4/21/11

How NOT to spend too much on Quality Improvement

The financial imperatives of VBP are awakening hospital leaders to both vulnerabilities and opportunities in corners of their operation that have previously not been explored as quality improvement targets.

Like Rust (et al), we advocate a return-on-quality approach to assessing performance improvement initiatives that stress that quality improvement must be financially accountable.

Implicit in this is the acknowledgement that it is possible to spend too much on quality improvement activities.

When we work with a client, we develop a comprehensive Return on Quality framework that presents both the potential and the problem, in terms of market growth and cost reduction/risk avoidance. This top-down/bottom-up analysis is very helpful in setting the budget tolerances for the quality improvement project, and assessing the return on quality that can be expected from the project, and over which time frame.

Because quality improvement priorities are often well-known (through HCAHPS, internal patient satisfaction surveys, or even intuitively), the final task is developing the priority action steps that will deliver the desired outcomes – within the appropriate budget.

My Advice:

Before embarking on any quality improvement activity, whether you're considering a tweak to your existing processes or massive procedural and cultural overhauls, take the view that quality is an investment that deserves to yield a fair return.

Then, set about measuring the likely returns of your various improvement options. With return-on-quality as your indicator, you'll have a useful tool to help guide you to never overspend on quality improvement.

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