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Cut Costs, But Not Quality? One IHI Faculty Member Explains How It Can Be Done

By Frank Federico | Tuesday, January 28, 2014


The following is an interview with Lucy Savitz, PhD, MBA, Director of Research and Education, Intermountain Health Care, Institute for Health Care Delivery Research, Salt Lake City, Utah. She is at the forefront of cost, quality, and value work — an area of intense interest for health care leaders in the face of deep and painful budget cuts. She is also a faculty member on the IHI seminar From the Bedside to the Balance Sheet: Using Cost Constraints to Drive Quality.

Q: What is the biggest misconception about balancing quality improvement with cost reduction?

A: Most of us come to improving quality and reducing cost from two completely different disciplinary perspectives, and the people who work in those disciplines are siloed within our organizations. So, the misconception is that people don’t have the capacity to work together. In fact, they haven’t worked together just because they have been unilaterally separated within our organizations. I think the work from the Institute for Healthcare Improvement (IHI) has really created a forum to bring people together in a meaningful way so that we can simultaneously reduce costs while we are improving quality. 

Q: What are the keys to success for improving quality while controlling costs?

A: I think a key success factor is being open-minded to other disciplinary perspectives and having the appreciation that we speak a different language. When you think about the language of finance, it is very different from the language of clinical care. We also have these misconceptions — particularly if you are in a clinical setting — you think, “The people who work in finance are just about cutting my budget and deteriorating patient care.” Actually, we all come to patient care because we care about patients — whether you work in housekeeping, or in finance, or in a delivery care setting. I think having that established trust and the perception that we are all in it together is one of the biggest ways we can move this work forward. 

Q: Who are the external partners outside the hospital who can best help address efforts to improve quality while reducing costs? 

A: If we start to think about how we deliver care, the conditions that our patients present with are the same ones they leave with when they leave the clinic or the hospital. They live in our communities, and what we have not done well in health care is to think about who are those community partners that can help support our patients in their day-to-day activities. Because ultimately what we want is wellness. We want people to be healthy — we are not looking to turn them into patients. When we think very broadly, it is going to really depend on the community you live in. 

I have done a lot of work across the United States. In the southern United States, as I learned when I was based in North Carolina, working through the churches was really important. There were pastoral care nurses. If you work in largely Hispanic communities, promotoras — or lay health workers — are really important contributors from the community. When we think about just really basic kinds of health care to prevent complex chronic illness like diabetes or heart failure, it’s about working with parks and recreation in a community so that you have continuous walking trails for people to walk on safely at night or leave the lights on in the playing field so that people can play soccer at night. All of those community elements have not really been marshalled in the way that is going to be important as we move forward from a population health perspective. 

Q: Why is it so essential in health care to simultaneously focus on quality improvement while working on cost reduction?

A: So the Holy Grail in health care is really, “How do I reduce costs while I at least maintain or improve quality of care?” And people always ask this question: “How do we do both, and why is it important to do both?” It is important to do both because we need to survive as a health care delivery system. From all of the efforts we put in place to keep our population healthy, keep them out of the emergency room, and keep them out of the hospital, there will always be a need for health care delivery. We live in a political reality where hospital payments are being cut, physician payments are being cut, so we have to look at our cost structures and think about how do we do it more economically. 

I have been in health care for over 30 years, and when you have seen the draconian, across-the-board cuts where we are really cutting into patient care and harming patients, we all know that’s not the right thing to do. The challenge is how we get at this Holy Grail so that we can cut costs in a way that doesn’t harm the care that we are giving to our patients. It is possible and it is largely possible through basic principles taught by Deming and others, largely around reducing the variation in the processes of care delivery.

Q:  What is the best way to link finance and quality together to improve quality while reducing cost?

A: I believe that the real way to do that is to think about how we build the infrastructure within our organizations so that instead of siloing those activities, there are ways in which we build teams. And whether or not we decide a project of a certain size requires a SWAT team, if you will, where you might have a quality improvement expert of some ilk, like somebody who is a black belt in Six Sigma or a TPS lean person who has already partnered with a finance person. They have likely established a common language, and they understand what the strategic goals of the organization. That probably hits at a much higher level, but at a lower level in an organization we need to give everybody the tools and concepts so they understand that for health care, we need to be able to have the money to turn the lights on. So it is not just about cost cutting for the sake of cost cutting. It is, “How do we provide the services we intend to provide in the highest quality manner, and get the right care to the right patient at the right time?” So then it becomes everybody’s job to think about, “How can I be more efficient?” It’s everybody’s job to think about, “How can I do my job better and provide the best possible care to the patients?”

Q: What is the first thing you would tell today’s health care leaders in order to prepare for tomorrow’s health care environment?

A: When I reflect back on my career, one of the biggest problems I see among people who have worked in health care for a long time is you tend to get very myopic and think, “This is the way it has always been done.” And I think bringing young people on board who aren’t afraid to ask different kinds of questions can help. I am very, very excited about a lot of the innovation that is taking place where we are bringing people in from art schools and engineering schools, people from very different disciplines. The president and CEO of IHI, Maureen Bisognano, has gone around to different industries to try and harvest best practices so that we can infuse that learning and that knowledge and that zeal for thinking about things differently. I think this is the way that we are going to prepare for the future.

There is no way to say what is health care going to be like in the future. We have got a lot of regulations, and it takes a long time to sort of move those boundaries or parameters out of the way so that we can do the right thing, so that we can utilize technology differently, but the accelerated rate of innovation makes it very difficult to see the future.  What we can do is to learn to be flexible and learn to think outside the box so that we are prepared to experiment in a systematic way and so that we know that we are not harming our patients but that we are moving forward constantly. 

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