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Cost of Waste/Poor Quality

Cost of Waste/Poor Quality. Lucy A. Savitz, Ph.D., MBA Senior Associate, Abt Associates Lucy_savitz@abtassoc.com Senior Scientist, Intermountain Healthcare Lucy.savitz@intermountainmail.org AHRQ Annual Meeting September 27, 2007 Bethesda, Maryland. Purpose.

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Cost of Waste/Poor Quality

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  1. Cost of Waste/Poor Quality Lucy A. Savitz, Ph.D., MBA Senior Associate, Abt Associates Lucy_savitz@abtassoc.com Senior Scientist, Intermountain Healthcare Lucy.savitz@intermountainmail.org AHRQ Annual Meeting September 27, 2007 Bethesda, Maryland

  2. Purpose • Reducing waste in health care is key to affordable, high quality health care. • Nearly half of consumed resources represent potentially recoverable waste in hospitals (44%)

  3. Framework for Estimating the Cost of Waste and Poor Quality in Health Care • AHRQ IDSRN Contract 290-00-0018, Task Order 11 to RTI International • Task Order Officer, Cynthia Palmer • Lead Investigators • Lucy A. Savitz • Brent James, Intermountain Healthcare • K. Bruce Bayley, Providence Health System • Jane Wallace, Intermountain Healthcare

  4. Deciding on Approach to Estimate Waste

  5. Scope of Observations • 61 workers • 72 observation hours (36 morning, 36 afternoon) • Staff role/functions • Physicians • Nurses • Other clinical (lab techs, pharmacists) • Years of experience • 8% less than 1 year • 72% more than 3 years

  6. How Evaluated • Standard set of activity categories and definitions (6 categories with 12 sub-category clarifications) • Operations • Clarifying • Defect/Error • Processing • Motion • Other • Trained observer • Developed toolset for structured observation and data capture • Replication of approach at an academic center

  7. ResultsCost of waste for frontline health care worker activities is substantial • Overall, 35% waste observed • Non-operational activities were almost evenly split across 3 major categories • 20% clarifying • 19% processing • 17% motion • Waste on a single 12-hour shift, 46-bed medical unit = $2,309

  8. Lessons Learned • Waste at the patient care level is primarily related to inefficient systems, wide variability in work processes, and “work around” culture • Key to waste reduction is developing the capacity to recognize and eliminate waste—developed toolset • Front line ownership & support of their role in problem solving is essential • Leadership must help remove constraints so a range of solutions can be tested • Culture change required to support the will to eliminate waste

  9. Knowledge Transfer Staff training at UNC Health Care • RTI International. Cost of Poor Quality or Waste in Integrated Delivery System Settings, AHRQ Final Report submitted to Cynthia Palmer, AHRQ TOO, Contract No. 290-00-0018, RTI Project No. 0207897.011; August 2006 Wallace, J, LA Savitz. Estimating Waste in Frontline Health Care Workers. Journal of Evaluation in Clinical Practice, forthcoming 2007 Automating toolset on a notebook at Intermountain

  10. Next Steps • Spread • RICU Supply/Material Waste Reduction • MRSA Project • Women’s & Newborn • Increasing observations for improved role/function estimates • Apply in outpatient setting

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