Baldrige Recipient Faces Controversy

One of the three recipients of the 2006 Malcolm Baldrige National Quality Award is stirring up controversy due to its business practices and its CEO’s seat on the Baldrige Foundation’s board of directors.

Premier Inc., which received a Baldrige award in the service category, has taken financial kickbacks from big medical devices manufacturers for several years. While these payments are legal, some small device companies say they unfairly suppress competition. These critics also point to Premier CEO Richard Norling’s position with the Baldrige Foundation, which raises private money for the award, as a possible conflict of interest.

USA Today reported on the controversy following the announcement of award recipients in November.

San Diego based Premier is a group purchasing organization (GPO), meaning it signs contracts with large manufacturers and connects these suppliers with customers. In 2006, more than 1,500 hospitals and 42,000 doctors, pharmacies and other healthcare providers bought $27 billion of medical supplies and services through Premier’s group contracts.

The goal of a GPO is volume discounts, and Congress granted GPOs an antitrust exemption in 1986 that allows them to legally accept money from large suppliers in exchange for business. The congressional exemption was intended to help hospitals save money, but critics say it has damaged business for small suppliers.

Mark Leahy, executive director of the Medical Device Manufacturers Assn., says the exemption has created a purchasing alliance influenced by big suppliers that keeps innovative products off the market. Leahy’s organization represents smaller companies that are trying to get the exemption repealed.

Meanwhile, four medical device companies have sued Premier, claiming anti-competitive practices. Premier reached settlements with three of them, and Hunter Kome, VP of Communications at Premier, says the organization anticipates settling the fourth one soon.

“The settlements are business decisions and carry no acknowledgement of liability,” Kome says. “We evaluate the expense of ongoing legal fees versus the cost of settlement and make decisions accordingly.”

“Unfortunately, litigation is a fact of life for U.S. corporations,” he adds.

The most recent settlement was reached on Nov. 20—one day before the Baldrige award recipients were announced—when Premier agreed to pay $8.8 million to catheter maker Rochester Medical.

A Senate antitrust subcommittee has been investigating GPOs since 2002, but Premier’s practices have not changed in that time, Thomas Shaw, CEO of Retractable Technologies, told USA Today. Retractable Technologies received a $55 million settlement from Premier in 2003.

Shaw said he also believes Norling’s position on the board of directors of the Baldrige Foundation influenced the organization’s win. “I was shocked and horrified,” he told USA Today. “If it was a prestigious award, it no longer is.”

Blair Childs, Premier’s senior VP of public affairs, told the newspaper that Norling offered to resign from the Baldrige board when he learned Premier was in the running for the award. Harry Hertz, director of the Baldrige National Quality Program, said there was no need for Norling to resign because the board members and contributors to the foundation have no influence over who receives the award.

Kome points out that such a situation is not a first. A recent example is Texas Nameplate, which received a Baldrige award in 2004, when Dale Crownover, a senior manager at Texas Nameplate, also served on the Baldrige Foundation board.

The National Institute of Standards and Technology (NIST), which manages the Baldrige program, says these circumstances do not effect the Baldrige award selection process. “We ... firmly believe the process for selecting Baldrige award recipients is free of conflicts of interest and that all of the organizations named as 2006 Baldrige Award recipients earned and deserve the award,” NIST said in a statement.

The statement went on to note Baldrige recipients “ultimately receive about 1,000 hours of scrutiny from Baldrige examiners and judges … Members of the board for the Baldrige Foundation do not participate in the selection of winners in any way.”

NIST is an agency of the U.S. Commerce Department. ASQ is a sponsor of the Baldrige program and provides administrative support.


IHI Ups the Ante In Preventing Medical Errors

The Institute for Healthcare Improvement (IHI) has launched a new campaign to reduce medical errors, eclipsing the goals of its previous efforts. The 5 Million Lives Campaign will ask hospitals to protect patients from 5 million incidents of medical harm over two years, ending Dec. 9, 2008.

