a health care specific counterpart offers savings of $750 billion to $1.5 trillion a year, or $2,500 to $5,000 per American.

Cost of Poor Quality: the Multibillion-Dollar Gorilla in the Living Room

Thirty to sixty percent of the $2.5 trillion that the United States spent on health care in 2009 was wasted on activities that offer no benefits to patients and may have even hurt them.  A. Blanton Godfrey, former head of the prestigious Juran Institute and now Board Chairman of the Institute for Healthcare Improvement, wrote in 2000 that "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."  Cindy Jimmerson of Lean Healthcare West added, "The national numbers for waste in health care are between 30% and 40%, but the reality of what we've observed doing minute-by-minute observation over the last three years is closer to 60%."

These estimates are highly credible.  Scientific management pioneers like Henry Ford, Frank Gilbreth, and Frederick Winslow Taylor demonstrated that an individual job can easily waste more than 50 percent of a worker's efforts.  To this may be added the enormous waste in complex health care systems like hospitals.  A surgical team that has to wait for an operating room cannot, for example, be paid for the wasted time.  This waste must be reflected in lower compensation for health care professionals, higher costs for patients, or a combination.  The same goes for poor job designs that require nurses to walk instead of actually care for patients.  The Henry and Clara Ford Hospital was designed explicitly, per Henry Ford's efficiency principles, to minimize the walking that nurses needed to do.

Even worse is the fact that preventable medical mistakes, including hospital-acquired infections, kill upward of 98,000 Americans every year: more than motor vehicle accidents and violent crime put together.  QMSs are a proven off-the-shelf solution to all these problems.

What are Quality Management Systems?

QMSs evolved from division of labor during the Industrial Revolution, which made it impossible for any individual worker to control the quality of a shop's output.  The ISO 9001 standard for quality management systems, which was first introduced in 1987, recognizes explicitly that whenever people work in a complex system, any defects in that system will produce defective work regardless of the skill and diligence of the people involved.  Up to 90 percent of all preventable harm to patients results not from physician negligence, but rather from deficiencies in the complex systems in which doctors must work.

Here is but one example of the many defects that pervade health care systems.  A surgeon has no supervisory control over the people whose job it is to clean the operating room even though he or she is likely to be sued if the patient gets a postoperative infection.  One surgeon claimed he was dismissed from his job for complaining about a fly-infested operating room, and the hospital's spokesperson admitted that the flies were present.  The surgeon also does not supervise the numerous hospital personnel who change the patient's dressings, and failure to wash hands between patients is far from infrequent.

An ISO 9001-compliant QMS ensures that the hospital or clinic is a safe and efficient place for the doctor to deliver medical care and for the patient to receive it.  It makes sure the operating room is clean and is available when the surgical team needs it.  As another example, a QMS ensures that mammography results don't get mixed up so one woman loses a healthy breast while another's cancer goes undetected.  It absolutely does not replace physician judgment with mandates or guidelines such as those that might come from the United Kingdom's National Institute for Health and Clinical Excellence (NICE).

In 2001, the Automotive Industry Action Group (AIAG) published "A Healthy Choice: New AIAG initiative helps bring ISO 9000 to healthcare, promising the auto industry significant quality gains and big savings in cost."  This article advocated explicitly the implementation of ISO 9001 in health care organizations.  The Physicians Clinic of Iowa has already implemented an ISO 9001-compliant QMS with proven results, and other health care providers are following suit on an individual basis.

A $750-billion to $1.5-trillion reduction in the nation's health care costs will, however, require comprehensive implementation of quality management systems in all health care organizations including hospitals, laboratories, clinics, and so on.  This is achievable on a national scale if, for example, Medicare requires hospitals and so on to meet the standard's requirements as a condition of eligibility.  Health care insurers can do the same.

The cost could conceivably be divided between insurers (including Medicare if Medicare is a payer) and each health care service provider such as a hospital or clinic.  The enormous savings would, however, far outweigh the implementation costs.  The eventual result would be $750 billion or more a year to share between patients and employers in the form of lower health insurance premiums, health care professionals as higher compensation, and insurers and for-profit hospitals as higher profits.  Perhaps even more important would be better outcomes for patients along with the avoidance of tens of thousands of preventable deaths.

Nonpartisan industrial science can therefore achieve simply, easily, and effectively what ideologies like wealth redistribution, individual insurance mandates, and so on cannot.  Or, as stated by Mark Twain's Connecticut Yankee, "Somehow, every time the magic of folderol tried conclusions with the magic of science, the magic of folderol got left."

Disclaimer: This article cites the above-named organizations and individuals solely with regard to the role of quality management systems in health care.  It does not imply said entities' endorsement of any electoral objective in 2012.

Much of the country already dislikes Barack Obama's Patient Protection and Affordable Care Act (PPACA), which accomplishes little to either protect patients or make health care affordable.  Voters resent the individual mandate, and there is a good incentive to not comply despite the tax penalty; insurance companies won't be able to decline coverage of preexisting conditions, including newly diagnosed ones.  Employers are looking for ways to drop health care as an employee benefit, and the country is waking up to the fact that the PPACA creates far more problems than it solves.

