Appendix C (continued)

Cost of Poor Quality or Waste in Integrated Delivery System Settings

Table 4. Summary of Error Risk and Description
8Very lowBreakfast tray delivered to a fasting patient (removed before eaten), MD asked RN to obtain consent for bronchoscopy procedure (against hospital policy), electronic order entry errors (n=2) caught and corrected, Diazepam dose error (0.25 mg) on medication history form, Ofloxacin allergy listed in hospital information system was missing from MD and nursing history, premixed IV narcotics bag left at nurses' station, wrong preprinted name label attached to prescription slip (clerk caught and MD corrected error)
1LowVenipuncture repeated to correct a blood specimen labeling error
3ModerateRN copied 18 prescription drugs from patient history form to admission order form after MD wrote order to "continue previous meds," wrong medication strength found in electronic drug order file, pharmacist checking drug levels found Vancomycin dose not documented
4HighLaboratory worker recapped a needle after processing a fluid specimen, technical worker assisted a patient out of bed despite postpacemaker insertion bedrest order, RN discovered wrong Total Parenteral Nutrition solution infusing,* MD found a worker administering oral contrast solution to a nauseated patient at high risk for aspiration despite cancelled order*


*Worker-reported error.
Note: MD = medical doctor; RN = registered nurse; IV = intravenous.

Our intention is not to depict the observed workers as inattentive; in the majority of cases, quite the opposite was true. Most workers did not question the waste estimates during debriefing and welcomed the opportunity to assess their work process. Many workers offered illustrative examples of waste. An ICU physician in a teaching hospital estimated that at least half of the time he spends documenting is wasted by the need to locate information already recorded by others and by the repetition of day-to-day notes. A social worker indicated that delivering transportation vouchers and locating clothing wasted her time. A physical therapist expressed frustration over daily work interruptions related to the lack of designated physical therapy staff scheduling for the unit. A circulating nurse in a community hospital operating room described recurrent time wasted working around an inflexible, computerized, case cart system. A radiology technician, who spent 40% of the observation waiting for physician instructions, confirmed that waiting is a typical part of the daily work routine. The workers responded to problems by overcoming immediate obstacles and continuing work; management involvement was only observed once, when a phlebotomist mislabeled a blood specimen.

The following examples serve to illustrate typical responses to problems: When asked if the cramped workspace was distracting, a phlebotomist in an emergency department responded, "It's all part of the madness." A unit clerk, during a 1-hour morning observation, was interrupted 80 times while transcribing orders. A nurse opened an automated dispenser to retrieve a scheduled medication; even though the medication was available in the dispenser, it was missing from the electronic order file. The nurse sighed and then contacted a pharmacist to enter the order, delaying the medication administration by 10 minutes. During a routine review of drug-level results, a pharmacist discovered a Vancomycin dose missing from the electronic record. After briefly commenting on the fact that the drug levels indicated the dose was given, the pharmacist continued work without correcting the error. A physician, who found a worker erroneously administering oral contrast solution to a patient despite a cancelled written order, stopped the worker and had the clerk delete the order from the electronic record. When asked if he reported the problem or sought other remedies, he said, "I've tried it, and it doesn't do any good."

Time pressure was a prominent feature of the workflow, particularly of physician workflow. A physician in an urgent care clinic, who reported feeling fatigued because of limited sleep (related to clinical and academic demands) the previous night, was on the phone with his office receptionist and reviewing E-mail while four house staff waited for his time. An intensivist in a community hospital was conducting morning rounds with staff while writing orders and fielding interruptions. After finishing the discussion for each patient, the intensivist dictated a progress note on his mobile phone as other staff members waited. A conservative estimate of staff time spent waiting during the dictation was 42 minutes (not included in the waste estimates). During observation of two emergency department physicians, one did not hear his mobile phone ring, and the other hurried into an exam room and then suddenly stopped and remarked, "I forgot why I came in here." We could cite many other anecdotes that provide qualitative validation of our quantitative results.