The new campaign—which is sponsored principally by U.S. Blue Cross and Blue Shield health plans—builds on the success of the 18-month 100,000 Lives Campaign. In that effort, 3,100 participating hospitals reduced inpatient deaths by an estimated 122,000 through implementing six IHI recommendations.

The 5 Million Lives Campaign aims to enroll 4,000 hospitals and promotes the adoption of six new improvements in addition to the six that were included in the 100,000 Lives Campaign. To see the measures, go to www.ihi.org.

IHI estimates 15 million incidents of medical harm occur in U.S. hospitals each year—or 40,000 every day. IHI defines “medical harm” as unintended physical injury resulting from or contributed to by medical care (including the absence of indicated medical treatment) that requires additional monitoring, treatment or hospitalization, or results in death.

There is no cost for hospitals to join the 5 Million Lives Campaign, though participating hospitals are required to adopt at least one intervention and regularly report hospital profile and mortality data to the IHI.

Who’s Who in Q

Name: Felicia L. Reed.

Residence: Upper Marlboro, MD.

Education: Enrolled in the University of Phoenix’s online e-business/business to business degree program.

First job in/related to quality: Business systems analyst for Ingenium Corp. in Upper Marlboro.

Current job: Director of quality for Harte-Hanks Inc. in Glen Burie, MD, where she focuses on ensuring excellence in the company’s delivery of data services to clients in multiple markets.

ASQ activities: Senior member.

Other activities: Founder of Kids Getting Out, a nonprofit organization that uses the plan-do-check-act (PDCA) cycle to organize educational activities for children.

Recent Honor: Appointed by Maryland’s state senators and the University of Maryland to the 2006 Maryland Performance Excellence Awards’ Board of Examiners to critique companies against the Baldrige criteria.

Personal: One son.

Favorite ways to relax: Nature walks, reading, helping others and meditating in the presence of peace and quiet, which, she admits, is rare.

Quality quote: Quality matters. By sharing PDCA and other simple quality concepts with others in our professions and personal lives, we can improve both and make a difference. The information quality professional possess is more priceless if it is shared with others.


New Keynote Speaker Announced for World Conference

Adam Kahane has been added to the list of keynote speakers for the 2007 World Conference on Quality Improvement, April 30-May 2 in Orlando, FL.

Kahane is the author of Solving Tough Problems: An Open Way of Talking, Listening and Creating New Realities (Berrett-Koehler, 2004). During the early 1990s, he was head of social, political, economic and technological scenarios for Royal Dutch/Shell in London.

Kahane has also worked for Pacific Gas and Electric Co. in San Francisco, the Organisation for Economic Cooperation and Development in Paris, the International In?te for Applied Systems Analysis in Vienna, Austria, and the Institute for Energy Economics in Tokyo.

Former Secretary of Health and Human Services Donna Shalala and author Jim Carroll are also scheduled to be keynote speakers.

For more information, go to http://wcqi.asq.org.


Matsushita Mass-Producing Heat Resistant Batteries

Japanese electronics maker Matsushita has begun mass production of a new lithium-ion battery it says is safe from the overheating problems that have recently plagued laptop computers.

Matsushita, the parent company of Panasonic, says it will produce 5 million units of the new batteries per month. The company was making 100,000 a month when the batteries were first introduced last April.

The battery features a heat resistant metal oxide layer on the surface, which the company says will prevent overheating.

The announcement follows a series of incidents in which laptop batteries have overheated or caught fire. Sony had to recall millions of battery packs it sold to computer makers, affecting Dell and Apple, among others.

The liquid inside laptop batteries can sometimes contain microscopic pieces of pure lithium, a highly reactive metal. When one of these particles punctures the separator between the anode and cathode inside the battery, it can cause a short circuit that increases both heat and pressure in the battery, which Sony blamed for some of the problems with its batteries.


Studies Explore Quality Indicators in Hospitals

A study by Harvard Medical School researchers says having a high number of registered nurses, using technology and nonprofit status of a hospital are key determinants of quality of care.

