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Select Cases from Implementing Continuous Quality Improvement in Health Care West Florida Regional Medical Center Curtis P. McLaughlin West Florida Regional Medical Center (WFRMC) is a Hospital Corporation of America (HCA)-owned and operated, for-profit hospital complex on the north side of Pensacola, Florida. Licensed for 547 beds, it operated approximately 325 beds in December 1991, plus the 89-bed psychiatric Pavilion and the 58-bed Rehabilitation Institute of West Florida. The 11-story office building of the Medical Center Clinic, P.A., was attached to the hospital facility, and a new cancer center was under construction. The 130 doctors practicing at the Medical Center Clinic and its satellite clinics admitted mostly to WFRMC, whereas most of the other doctors in this city of 150,000 practiced at both Sacred Heart and Baptist Hospitals downtown. Competition for patients was intense, and in 1992, as many as 90% to 95% of patients in the hospital were admitted subject to discounted prices, mostly Medicare for the elderly, CHAMPUS for military dependents, and Blue Cross/Blue Shield of Florida for the employed and their dependents. The continuous quality improvement (CQI) effort had had some real successes over the previous four years, especially in the areas where pack-age prices for services were required. All of the management team had been trained in quality improvement techniques according to HCA’s Deming-based approach, and some 25 task forces were operating. The experiment with departmental self-assessments, using the Baldrige Award criteria and an instrument developed by HCA headquarters, had spurred department heads to become further involved and begin to apply quality improvement techniques within their own work units. Yet John Kausch, the Center’s CEO, and his senior leadership sensed some loss of interest among some managers, whereas others who had not bought into the idea at first were now enthusiasts. THE HCA CQI PROCESS John Kausch had been in the first group of HCA CEOs trained in CQI techniques in 1987 by Paul Batalden, M.D., Corporate Vice President for Medical Care. John had become a member of the steering committee for HCA’s overall quality effort. The HCA approach was dependent on the active and continued participation of top local management and on the Plan-Do-Check-Act (PDCA) cycle of Deming. Figure 1 shows that process as presented to company employees. Dr. Batalden told the case writer that he did not work with a hospital administrator until he was convinced that that individual was fully committed to the concept and was ready to lead the process at his or her own institution—a responsibility that included being the one to teach the Quality 101 course on site to his or her own managers. John Kausch also took members of his management team to visit other quality exemplars, such as Florida Power and Light and local plants of Westinghouse and Monsanto. In 1991, John Kausch became actively involved in the Total Quality Council of the Pensacola Area Chamber of Commerce (PATQC) when a group of Pensacola area leaders in business, government, military, education, and health care began meeting informally to share ideas in productivity and quality improvement. From this informal group emerged the PATQC under the sponsorship of the Chamber of Commerce. The vision of PATQC was “helping the Pensacola area develop into a total quality community by promoting productivity and quality in all area organizations- public and private, and by promoting economic development through aiding existing business and attracting new business development.” The primary employer in Pensacola, the U.S. Navy, was using the total quality management (TQM) approach extensively, was quite satisfied with the results, and supported the Chamber of Commerce program. In fact, the first 1992 one-day seminar presented by Mr. George F. Butts, HCA’s FOCUS-PDCA Cycle Source: Hospital Corporation of America, Nashville, Tennessee, © 1988, 1989. Not for further reproduction. consultant and retired Chrysler Vice President for Quality and Productivity was held at the Naval Air Station’s Mustin Beach Officer’s Club. Celanese Corporation, a Monsanto division and the largest nongovernmental employer in the area, also supported PATQC. The CQI staffing at WFRMC was quite small, in keeping with HCA practice. The only employee in the program was Ms. Bette Gulsby, M.Ed., WFRMC has been one of several HCA hospitals to work with a self-assessment tool for department heads. Exhibit 2 shows the cover letter sent to all department heads. Exhibit 3 shows the Scoring Matrix for Self-Assessment. Exhibit 4 shows the Scoring Guidelines and Exhibit 5 displays the five assessment categories used. FOUR EXAMPLES OF TEAMS IV Documentation The nursing department originated the IV Documentation Team in September 1990 after receiving documentation from the pharmacy department that, over a 58-day period, there had been $16,800 in lost charges related to the administration of intravenous (IV) solutions. The pharmacy attributed the loss to the nursing staff’s recordkeeping. This was the first time the nursing department was aware of a problem or that the pharmacy department had been tracking this variable. There were other lost charges, not yet quantified, due to recording errors in the oral administration of pharmaceuticals as well. The team formed to look at this problem