Voters are, however, justifiably dissatisfied with the status quo, in which health insurance premiums rise by double digits every year.  Lower compensation is driving many doctors and nurses out of the profession, and many doctors are now unwilling to accept Medicare.  Republicans must offer a genuine solution to take the White House and Senate from the Democrats next year, and a nonpartisan one is available off the shelf.  The internationally recognized ISO 9001:2008 standard for quality management systems (QMS) or a health care specific counterpart offers savings of $750 billion to $1.5 trillion a year, or $2,500 to $5,000 per American.

Cost of Poor Quality: the Multibillion-Dollar Gorilla in the Living Room

Thirty to sixty percent of the $2.5 trillion that the United States spent on health care in 2009 was wasted on activities that offer no benefits to patients and may have even hurt them.  A. Blanton Godfrey, former head of the prestigious Juran Institute and now Board Chairman of the Institute for Healthcare Improvement, wrote in 2000 that "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."  Cindy Jimmerson of Lean Healthcare West added, "The national numbers for waste in health care are between 30% and 40%, but the reality of what we've observed doing minute-by-minute observation over the last three years is closer to 60%."

These estimates are highly credible.  Scientific management pioneers like Henry Ford, Frank Gilbreth, and Frederick Winslow Taylor demonstrated that an individual job can easily waste more than 50 percent of a worker's efforts.  To this may be added the enormous waste in complex health care systems like hospitals.  A surgical team that has to wait for an operating room cannot, for example, be paid for the wasted time.  This waste must be reflected in lower compensation for health care professionals, higher costs for patients, or a combination.  The same goes for poor job designs that require nurses to walk instead of actually care for patients.  The Henry and Clara Ford Hospital was designed explicitly, per Henry Ford's efficiency principles, to minimize the walking that nurses needed to do.

Even worse is the fact that preventable medical mistakes, including hospital-acquired infections, kill upward of 98,000 Americans every year: more than motor vehicle accidents and violent crime put together.  QMSs are a proven off-the-shelf solution to all these problems.

What are Quality Management Systems?

QMSs evolved from division of labor during the Industrial Revolution, which made it impossible for any individual worker to control the quality of a shop's output.  The ISO 9001 standard for quality management systems, which was first introduced in 1987, recognizes explicitly that whenever people work in a complex system, any defects in that system will produce defective work regardless of the skill and diligence of the people involved.  Up to 90 percent of all preventable harm to patients results not from physician negligence, but rather from deficiencies in the complex systems in which doctors must work.

Here is but one example of the many defects that pervade health care systems.  A surgeon has no supervisory control over the people whose job it is to clean the operating room even though he or she is likely to be sued if the patient gets a postoperative infection.  One surgeon claimed he was dismissed from his job for complaining about a fly-infested operating room, and the hospital's spokesperson admitted that the flies were present.  The surgeon also does not supervise the numerous hospital personnel who change the patient's dressings, and failure to wash hands between patients is far from infrequent.

An ISO 9001-compliant QMS ensures that the hospital or clinic is a safe and efficient place for the doctor to deliver medical care and for the patient to receive it.  It makes sure the operating room is clean and is available when the surgical team needs it.  As another example, a QMS ensures that mammography results don't get mixed up so one woman loses a healthy breast while another's cancer goes undetected.  It absolutely does not replace physician judgment with mandates or guidelines such as those that might come from the United Kingdom's National Institute for Health and Clinical Excellence (NICE).

In 2001, the Automotive Industry Action Group (AIAG) published "A Healthy Choice: New AIAG initiative helps bring ISO 9000 to healthcare, promising the auto industry significant quality gains and big savings in cost."  This article advocated explicitly the implementation of ISO 9001 in health care organizations.  The Physicians Clinic of Iowa has already implemented an ISO 9001-compliant QMS with proven results, and other health care providers are following suit on an individual basis.

A $750-billion to $1.5-trillion reduction in the nation's health care costs will, however, require comprehensive implementation of quality management systems in all health care organizations including hospitals, laboratories, clinics, and so on.  This is achievable on a national scale if, for example, Medicare requires hospitals and so on to meet the standard's requirements as a condition of eligibility.  Health care insurers can do the same.

The cost could conceivably be divided between insurers (including Medicare if Medicare is a payer) and each health care service provider such as a hospital or clinic.  The enormous savings would, however, far outweigh the implementation costs.  The eventual result would be $750 billion or more a year to share between patients and employers in the form of lower health insurance premiums, health care professionals as higher compensation, and insurers and for-profit hospitals as higher profits.  Perhaps even more important would be better outcomes for patients along with the avoidance of tens of thousands of preventable deaths.

Nonpartisan industrial science can therefore achieve simply, easily, and effectively what ideologies like wealth redistribution, individual insurance mandates, and so on cannot.  Or, as stated by Mark Twain's Connecticut Yankee, "Somehow, every time the magic of folderol tried conclusions with the magic of science, the magic of folderol got left."

Disclaimer: This article cites the above-named organizations and individuals solely with regard to the role of quality management systems in health care.  It does not imply said entities' endorsement of any electoral objective in 2012.

RECENT VIDEOS