Our study suggests that the cost of waste for frontline health care worker activities is substantial. Given our data, the lowest cost of waste in caregiver activities for a single-day shift on one 46-bed medical unit (staffed with eight RNs, eight patient care technicians, two care managers, one social worker, one physical therapist, one pharmacist, one respiratory therapist, two clerks, and two hospitalists) is USD 2,309 (12 hours x 26 workers x 7.40 per hour); the annual cost for the same unit is USD 843,000 (USD 2,309 x 365). Because of our conservative assumptions, these estimates represent an underestimate. Tucker's estimates of the annual losses to operational failures (for nurses alone) in a 204-bed hospital with 75% occupancy range from a lower limit of USD 51,000 to a maximum of USD 27 million per year.11

During the observations, workers spent less than half of their time engaged in operations. Nonoperational activities were almost evenly split between clarifying (20%), processing (19%), and motion (17%). The subgroup analyses suggested physicians and supervisory RNs spent more time and technicians spent less time than the overall average in clarification activities. Given the nature of their functions, these data are not surprising, and one might argue that time spent by more senior health care workers in clarification activities is important. We note that some of the clarification may be necessary aspects of training given the current methods used in academic teaching hospitals. Outside of training, one could argue that clarification activities indicate a lack of specified processes and a high tolerance for ambiguity,42,43 resulting in greater waste of the most experienced workers in our system. It is easy to make the case that redundant documentation or paperwork is an unproductive use of workers' time. Despite the advanced information technology available at Intermountain, redundant documentation and paperwork were not infrequent. Other investigators who have included observation methods to evaluate information technology in clinical work reported unanticipated results that would not have been uncovered without the qualitative data.44 It is self-evident that motion (i.e., traveling, locating, and waiting) is wasteful and should be minimized whenever possible.


The main study limitations relate to sampling and the observation method. Although our sample was larger than most observational studies, we note that it was a small, nonrandom sample. A larger sample with more complete representation across job classes would strengthen the external validity of our research. Other factors that limit the external validity of our results include the short duration of observation and the limiting of observation periods to weekday mornings and afternoons. With the exception of the urgent care clinic physician, the endoscopy nurse, and the radiology technician, only inpatient hospital staff were observed. In addition, we were unable to evaluate time spent on problem resolution and differences in work activities related to worker roles, experiences, or time of day.

The observation method, which is inherently subjective, has several limitations. The data collection tool was newly developed, and although reliability appears good for capturing general frontline worker activities, formal validation would strengthen the results. The activity categories are explicitly defined but may not be useful for nonfrontline staff (e.g., management, leadership, ancillary support staff). Our analysis did not lend itself to a full description of shifts between activities or multitasking that was particularly apparent in physician and RN work. Finally, we did not test the reliability of the coding scheme for problems or error severity.


Despite the limitations, the data are consistent with other reports of persistent workplace and patient safety problems within our current health care system.11,45-47 With the intent to guide quantitative study and generate hypotheses for future research, this study advances our understanding of the magnitude of the problem and the heterogeneity of the sample adds to the literature. Validation of the data with observed workers, our reliability assessment, explicit assumptions, and standardized data collection also lend credibility to the study. We noted a number of similarities between our study and another investigation with respect to daily operational problems, including problems' frequent occurrence and repetitive nature, as well as similar worker problem-solving behavior and a lack of management involvement.11 Time pressure, a tolerance for ambiguity, and insufficient cross-departmental communication most likely contributed to the poor operational quality observed.11,36,42,48 The participating institutions are nationally recognized for their excellence; therefore, our results are not explainable on the basis of selecting poor quality health systems.

Our results indicate that attention to operational quality is needed and could potentially improve patient safety. Results can be used to justify in-depth examination of targeted processes. In particular, results suggest the following recommendations for quality/safety initiatives:

  1. Minimize the need for clarification by explicitly specifying work processes and integrating problem-solving resources into the daily work flow.
  2. Focus attention on nursing supervisors and care managers—those roles with the highest observed cost of waste for nonphysician staff.
  3. Eliminate unnecessary documentation and paperwork.
  4. Investigate and target unnecessary workflow disruptions.
  5. Design facilities with attention to travel patterns and locate services where they are most accessible to users.

