1. Cost of Waste/Poor Quality Lucy A. Savitz, Ph.D., MBA Senior Associate, Abt Associates Lucy_savitz@abtassoc.com Senior Scientist, Intermountain Healthcare Lucy.savitz@intermountainmail.org AHRQ Annual Meeting September 27, 2007 Bethesda, Maryland

2. Purpose Reducing waste in health care is key to affordable, high quality health care. Nearly half of consumed resources represent potentially recoverable waste in hospitals (44%)

3. Framework for Estimating the Cost of Waste and Poor Quality in Health Care AHRQ IDSRN Contract 290-00-0018, Task Order 11 to RTI International AHRQ IDSRN Contract 290-00-0018, Task Order 11 to RTI International Task Order Officer, Cynthia Palmer Task Order Officer, Cynthia Palmer Lead Investigators Lead Investigators  Lucy A. Savitz  Brent James, Intermountain Healthcare  K. Bruce Bayley, Providence Health System  Jane Wallace, Intermountain Healthcare

4. Deciding on Approach to Estimate Waste Analysis Level ApproachTarget Population Dartmouth Atlas, Wennberg Supply-induced demand Episode Six Sigma & ATP QI Projects Selected opportunities Patient Care TPS/Lean Inefficiency of front-line workers

5. Scope of Observations 61 workers 61 workers 72 observation hours (36 morning, 36 afternoon) 72 observation hours (36 morning, 36 afternoon) Staff role/functions Staff role/functions  Physicians  Nurses  Other clinical (lab techs, pharmacists) Years of experience Years of experience  8% less than 1 year  72% more than 3 years

6. How Evaluated Standard set of activity categories and definitions (6 categories with 12 sub-category clarifications) Standard set of activity categories and definitions (6 categories with 12 sub-category clarifications)  Operations  Clarifying  Defect/Error  Processing  Motion  Other Trained observer Trained observer Developed toolset for structured observation and data capture Developed toolset for structured observation and data capture Replication of approach at an academic center Replication of approach at an academic center

7. Results Cost of waste for frontline health care worker activities is substantial Overall, 35% waste observed Overall, 35% waste observed Non-operational activities were almost evenly split across 3 major categories Non-operational activities were almost evenly split across 3 major categories  20% clarifying  19% processing  17% motion Waste on a single 12-hour shift, 46-bed medical unit = $2,309 Waste on a single 12-hour shift, 46-bed medical unit = $2,309

8. Lessons Learned Waste at the patient care level is primarily related to inefficient systems, wide variability in work processes, and “ work around ” culture Waste at the patient care level is primarily related to inefficient systems, wide variability in work processes, and “ work around ” culture Key to waste reduction is developing the capacity to recognize and eliminate waste — developed toolset Key to waste reduction is developing the capacity to recognize and eliminate waste — developed toolset Front line ownership & support of their role in problem solving is essential Front line ownership & support of their role in problem solving is essential Leadership must help remove constraints so a range of solutions can be tested Leadership must help remove constraints so a range of solutions can be tested Culture change required to support the will to eliminate waste Culture change required to support the will to eliminate waste

9. Knowledge Transfer Staff training at UNC Health Care RTI International. Cost of Poor Quality or Waste in Integrated Delivery System Settings, AHRQ Final Report submitted to Cynthia Palmer, AHRQ TOO, Contract No. 290-00-0018, RTI Project No. 0207897.011; August 2006 RTI International. Cost of Poor Quality or Waste in Integrated Delivery System Settings, AHRQ Final Report submitted to Cynthia Palmer, AHRQ TOO, Contract No. 290-00-0018, RTI Project No. 0207897.011; August 2006 Wallace, J, LA Savitz. Estimating Waste in Frontline Health Care Workers. Journal of Evaluation in Clinical Practice, forthcoming 2007 Automating toolset on a notebook at Intermountain Automating toolset on a notebook at Intermountain

10. Next Steps Spread Spread  RICU Supply/Material Waste Reduction  MRSA Project  Women ’ s & Newborn Increasing observations for improved role/function estimates Increasing observations for improved role/function estimates Apply in outpatient setting Apply in outpatient setting