Healthy savings

In response to the interview that appeared in the June 2009 issue of QP ("In a Perfect World"), I believe former U.S. Treasury Secretary Paul O’Neill is right on target about the improvement opportunities in the healthcare industry.

The $1 trillion of waste in our healthcare system to which O’Neill refers can be attributed to data reported in a recent study by the New England Healthcare Institute. The research organization identified four major categories of waste that should be the targets for improvement efforts:

  1. Wide variations in patterns of care. A lack of physician adherence to clinical practice guidelines results in huge variations in patterns of medical care across the United States. Potential annual savings: $600 billion.
  2. Medical mistakes. These errors include surgery on the wrong organ, preventable medication errors or avoidable infections acquired in the hospital. Potential annual savings: $52.2 billion
  3. Study: Overuse of hospital emergency departments for non-urgent care. Potential annual savings: $32 billion.
  4. Underuse of drugs and other therapies. Potential annual savings: $5.5 billion.

O’Neill’s track record at the Pittsburgh Regional Health Initiative (PRHI) is proof positive that dramatic improvements in healthcare quality and significant cost reductions are not mutually exclusive.

What is equally remarkable is that the improvements were achieved without high-paid consultants, significant investment of capital, regulatory reform, new legislation or big committees. I often refer to PRHI’s accomplishments during the Six Sigma certification classes I teach at Emory University in Atlanta.

President Barack Obama should indeed raise the stakes for healthcare by challenging all key stakeholders to the kind of savings O’Neill espouses. As a quality professional, I would be glad to volunteer my time to such a noteworthy cause.

Peter J. Sherman
Associate director, AT&T
Lead instructor, Emory University Six Sigma Program

Managing metrics

In his article in the June edition of QP ("Pyramid Power"), Todd Creasy presented a different and useful perspective on the use of metrics to drive change.

Although many organizations resist the metrics dashboard, perhaps this perspective will encourage more use of metrics, which is commendable. By drawing a connection between foundational metrics and the capstone metric appropriately, Creasy enabled all levels of an organization to consider the business priorities and to focus on them.

People do not like metrics because they feel they cannot control them. What they fail to understand is that metrics require rigorous management to fully understand their value. Only then will anyone in the organization feel comfortable using them.

Likewise, management needs a set of tools to improve processes. Lean Six Sigma, 6TOC or any other approach must be understood, mastered and appropriately applied to the situation to get the most out of them.

Randall Johns
Vice president, Juran Institute
Stafford, VA

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