Tuesday, March 2, 2010

The New Quality- Cost Imperative

As we wait for some resolution on the latest battles surrounding healthcare reform, we are reminded of the unprecedented challenges that healthcare leaders face providing high quality care under growing financial constraints. The latest issue of "Healthcare Executive" published by the American College of Healthcare Executives leads with the cover story on the new quality-cost imperative. But at least the argument is framed correctly; quality first and finances follow.

System wide improvements can indeed provide significant financial gains. There is a new call to provide value in healthcare. For many hospitals this is a necessary strategy for maintaining even short term viability. For all of us this is necessary to maintain long term viability of our healthcare delivery system. Tackling costs alone without addressing quality has proven to be both short term and largely ineffective. While addressing quality improvement at any cost has also shown to pay diminishing returns. Addressing both is the only formula for sustained success.

According to Stephen R. Mayfield, a senior vice president for the American Hospital Association, hospitals are now focusing on cost management rather than the revenue growth model of the last two decades. I say why not focus on both by starting with the quality issue first. We have found in our experience when working with hospitals that by addressing quality, service and efficiency issues, the growth in business comes almost automatically. Every project we have been involved with, whether it be ED, OR or Inpatient throughput has resulted in a growth in business after the operational improvements have been made.

So we all must deal with the call for improved value in healthcare. The inefficient hospital and the low quality provider will not survive. Maybe this is not all bad. The field today for healthcare leaders has never been more challenging, but I think we are up for the challenge. We have the opportunity to shape a stronger system for the future. One that is led by quality followed by efficiency providing a new level of value to patients.

More on this later.

Mark Brodeur

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