found that there were some 15 possible reasons why the errors occurred, but that the primary one was that documentation of the administration of the IV solution was not entered into the medication administration record (MAR). The MAR was kept at the patient’s bedside, and each time that a medication was administered, the nurse was to enter documentation into this record. The team had to come to understand some terms as they went along. According to the way the pharmacy kept its books, anything that was sent to the floors but not billed within 48 to 72 hours was considered a “lost charge.” If an inquiry was sent to the floor about the material and what happened and a correction was made, the entry was classified as “revenue recovered.” Thus, the core issue was not so much one of lost revenue as one of unnecessary rework in the pharmacy and on the nursing floors. The team developed Pareto charts showing the reasons for the documentation errors. The most common ones were procedural—for example, “patient moved to the operating room,” or “patient already discharged.” Following the HCA model, these procedural problems were dealt with one at a time to correct the accounting for unused materials. The next step in the usual procedure was to develop a run chart to show what was happening over time to the lost charges on IVs. Here, the team determined that the best quality indicator would be the ratio of lost charges to total charges issued. At this point, pharmacy management realized that it lacked the denominator figure and that its lack of computerization led to the lack of that information. Therefore, the task force was inactive for three months, while the pharmacy implemented a computer system that could provide the denominator. Ms. Debbie Koenig, Assistant Director of Nursing, who was responsible for the team, said that the next step would be to look at situations where the MAR was not at the patient’s bedside but perhaps at the nursing station so that a nurse could not make the entry at the appropriate time. This was an especially bothersome rework problem because of nurses working various shifts and because, occasionally, an agency nurse had been on duty and was not available to consult when the pharmacy asked why documentation was not present for an IV dose of medication. Universal Charting There was evidence that a number of ancillary services results, “loose reports,” were not getting into the patients’ medical records in a timely fashion. This was irritating to physicians and sometimes resulted in delays in a patient’s discharge, which under DRGs (diagnosis-related groups) meant higher costs without higher reimbursement. One employee filed a suggestion that a single system be developed to avoid people running over other people on the floor doing the “charting.” A CQI team was developed and led by Ms. Debbie Wroten, Medical Records Director. The 12-member team included supervisors and directors from the laboratory, the pulmonary lab, the EKG lab, medical records, radiology, and nursing. They developed the following “Opportunity Statement”: At present, six departments are utilizing nine full-time equivalents 92 hours per week for charting separate ancillary reports. Rework is created in the form of repelling in-house patient records, creating an ever-increasing demand for chart accessibility. All parties affected by this process are frustrated because the current process increases the opportunity for lost documentation, chart unavailability, increased traffic on units creating congestion, prolonged charting times, and provides for untimely availability of clinical reports for patient care. Therefore, an opportunity exists to improve the current charting practice for all departments involved to allow for the efficiency, timeliness, and accuracy of charting loose reports. Each department was asked to use a common “charting log” track for several weeks of the number of records charted, who did the charting, when it was done, the preparation time, the number of reports charted, the number of reports not charted (missed), and the personnel hours consumed in charting. These data gave the team considerable insight into the nature of the problem. Not every department was picking up the materials every day. Two people could cover the whole hospital in three-quarters of an hour each or one person in 1.5 hours. The clinical chemistry laboratory, medical records, and radiology were making two trips per day, whereas other departments were only able to chart every other day and failed to chart over the weekends. The processes used by all the groups were similar. The printed or typed reports had to be sorted by floors, given room numbers if missing, taken to the floors, and inserted into patient charts. If the chart was unavailable, they had to be held until the next round. A further problem identified was that when the clerical person assigned to these rounds was not available, a technical person, who was paid considerably more and was often in short supply, had to be sent to do the job. A smaller team of supervisors who actually knew and owned the charting efforts in the larger departments (medical records, radiology, and clinical chemistry) was set up to design and assess the pilot experiment. The overall team meetings were used only to brief the department heads to gain their feedback and support. A pilot experiment was run in which these three departments took turns doing the runs for