The results of the study, which appeared in a recent issue of Archives of Internal Medicine, say hospitals with those characteristics provided better care to patients with congestive heart failure, heart attack and pneumonia based on 10 performance measures. The study was based on nationwide data from 4,000 hospitals collected by accrediting organizations and the Centers for Medicare & Medicaid Services (CMS).

In a separate study, researchers at the University of Pennsylvania School of Medicine found hospitals with high and low performance on Medicare quality measures had little difference in the rate of death for three common conditions, indicating that the performance measures might not accurately reflect patient outcomes.

Rachel M. Werner and Eric Bradlow report their findings in a recent issue of the Journal of the American Medical Asso-ciation.

The researchers analyzed 2004 data from CMS’s Hospital Compare website and compared hospital performance for heart attack, heart failure and pneumonia with hospital risk adjusted death rates, which were measured using Medicare Part A claims data.

Across all heart attack performance measures, the absolute reduction in risk-adjusted death rates between hospitals performing in Hospital Compare’s 25th percentile versus those in the 75th percentile was 0.005 for inpatient death, 0.006 for 30-day death and 0.012 for death at one year. For the heart failure performance measures, the absolute death reduction was smaller, ranging from 0.001 for inpatient death to 0.002 for one-year death. For the pneumonia performance measures, the absolute reduction in death ranged from 0.001 for 30-day death to 0.005 for inpatient death.

Werner and Bradlow conclude that because the differences are so small, it is unlikely quality data such as those reported on Hospital Compare are useful to patients.

“But evaluating hospitals is clearly a good idea and Hospital Compare is an important start,” Werner says. With time, the system will get better, he adds. But in the meantime, effort should be focused on developing new measures that are more tightly linked to the clinical outcomes patients care about.

Short Runs

THE CENTER FOR STUDYING HEALTH SYSTEM CHANGE says deteriorating relations between hospitals and physicians are imperiling a range of healthcare objectives. These include adopting IT and implementing pay-for-performance programs. The findings are discussed in an article titled “Hospital-Physician Relations: Cooperation, Competition or Separation?” The article is available at www.hschange.org/CONTENT/902 (case sensitive).

THE QUALITY FUNCTION DEPLOYMENT INSTITUTE has issued a call for papers for its international symposium Sept. 1-6 in Williamsburg, VA. Those interested must submit paper proposals by March 10, and acceptances will be issued through the end of March. Final papers are due May 5. For details, go to www.qfdi.org/call_for_papers.htm.

THE NATIONAL QUALITY FORUM (NQF) is endorsing additional national voluntary consensus standards for ambulatory care. The introduction of the 49 consensus standards bring to 86 the total number of NQF-endorsed voluntary consensus standards for ambulatory, or outpatient, care. To see the newly endorsed measures, go to www.qualityforum.org.

THE INTERNATIONAL ORGANIZATION FOR STANDARDIZATION has launched an award to recognize higher education institutions for successfully implementing programs that use standardization as a tool to access world markets, transfer technology, and promote good business practices and sustainable development. The Japanese Industrial Standards Committee is cosponsoring the award. For more information, go to www.iso.ch/iso/en/commcentre/pressreleases/2006/Ref1040.html (case sensitive).

PHYSICIANS WHO REPORT ON QUALITY MEASURES will be eligible for a 1.5% incentive payment beginning in July 2007 because of legislation passed by Congress in December. Eventually, a portion of physicians’ pay is slated to be based on their performance scores related to pre-set quality measures. Such programs have been part of the private sector for years and have long been called for by the Bush administration. Critics say the legislation could be expensive, ultimately do little to improve quality or efficiency of care, and place dangerous restrictions on the way doctors practice medicine.


Two New Supply Chain Certifications Offered

Two organizations have announced programs to train and certify supply chain professionals.

The Supply-Chain Council (SCC) has added six new courses and a series of webinars in conjunction with a certification program. SCC is the owner of the SCC reference models, including the DCOR model for design, CCOR for improving customer interaction, and SCOR for supply chain modeling and business results.

More information and registration for the new SCC courses is available at www.supply-chain.org. More information on the webinars can be found at www.supplychain.org/cs/sccwebseminars.