Recent successful use of TPS (or "lean") principles in health care have shown promise as a global operational quality improvement intervention.42,43,47,49-55 Successful application of TPS principles in other industries has created competitive, flexible organizations with the capacity to deliver operational excellence despite constant change.1,42,56-60 The overarching goal of the TPS is the pursuit of ideal product or service delivery. In health care, ideal is defined as exactly what the patients need, when they need it, with immediate response to problems, without error or waste, in a physically, emotionally, and professionally safe environment61 Four organizing principles guide the pursuit of ideal health care delivery:61

  1. Work activities are highly specified as to content, sequence, timing, and outcome.
  2. Pathways for all services are simple and direct.
  3. Requests and customer-supplier connections are simple, direct, and unambiguous.
  4. Improvements are made as close to the work as possible, by those most familiar with the work, guided by a coach trained in the use of the principles. All workers, at all levels, are taught to apply the principles and to maintain a relentless focus on solving operational process problems. The methods and tools employed to enact the principles are varied (e.g., standardized work, cross-trained workers, standardized problem solving using the A3 method),1,50-52,56,62-65 but the emphasis on principles is critical.

Health care leaders, policy makers, and health services researchers have been unsuccessfully seeking a cure for the escalating cost of health care. None of the change programs used so far (e.g., total quality management, continuous quality improvement, quality circles, work redesign, matrix structures, information technology, pay-for-performance) have been shown to successfully slow unsustainable growth in health care spending. This is not to imply that such efforts are of no value, but it is hard to argue that more of the same will produce different results.

Currently, it is too early to cite a model of health care TPS success,42 but substantial evidence of successful transformation in manufacturing and other service industries should capture the attention of health care leadership.1,42,56-60 There is no standard for implementing TPS principles, but there are key requirements for managing TPS-driven change.1,42,55,61,66,67 First, view people as the organization's most important resource. It is hypothesized that developing frontline problem-solving capacity will lead to receding waste. Second, emphasize process over content. Third, recognize the limitation of across-the-board programmatic change; sustainable change is a learning process that spreads unit by unit or department to department. Fourth, discard the idea of a quick fix and persist for the long term. Fifth, prepare for management roles to change from that of solution giver/strategic planner to mentor/competency developer. Line managers will become problem-solving coaches. Middle managers will support line managers by participating on cross-functional teams, developing line-manager competencies, and communicating across departmental boundaries. Upper management will provide the vision, commitment, resources, and corporate structure to remove barriers to change. Finally, remember that if upper management does not "apply to themselves what they have been encouraging their general managers to do, the whole process can break down."66 Frontline caregivers are responsible for the quality and safety of care delivery; increased attention to and support for the effectiveness of their activities is requisite for sustainable health system improvement.


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Table A-1. Salary Table

Average SalaryAverage FringeCost/Hour
RN bedside, non-ICU, ICU, emergency department, labor/delivery, PACU, operating room, outpatient27.148.14235.282
RN house supervisor, care manager36.7611.02847.788
Physical therapist29.358.80538.155
Respiratory therapist20.766.22826.988
Clinical social worker19.105.73024.830
Unit secretary/clerk13.994.19718.187
Technical—pharmacy technician10.703.21013.910
Technical—bedside patient care11.893.56715.457
Technical—phlebotomist/specimen processor10.553.16513.715
Technical—medical lab technician17.935.37923.309
Technical—radiology technician23.817.14330.953
Technical—central processing equipment tech10.463.13813.598
Technical—cardiac catheterization lab tech17.935.37923.309
Technical—surgical scrub15.364.60819.968
MD, intensive medicine90.500.00090.4962
MD, emergency department94.350.00094.3487
MD, internal medicine70.980.00070.9799
MD, hospitalist70.980.00070.9799

Note: RN = registered nurse; ICU = intensive care unit; PACU = post-anesthesia care unit; MD = medical doctor.


Table A-2. Activity Data: Percentage of Overall Observation Time (N=61): All Staff Groups and Hospitals Combined

Waste ActivityMean (5)CI -95.000% (%)CI +95.000% (%)Minimum (%)Maximum (%)Range (%)Std. Dev. (%)Standard Error (%)
Total (no breaks)100.0100.0100.0100.0100.

Note: Doc/PW = documentation and paperwork; CI = confidence interval.

Proceed to Appendix D

Page last reviewed September 2008
Internet Citation: Appendix C (continued): Cost of Poor Quality or Waste in Integrated Delivery System Settings. September 2008. Agency for Healthcare Research and Quality, Rockville, MD.