each other. The results were favorable. The pilot increased timeliness and chart availability by charting four times per day on weekdays and three times per day on weekends. Report availability was improved, and there were fewer phone calls. Nursing staff, physicians, and participating departments specifically asked for the process to be continued. The hours of labor dropped from 92 weekly to less than 45, using less highly paid labor. Therefore, the team decided that the issues were important enough that they should consider setting up a separate Universal Charting Team to meet the needs of the entire hospital. However, an unanticipated hospital census decline made impractical the possibility of requesting additional staffing, etc. Consequently, the group reevaluated the possibility of continuing the arrangement developed for the pilot using the charting hours of the smaller departments on a volume basis. It was discovered that this had the effect of freeing the professional staff of the smaller departments from charting activities and a very minimal allocation of hours floated to the larger departments. It also increased the availability of charters in the larger departments for other activities. The payroll department was then asked to develop a system for allocating the hours that floated from one department to another. That proved cumbersome, so the group decided to allocate charting hours on the basis of each department’s volume. “In the event that one or more departments experiences a significant increase/decrease in charting needs, the group will reconvene and the hourly allocation will be adjusted.” The resulting schedule has the lab making rounds at 6:00 AM and 9:00 AM and radiology at 4:00 PM and 9:30 PM Monday through Friday, and Medical Records at 6:00 AM, 1:00 PM, and 8:00 PM on Saturday and Sunday. Continuing statistics were kept on the process, which is shown in Exhibit 6. The system continued to work effectively. Labor, Delivery, Recovery, Postpartum (LDRP) Nursing Competition for young families needing maternity services had become quite intense in Pensacola. WFRMC Obstetrical (OB) Services offered very traditional services in 1989 in three separate units—labor and delivery, nursery, and postpartum—and operated considerably below capacity. A consultant was hired to evaluate the potential growth of obstetrical services, the value of current services offered by WFRMC, customers’ desires, competitors’ services, and opportunities for improvement. Focus group interviews with young couples (past and potential customers) indicated that they wanted safe medical care in a warm, homelike setting with the least possible number of rules. Most mothers were in their thirties, planning small families with the possibility of only one child. Fathers wanted to be “actively involved” in the birth process. The message came back, “We want to be actively involved in this experience, and we want to make the decisions.” The consultant challenged the staff to develop their own vision for the department based on the focus group responses, customer feedback, and national trends. It became clear that there was a demand for a system in which a family-centered birth experience could occur. That system needed to revolve around the customers’ preferences rather than making the customers follow a rigid traditional routine. Customers wanted all aspects of a normal delivery to happen in the same room. The new service would allow the mother, father, and baby to remain together throughout the hospital stay, now as short as 24 hours. Friends and families would be allowed and encouraged to visit and participate as much as the new parents desired. The main goals were to be responsive to the customer’s needs and to provide safe, quality medical care. The hospital administration and the six obstetricians practicing there were eager to see obstetrical services grow. They were open to trying and supporting the new concept. The pediatricians accepted the changes, but without great enthusiasm. The anesthesiologists were opposed to the change. The OB supervisor and two of the three nursing head nurses were also opposed to any change. They wanted to continue operations in the traditional manner. When the hospital decided to adopt the new LDRP concept, it was clear that patients and families liked it but that the nursing staff, especially management, did not. The OB nursing supervisor retired, one head nurse resigned, one was terminated, and the third opted to move from her management position to a staff nurse role. Ms. Cynthia Ayres, RN, Administrative Director, responsible for the psychiatric and cardiovascular services, was assigned to implement the LDRP transition until nursing management could be replaced. One of the issues involved in the transition was clarification of the charge structure. Previously each unit charged separately for services and supplies. Now that the care was provided in a single central area, the old charge structure was unnecessarily complex. Duplication of charges was occurring, and some charges were being missed because no one was assuming responsibility. Ms. Ayres decided to use the CQI process to develop a new charge process and to evaluate the costs and resource consumption of the service. Ms. Ayres had not been a strong supporter of the CQI process when it was first introduced into the organization. She had felt that the process was too slow and rigid, and that data