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Tuesday, March 6, 2012

Quality, Cost and Pay-for-Performance

I was reading an article in the Ottawa Citizen newspaper today about the challenges that are coming to Canada’s largest province with respect to health care funding.  Money is running out, new funding formulae are being put into place with a very prominent role for “pay-for-performance”.  For those that don’t know the term it means that those organizations that demonstrate themselves to be more productive and more effective get more funding and support than those that continue to be less productive and less effective.

For everyone and anyone interested in Quality and Cost both inside and outside the laboratory your moment has arrived.  Those that let this slide by are missing out the opportunity to shine the light on Costs of Poor Quality and to point out how many unbudgeted dollars can be recovered.

A few thoughts. 

  • We know there are many errors that occur on a regular basis, more of them seemingly trivial and without consequence but some that lead to inconvenience and other that go very far bad.  The problem is that we don’t know which is which in the beginning so all of them had to be addressed.  That results in significant TEEM costs.  Data entry errors consume about 30 minutes to fix. Analyzer errors consume 100s of hours.  On average errors cost 130 minutes per, and can impact 10-30% for staff.  In a large laboratory with 200 employees that can represent 20 salaries every day, all of which is non-budgeted time loss.  Even a  modest reduction in error can reduce consumption of wasted dollars.  Adding a quality team that can focus on error reduction will pay for itself through savings accrued.


  • We know that even appropriate clinical requests lose their value when they are collected at the wrong time and in the wrong way.  Many result in errant or uninterpretable or worse wrongly interpreted results.  The more tests that get ordered, the worse it gets because ordering more just makes more people busier and busier people make more shortcuts and more mistakes.  Quality teams can fix this too.  A few years ago when the topic of clinical technologist positions arose it was seen as a luxury; unlikely to have the same impact as clinical pharmacists who roamed the wards reviewing pharmacy orders before they got filled.   But if a clinical technologist program prevented only 4 or 5 errors per day, they would pay for themselves through reduced time requirements.  Changing a technologists work function from front-line bench to front-line ward would add variety to their position, and may even help clinical staff and patients better understand the subtleties of test results.  I know the wards will be filled with moans and groans and grief.  “That’s a REALLY bad idea because that’s not their job or their knowledge and they are intruding on our domain”.   That’s what they said about clinical pharmacists too, and the clinical pharmacists proved to be a pretty valuable asset.

  • And here is a third idea.  I raise this with caution, but I am pretty confident that I am right.  Time to review and rethink regulations that add to cost but addresses only theoretical risk.  We have introduced so many requirements that are based on ZERO tolerance for risk, when most in our society acknowledge that some level of risk is OK.  I will give two examples that we should emulate.  In Canada, we allow transport of samples such as stool for occult blood to be transported without being considered as dangerous goods, even though it might contain Salmonella or C. difficile.  Similarly we are comfortable with the notion that if we don’t know that a blood sample contains HIV or Hepatitis B, then it probably does not.  These are good examples of recognizing and tolerating a level of  acceptable risk.  So if that is OK, and I support Transport Canada’s level of administrative bravery on that level, why do we then put huge financial burdens on other situations when true risk is even lower.  How much could our society save if we predicated decisions on rational risk as opposed to theoretical risk.  Examples of sending isolates from one laboratory to another for better identification, or sending blood samples for Syphilis serology represent the same level of trivial risk but result in Dangerous Goods charges.  Or the transport of Quality Assurance materials.  I suspect with a moments thought, you can probably come up with a whole slew of other regulations that make little sense, but cost many dollars. 

So here is my bottom line.  Health is a massive bundle of costs, with far too much waste.  It is not longer appropriate or acceptable to make decisions on “well what you want for your grandmother” or “to hell with cost…my job is to cover my backside.” The opportunities in reducing costs through actively addressing the costs of poor quality and poor decision making are too great to be ignored.

Bob Dylan said “the times they are a’changing”.  Here’s hoping he was right on for right now.

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