Don’t ignore the costs for quality resources
Don’t forget to address financial implications
When you submit quality reports to hospital administrators, do you gloss over cost and financial issues or address them head-on? This could be a powerful tool to obtain additional resources for data analysis activities or corrective actions, says Judy Homa-Lowry, RN, MS, CPHQ, president of Homa-Lowry Healthcare Consulting based in Metamora, MI.
"Many quality professions don’t give any thought in advance to how much it will cost to implement some of the corrective changes they are proposing," she says.
This is key to justifying investments to top leadership and the hospital board, such as clearly explaining how much an educational program will cost and what the expected benefits and outcomes will be.
"If you think you’re going to change behavior based only on education — well, who are you targeting, and how will you measure the success?" Homa-Lowry asks.
If you have identified deficiencies through your own self-assessment processes while completing your organization’s periodic performance review, you’ll need to demonstrate evidence of standards compliance and measures of success. That means you’ll need to be as specific as possible. "You need to give some thought about how much time is needed, who needs to be involved, and the costs involved," she says.
Be up front about costs
Avoid making blanket statements such as "continuing to monitor," without including specifics about what it will cost to do this, which may include a failure mode and effect analysis (FMEA), having teams meet on an ongoing basis, going through committees for approval, and implementation.
"Leadership really needs to have knowledge and input on that, because plenty of resources are going to be spent," Homa-Lowry says. "When it gets down to what we will actually implement to effectively resolve these issues, we are often not real specific as to how we will accomplish that and what the cost is."
Hospital administrators are used to getting proposals that include projected costs for needed resources, she emphasizes.
"But when quality improvement issues come up, we don’t always give leaders a good understanding of the cost and rationale and reasons why we need the resources," Homa-Lowry says. "If the investment is made, how is this really going to improve things?"
Your proposals must address the financial ramifications of the corrective actions you’re proposing, she notes.
"Leaders need to understand not only the accountability but also the resources to accomplish it so they can make good decisions when these reports come back to them for action," Homa-Lowry points out. "They may say, We’ve invested all these dollars in all these review activities, but are we really getting what we expected from our investment?’"
Leaders need to be given the chance to evaluate operationally what it will cost to implement actions.
"Often, reports are really not specific enough to provide leaders a thorough understanding so they can allocate the resources, or if necessary, take it to the board," she continues.
For example, administrators will need more than just a raw number of patient falls to invest resources in a falls prevention program. They’ll want to know the evidence that shows that implementation of a falls risk assessment will actually decrease falls and the cost per patient.
"So you are really doing a cost-benefit analysis in terms of thinking through your corrective actions and presenting them to leadership, so they can make decisions about resources and support," Homa-Lowry notes. "You see a fair amount of soft-pedaling where people don’t necessarily present that information. But that’s what is really going to pique the interest of the chief financial officer and board of trustees."
Your quality reports should be action-oriented and contain specific recommendations for leadership to consider.
"It’s hard to make a decision if you don’t have all the facts," she says. "Otherwise, leaders will tell you, It sounds nice to do this, but where are the facts as to why I should invest the resources?’"
Steps for incorporating financial aspects
To incorporate financial considerations in your quality reports, do the following:
• Include a specific work plan.
Many performance improvement reports or corrective action plans include vague statements such as "continue to monitor," "write a new policy or procedure," or "provide staff education," but lack practical details for how these things are going to be achieved. "Rarely in those corrective actions do you see where it’s been clearly put into place as a work plan," Homa-Lowry says.
When you propose a corrective action plan, list exactly who is responsible, how long it will take, and what the cost will be. Quality reports also should include the specific measures that are going to help leadership measure the effectiveness of the strategic plan for the organization, she adds.
• Do an FMEA on the front end.
Some organizations still are not doing an FMEA to make sure what they are proposing actually is addressing the identified issues and is workable, Homa-Lowry explains.
"They may be meeting in groups to put together a work plan and then putting it out there as a pilot," she continues. "When it doesn’t work, then they have to do plenty of reworking, which gets expensive."
Thorough planning is needed to be sure that your proposal is viable for your organization. "Decide on the front end what you are expecting, instead of finding out at the end, so you don’t end up doing additional work to find the issue as well as the solution," Homa-Lowry advises.
• Don’t overlook input from staff.
"Sometimes, the quality professionals get so wrapped up in planning that they don’t include the line staff who will be dealing with the issue day in and day out. Those are the individuals who can evaluate whether or not they think the solution is going to work," she says. This approach also fosters staff’s ownership and acceptance of the new or revised process. It also may help to reduce work arounds.
Sometimes, strategic plans are written at a very high level and may not be meaningful to a staff nurse or unit manager, Homa-Lowry notes. "Resource utilization is a common example — what does that really mean to them, to the person on the unit, so they can become involved in the solutions?"
Your strategic plan objectives should be further expanded, so staff at the managerial level as well as frontline staff understand their specific responsibilities in meeting the objectives, she says.
"Meeting their objectives, derived from the strategic plan objectives, is critical to implementing the actions that will ultimately meet the strategic objectives for the organization," Homa-Lowry explains.
If staff haven’t been given the chance to give input for process changes, they likely will start finding ways to work around the problems they encounter. "That will further increase the cost of things and can be expensive in terms of variation of care," she says.
• Continually examine your processes.
The bottom line is that as your organization moves into continuous readiness, you need to take a close look at systems and processes and revise them on an ongoing basis, Homa-Lowry notes.
"It may be more difficult to implement this on the front end, but it will cost less in the long term. And you will be able to quantify results since it will be done appropriately," she says. "Otherwise, you may be doing plenty of activities without seeing results, which is very expensive."
• Know how to obtain financial data.
Quality professionals often are not aware of all the data that they have available through the hospital’s marketing department as well as existing databases, Homa-Lowry explains.
As a quality manager, you should meet with your organization’s chief financial officer and the head of information technology to see what information can be accessed, she suggests.
"It will be necessary for the quality management professionals to do some independent calculations concerning cost, along with the data supplied by the organization," Homa-Lowry says.
For example, to calculate some of the costs to justify an education program that would reduce hospital-acquired infection rates, you’ll need to find out the number and cost of nosocomial infections in your organization, to present different types of financial data such as the cost of doing a root-cause analysis and/or FMEA for a patient with a nosocomial infection and additional data showing how much it costs to manage a patient with a nosocomial infection.
• Share quality data with your vice president of operations.
Performance data should be shared with the organization’s vice president of operations, and this individual should be included in the development of the corrective action plans, she advises.
"That isn’t happening in many organizations, but it will be critical for ongoing preparedness," Homa-Lowry says.
Operations people can help you determine costs involved in corrective actions, whereas quality leaders can inform the operations side about clinical issues involved in making systems changes work effectively, she explains.
• Use reliable tools for data analysis.
If the computerized systems you are using aren’t giving you reliable results due to faulty data collection techniques or problems with the way data are being put into the system, you may be unsure as to how to produce the most credible information, Homa-Lowry adds.
"But by the same token, if you aren’t using the data that are already available and you aren’t doing analysis because people are not comfortable with using the statistical tools you have available, then again, the results will be questionable," she adds. "Every time somebody picks up a medical record and re-reviews, it can be very costly."
[For more information on financial aspects of quality reports, contact:
- Judy Homa-Lowry, RN, MS, CPHQ, President, Homa-Lowry Healthcare Consulting, 560 W. Sutton Road, Metamora, MI 48455. Phone: (810) 245-1535. Fax: (810) 245-1545. E-mail: [email protected].]
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