collection was difficult and cumbersome. Several teams were organized and assigned to look at specific areas of the LDRP process. To reach a simplified charge process, as well as a competitive price, all aspects of the process had to be analyzed. Meetings were held with the nursing and medical staff. Management of OB patient and physician preferences in terms of supplies and practices were analyzed. A number of consensus conferences were held to discuss observed variations. For example, each of the six obstetricians specified a different analgesic for pain control. All of these drugs appeared effective for pain control, but their cost per dose ranged from $10 to $75. The physicians agreed that the $10 product was acceptable since the outcome was the same. Another standard practice was sending placentas to the pathology laboratory for analysis after every normal delivery. This involved labor time, lab charges, and a pathologist’s fee for review. The total procedure cost $196. When questioned about the practice, the current medical staff did not feel it was necessary medically nor the current practice nationally, but felt that they were just following the rules. Upon investigation, the team found that an incident involving a placenta had occurred 15 years ago that had led the service chief (since retired) to order all placentas sent to the lab. The obstetricians developed criteria for when it was medically necessary for the lab review of a placenta. This new rule decreased the number of reviews by 95%, resulting in cost savings to the hospital and to patients. The team reviewed all OB charges for a one-year period. They found that in 80% of the normal deliveries, 14 items were consistently used. The other items were due to variations in physician preferences. The teams and the physicians met and agreed on which items were the basic requirements for a normal delivery. These items became the basic charges for package pricing. The team met weekly for at least one hour for over a year. Some meetings went as long as five hours. Initially, there was a great deal of resistance and defensiveness. Everyone wanted to focus on issues that did not affect him or herself. The physicians objected that they were being forced to practice “cookbook medicine” and that the real problem was “the hospital’s big markup.” Hospital staff continued to provide data on actual hospital charges, resource consumption, and practice patterns. The hospital personnel continued to emphasize repeatedly that the physicians were responsible for determining care. The hospital’s concern was to be consistent and to decrease variation. Another CQI team, the Documentation Team, was responsible for reviewing forms utilized previously by the three separate units. The total number of forms used had been 30. The nursing staff was documenting vital signs an average of five times each time care was provided. Through review of policies, standards, documentation, and care standards, the number of forms was reduced to 20. Nurses were now required to enter each care item only one time. The amount of time spent by nurses on documentation was reduced 50%, as was the cost of forms. Data entry errors were also reduced. The excess costs that were removed were not all physician-related. Many had to do with administrative and nursing policies. Many were due to old, comfortable, traditional ways of doing things. When asked why a practice was followed, the typical response was, “I don’t know; that’s just the way we’ve always done it.” The OB staff became comfortable with the use of CQI. They recognized that, although it requires time and effort, it does produce measurable results. The OB staff continued to review their practices and operations to identify opportunities to streamline services and decrease variation. Pharmacy and Therapeutics Team In late 1987, a CQI team was formed jointly between the hospital’s Pharmacy and Therapeutics (P&T) Committee and the pharmacy leadership. The first topic of concern was the rapidly rising costs of inpatient drugs, especially antibiotics, which were then costing the hospital about $1.3 million per year. The team decided to study the process by which antibiotics were selected and began by asking physicians how they selected antibiotics for treatment. Most of the time physicians ordered a culture of the organism believed to be causing the infection from the excess costs that were removed were not all physician-related. Many had to do with administrative and nursing policies. Many were due to old, comfortable, traditional ways of doing things. When asked why a practice was followed, the typical response was, “I don’t know; that’s just the way we’ve always done it.” The OB staff became comfortable with the use of CQI. They recognized that, although it requires time and effort, it does produce measurable results. The OB staff continued to review their practices and operations to identify opportunities to streamline services and decrease variation. Pharmacy and Therapeutics Team In late 1987, a CQI team was formed jointly between the hospital’s Pharmacy and Therapeutics (P&T) Committee and the pharmacy leadership. The first topic of concern was the rapidly rising costs of inpatient drugs, especially antibiotics, which were then costing the hospital about $1.3 million per year. The team decided to study the process by which antibiotics were selected and began by asking physicians how they selected