Professional Documents
Culture Documents
in Health Care
Bonnie Paris
OSF Saint Francis Medical Center
K. S. Krishnamoorthi, PhD.
Bradley University
Overview
Structure
Accessibility
•Outcomes
Process, Appropriateness, Efficiency •Effectiveness
•Satisfaction
Conformance to Standards
Conformance
– Prevention Cost
– Appraisal Cost
Non-Conformance
TOTAL
QUALITY COSTS
QUALITY
COSTS
CONFORMANCE
Low
NON-CONFORMANCE
Low High
QUALITY LEVEL
Case Studies
Emergency Department
Medication Reconciliation
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Cost of Quality
Prevention
Appraisal Cost
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Cost of Quality
Prevention Appraisal
Internal Failure Cost
4 occurrences/month
12 months/year
X $6,000 per occurrence
$288,000
Corrected Medication Errors
Number of Errors
60,000 patients per year
X 20% Error Rate
12,000 Errors
Cost to Correct
½ hr to correct
X $30/hr wage
$15/error to correct
Corrected Medication Errors
12,000 errors
X $15 labor to correct
$180,000
+ $20,000 additional med cost
$200,000
ED Internal Failure =
$488,000
$600,000
$400,000
$200,000
$0
Cost of Quality
Additional treatment
40 hour/investigation
$30 hourly rate
8 people
X 2 investigations/year
$19,200
Additional Treatment Cost
$1,2000/event
10 patients/month
X 12 months/year
$144,000
Lost Customer Cost
$1,500
Thousands
$1,000
$500
$0
Internal External
Prevention Appraisal
Failure Failure
Thousands of 9.2 17.92 488 1015.7
Dollars
Thousands of Dollars
Medication Reconciliation
Pre: No Activity
Post: Improvement Project
Pre: No Activity
Post: Monitor Compliance: $3,960
Med Rec Cost of Quality
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Pre Post
Prevention Appraisal
Med Rec Internal Failure
Pre:
60,000 patients per year
X 30% Error Rate
18,000 Errors
X $46.85/Med Rec Error
$843,300 per year
Med Rec Internal Failure
Post:
60,000 patients per year
X 5% Error Rate
3,000 Errors
X $46.85/Med Rec Error
$140,550 per year
Med Rec Cost of Quality
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
Pre Post
Activities
– Unavailable
Med Rec COQ Summary
Airborne
Vented patients are
at increased risk. GERM
SixSigma project to
Surface or Body
Substance
Contact
reduce VAP rate
RESISTANCE
Prevention Cost
Pre: No Activity
Post: Improvement Project
Post:
VAP Rate Collection &
Monitor Protocol Compliance:
$4,320
Internal Failure Cost
Post:
Avoidable treatment with
VAP rate of 4.6%: $144,000
External Failure Cost
Post:
Litigation & Settlement:
$60,000
VAP Cost of Quality Summary
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Internal External
Prevention Appraisal
Failure Failure
Pre $0 $2,160 $208,000 $300,000
Post $25,500 $4,320 $144,000 $60,000
COQ Pre = $330,160
COQ Post = $229,820 $3.2 million improvement
Summary
Biographical Sketch
Bonnie Paris holds a masters degree in Industrial
Engineering from Bradley University and has been
involved in process improvement efforts at OSF Saint
Francis Medical Center in Peoria, Illinois, for over 8 years.
Dr. K. S. Krishnamoorthi is a professor of Industrial
Engineering at Bradley University and is a fellow in the
American Society for Quality.