Another organization, the Institute for Supply Management (ISM), has announced details of its new certified professional in supply management (CPSM) qualification. Criteria for the certification include a bachelor’s degree from a regionally accredited educational institution and at least five years of professional supply management experience.

Individuals with the requisite bachelor’s degree who already hold ISM’s certified purchasing manager designation might be eligible to take a bridge exam to achieve the new CPSM.

For more information, go to www.ism.ws and select Professional Credentials.


Board of Directors Names New Fellows

 ASQ’s board of directors has awarded fellow status to 17 members late last year.

According to ASQ bylaws, fellow membership may be awarded to a member who has 15 years of quality related experience, meets minimum score requirements across six professional categories, is sponsored by peers and endorsed by his or her ASQ section or division, and has been a senior member for five years or longer.

The 2006 fellows are Thomas Andrew Britt, Lev M. Klyatis, Ramesh Konda, Edwin G. Landauer, William A. Levinson, Sandford Liebesman, David A. Manalan, William Q. Meeker Jr., Joseph J. Pignatiello Jr., Sheila R. Poling, Gordon A. Skattum, Jim L. Smith, Larry R. Smith, Manly P. Thornton, Aaron W.K. Tong, Willy W. Vandenbrande and Jeffrey C. Worthington.

For more information on the new fellows, go to www.asq.org/media-room/news/2006/12/20061211-fellows.html.

ASQ News

HEALTHCARE CONFERENCE TO RUN WITH WORLD CONFERENCE The fourth annual Quality Institute for Healthcare (QIHC) will be run for the first time in conjunction with the World Conference on Quality Improvement, April 30-May 2 in Orlando, FL. Those who want to register for the QIHC must register for the World Conference and pay the additional fee for the QIHC. They will have access to all World Conference events plus the QIHC workshops. According to Ray Zielke, ASQ’s healthcare market manager, the goal is to expose more healthcare quality practitioners to broader quality topics. For information and to register, go to http://qihc.asq.org.

LEADERSHIP DIALOGUE SESSION COMING UP The Government Division will hold a session in its Leadership Dialogue series following the World Confer-ence on Quality and Improvement. The session, which will focus on performance measurement and management in the public sector, is scheduled for Thursday, May 3. Confirmed speakers include Brian Marson of the Treasury Board Secretariat of the Government of Canada and Dale Weeks of the Florida Department of Revenue. For more information about the Government Division, go to www.asq.org/gov.

FORUM NAME CHANGE APPROVED The ASQ board of directors has approved the Teamwork & Participation Forum’s request for a name change. The forum’s new name is the Team & Workplace Excellence Forum. The new name reflects the forum’s new vision and mission. Plans are underway to update existing material and websites to reflect the new name. For more information, go to www.asq.org/teamwork.

ASQ RECEIVES STATE QUALITY AWARD ASQ headquarters in Milwaukee has been recognized at the mastery level in the 2006 Wisconsin Forward Award program. The award is based on the Malcolm Baldrige National Quality Award. Mastery is the second highest of four possible levels. For more information, go to www.forwardaward.org.

TWO NEW ORGANIZATIONAL MEMBERS JOIN ASQ has added two new organizational members. Raytheon, the military contractor based in Waltham, MA, and Cummins, the engine maker headquartered in Columbus, IN, became members in January. This brings the total number of organizational members to 10. For more information, go to www.asq.org/membership/organizations/organizations.html.

EDUCATION SUMMIT EXPANDED This year’s Edu-cation Leadership Summit for Superintendents will be June 18-19 in Denver. For the first time, superintendents can bring their leadership teams or cabinet members. In the past, attendance has been limited to superintendents and one key staff member. For more information, go to www.asq.org/conferences/education-summit.

TEAM EXCELLENCE AWARD NETWORK LAUNCHED The International Team Excellence Award (ITEA) program has launched an online network at www.asq.org/communities/itea. The network, open to members and nonmembers, features input from previous ITEA winners and is intended to help organizations that plan to enter the competition. The ITEA competition has taken place at the World Conference for Quality Improvement every year since 1985.

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