# Presentation: 214588

## Cost of Waste/Poor Quality 

- Lucy A. Savitz, Ph.D., MBA
- Senior Associate, Abt Associates
- _[Lucy_savitz@abtassoc.com](mailto:Lucy_savitz@abtassoc.com)_
- Senior Scientist, Intermountain Healthcare
- _[Lucy.savitz@intermountainmail.org](mailto:Lucy.savitz@intermountainmail.org)_
- AHRQ Annual Meeting 	September 27, 2007
- Bethesda, Maryland

## 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%)

## 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
- Task Order Officer, Cynthia Palmer
- Lead Investigators
- Lucy A. Savitz
- Brent James, Intermountain Healthcare
- K. Bruce Bayley, Providence Health System
- Jane Wallace, Intermountain Healthcare

## Deciding on Approach to Estimate Waste

| Analysis Level | Approach | Target |
| --- | --- | --- |
| Population | Dartmouth Atlas, Wennberg | Supply-induced demand |
| Episode | Six Sigma & ATP QI Projects | Selected opportunities |
| Patient Care  | TPS/Lean | Inefficiency of front-line workers  |

## Scope of Observations

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

## How Evaluated

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

## ResultsCost of waste for frontline health care worker activities is substantial

- Overall, 35% waste observed
- 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

## Lessons Learned

- 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
- 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
- Culture change required to support the will to eliminate waste

## 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
- 	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

## Next Steps

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