Cost of Poor Quality or Waste in Integrated Delivery System Settings

Final Contract Report

The primary purpose of this IDSRN project was to collaboratively build a system that could be actively used to identify the costs of poor quality or waste in an effort to identify opportunities for improvement in hospital settings. The proposed identification strategy has been designed from a financial management perspective, recognizing that we are in the business of providing high-quality medical care.

Prepared for the Agency for Healthcare Research and Quality (AHRQ) under Contract No. 290-00-0018. 

Contents

Section 1. Overview and Background
   1.1. Overview
   1.2. Background
Section 2. Aims, Existing Constructs, and Organizing Framework
   2.1. Aims
   2.2. Overview of Existing Quality Constructs for Waste/Poor Quality
   2.3. Planned Approach for Identifying a Typology of Waste/ Inefficiency
   2.4. Selected Framework for Considering Cost of Waste/ Poor Quality
   2.5. Financial Reimbursement Influences on Capturing Waste/ Inefficiency
   2.5.1. Increases in Waste that Enhance Health Care Providers' Profits (Unit Costs versus Frequency)
   2.5.2. Reductions in Waste that Damage Health Care Providers' Bottom-Line Financial Performance
   2.5.3. Intermediate Financial Conclusions that Affect Waste Estimation and Reduction
Section 3. Examining Waste/Poor Quality
   3.1. Estimating Waste at the Population Level—the Dartmouth Atlas
   3.2. Estimating Waste at the Microsystem/Episode Level—Quality Improvement Analysis
   3.3. Estimating Waste at the Patient Care Level—TPS and Lean Analysis
   3.4. Conclusions
Section 4. Recommendations for Next Steps
   4.1. Population Level
   4.2. Episode Level
   4.3. Patient Level
   4.4. Moving Towards an Overall Estimate of Waste in Health Care
Section 5. References
Appendixes
Appendix A: Quality and Inefficiency Waste in the Peer-Reviewed Medical Literature
Appendix B: Excess Cost and Length of Stay Associated with Voluntary Event Reports in Hospitals
Appendix C: Estimating Waste in Frontline Health Care Worker Activities
Appendix D: TPS Tools for Structured Observation