Cost ‘vs’ Quality Debra Padgett FIBMS Pathology Quality Manager North Cumbria University Hospitals NHS Trust

 ‘Quality’ = ‘Fitness for Purpose’  ‘Quality’ = ‘Fitness for the Service User’s Purpose’  Needs and requirements of service user  This isn’t as easy as it sounds... What is Quality? ISO 15189

 Purpose – to meet our needs we MUST Have an effective QMS that is embraced by all staff Work to a defined successful proven process Ensure our accreditation status is protected Deliver business/continual improvement Harmonise departments across Pathology by standardising QM documents What we need to deliver

 Enhances these outcomes: ability to reduce or eliminate medical error; the likelihood of meeting user requirements; the potential for successful accreditation assessments; sustainable attainment of quality objectives. Why have a QM Program?

 It’s a term that's widely used… and widely misunderstood.  The "cost of quality" isn't the price of creating a quality product or service. It's the cost of NOT creating a quality product or service.  Every time work is redone, the cost of quality increases. Obvious examples include: Repeat samples Documentation errors Repeat testing The cost of Quality

In short, any cost that would not have been expended if quality were perfect contributes to the cost of quality.

 Increased quality is accompanied by increased cost; higher quality meant higher cost.  This concept was questioned by quality pioneers:  Juran - benefits outweigh the costs  Feigenbaum - quality is everyone’s job  Crosby - “quality is free” Historical Views of Quality Gurus about cost of quality

 Higher quality means higher cost  The cost of improving quality is less than the resultant savings  Quality costs are those incurred in excess of those that would have been incurred if product were built or service performed exactly right the first time Today’s views…

Quality costs are the total of the cost incurred by:  Investing in the prevention of nonconformance to requirements.  Appraising a product or service for conformance to requirements.  Failing to meet requirements. Total Quality Costs

1. External Failure Cost 2. Internal Failure Cost 3. Inspection (appraisal) Cost 4. Prevention Cost Categorisation of Quality Costs

Expenses for Maintaining Quality Prevention CostsInspection/Appraisal Costs Periodic planning of quality goals and objectives Training and competence assessment Assessment of supplier capability Preventative maintenance Validation/Verification Quality Management and improvement activities Surveying customers and users Conducting ongoing competence assessment Performing and reviewing QC Participating in PT Measuring KPIs Conducting audits Participating in inspections and accreditation visits Quality Costs Expenses for Rectifying Quality Problems Internal Failure CostsExternal Failure Costs Sample problems at receipt Insufficient or expired reagents or supplies Rework, repair, retesting, reinspection Wasted blood and blood components Downtime Lost reports Reporting errors Customer complaints Misdiagnoses Lawsuits

The Current Challenge  Reduce costs whilst improving quality  Cost v quality trade-off  Main goal to reduce cost base above all other targets  Is the QM the ‘defender’ of quality?

 Increased costs: Calibration to o Pipettes o Balances o Timers o Callipers/Rules o Temperature logging Validation/Verification Staff time Resolution of findings Transition to ISO

The Current Challenge

 Pathology Service Manager  High costs and lack of cost control  Stop spending money!  What’s the benefit of ISO accreditation?

‘What’s the point of accreditation?’ Accreditation is an enabler of quality; it is patient- focused, impartial, objective and operates within a peer review model. It provides many benefits:  For Commissioners  For Patients  For Medical Laboratories ‘Just take it out of scope…’

 “Accreditation is a significant enabler of quality. It provides Commissioners with confidence that medical laboratories services are safe and reliable, and striving to continuously improve for the benefit of patients.” What’s the point of accreditation

Other industries…

Rethink… Current…  ‘let’s seek to improve quality and worry about the financial implications at a later date’  ‘we need to reduce costs. We will try to take steps to avoid a negative effect on quality’ Rethink…  ‘let’s set combined goals for quality improvement and cost reduction’  ‘let’s use quality improvement techniques as a means of achieving cost reduction’

 Quality and cost are complementary and not conflicting objectives  For each failure there is a root cause.  Causes are preventable.  Prevention is always cheaper.  Think laterally…service redesign, breaking down old barriers. Fundamental Change

Thank you! Don’t forget cost Dilbert!