antibiotics for treatment. Most of the time physicians ordered a culture of the organism believed to be causing the infection from the microbiology lab. A microbiology lab report came back identifying the organism and the antibiotics to which it was sensitive and those to which it was resistant. Some physicians reported that they would look down the list (which was in alphabetical order) until they came to an antibiotic to which the organism was sensitive and order that. A study of antibiotic utilization showed a high correlation between use and alphabetical position, confirming the anecdotal reports. Therefore, the team recommended to the P&T committee that the form be changed to list the antibiotics in order of increasing cost per average daily dose. The doses used would be based on current local prescribing patterns rather than recommended dosages. The P&T committee, which included attending physicians, approved the change and reported it in their annual report to the medical staff. Figure 4 shows what happened to the utilization of “expensive” antibiotics (more than $10 per dose) from 1988 to 1991. These costs were not adjusted at all for inflation in drug prices during this period. The estimated annual saving was $200,000. Given this success, in 1989 the team went on to deal with the problem of the length of treatment using antibiotics. Inpatients did not get a prescription for ten days’ supply. Their IM and IV antibiotics were continued until the physician stopped the order. If a physician went away for the weekend and the patient improved, colleagues were very reluctant to alter the medication until he or she returned. The team wrestled with how to encourage the appropriate ending of the course of treatment without hassling the physicians or risking undue legal liability problems. They settled on a sticker that was placed in the chart at the end of three days stating that the treatment had gone on for three days at that point and that an ending date should be specified if possible. The hospital newsletter and the P&T committee annual report noted that the physician could avoid this notice by specifying a termination date at the time of prescribing. This program seemed to be effective. Antibiotic costs again dropped, and there were no apparent quality problems introduced as measured by length of stay or by adverse events associated with the new system. In 1990, the team began an aggressive Drug Usage Evaluation (DUE) program and hired an assistant director of pharmacy clinical services to administer it. The position had to be rigorously cost-justified. DUE involved a review of cases to determine whether the selection and scheduling of powerful drugs matched the clinical picture presented. For example, if the physician prescribed one of three types of antibiotics known to represent a risk of kidney damage in 3% to 5% of cases, the DUE administrator ordered lab tests to study serum creatinine levels and warn the physician if they rose, indicating kidney involvement. There was a sharp decline in the adverse effects due to the use of these drugs. This program was expanded further to incorporate looking at other critical lab values and relating them to pharmacy activities beyond antibiotics, for example, use of IV solutions and potassium levels. By 1991, the unadjusted antibiotic costs for roughly the same number of admissions had dropped to less than $900,000. LOOKING AHEAD One of the things that had concerned John Kausch during 1991 was the fact that implementation had varied from department to department. Although he had written in his annual CQI report that the variation had certainly been within the range of acceptability, he was still concerned about how much variation in implementation was appropriate. If maintaining enthusiasm was a concern, forcing people to conform too tightly might become a demotivator for some staff. This issue and the four mentioned at the beginning of this case study should all be addressed in the coming year. CASE ANALYSIS This is a hospital with a large group of physicians closely tied to it, both economically and geographically. It is also operating in an area of intense competition and tight cost controls. The fact that 90% to 95% of the hospital’s compensation is case-based (DRGs) and not procedure-based has a profound impact on management motivation. Intense support for the CQI implementation was provided by Dr. Batalden and his staff at HCA corporate headquarters. ASSIGNMENT QUESTIONS 1. What were the strategic reasons behind West Florida Regional Medical Center’s (WFRMC’s) decision to invest heavily in TQM? 2. How did the program undertaken at WFRMC reflect this strategic impetus? 3. What were the strengths and weaknesses of the TQM program as it was implemented here? 4. What were the influences of corporate headquarters in this effort? 5. What effort has been made to measure the impact of the program on the hospital, especially in terms of supporting its strategic directions? 6. What effort has been made to use TQM to support tactical programs within the hospital? 7. What should John Kausch do next in dealing with continuous improvement? 8. If West Florida Regional Medical Center were to introduce an internal medicine residency program, how would the concepts of microsystems be incorporated into its current quality efforts? PROVIDE FIVE SCHOLARLY SOURCES WITHIN THE LAST FIVE YEARS.

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