Total Quality Management Practices and Business Outcomes: Evidence from Dental Practices

Total quality management (TQM) has revolutionized thinking about goods production and services delivery. Quality approaches to management have been evolving over this century, beginning with Taylor's (1947) scientific management. In the 1930s, Shewhart (1931) advocated improving products by improving work processes; after World War II, Deming and Juran helped the Japanese apply methods of quality control to all business functions of a company. TQM found its contemporary articulation in Feigenbaum's book Total Quality Control (1983). In the past decade, total quality (TQ) approaches to management have found application in a variety of U.S. industries. One of these industries is health care. The report on the National Demonstration Project on Quality Improvement in Health Care (Berwick, Godfrey, and Roessner 1990) details the importance of TQM for health care. This work demonstrates how several hospitals have tried to implement total quality methods but have had to limit applications to the administrative processes rather than medical practices. McLaughlin and Kaluzny (1990) help explain the difficulty by suggesting that total quality management represents a significant shift for health care professionals from top-down to team management approaches. Many of these professionals view TQM with skepticism because they see it threatening the traditional norms of professional autonomy and authority. Likewise, Milakovich (1991) argues that TQM requires health professionals to re-orient management away from traditional approaches driven only by cost, regulatory standards, or quality assurance. In health care, TQM typically has focused more on administrative processes and less on actual medical services delivery, owing to greater acceptance by administrators than by professionals. In the hospital or clinic setting, the professional staff, physicians in particular, often are removed from the day-to-day business decisions that affect the financial well-being of the health care organization. These professionals may not openly espouse the possibility of continual improvement in treatment processes because that orientation implies that a previous level of care was somehow less than optimal as well as possibly subject to litigation if outcomes were perceived as negative. If the benefits of TQM are more apparent to people making business decisions for the organization, then professionals in business for themselves (such as physicians, dentists, optometrists in private solo or small group practice) should be more inclined to quickly embrace the value of TQM, in general, and likewise recognize its value in improving both business and treatment processes. For this study, therefore, we focused on the use of TQM principles by dentists in private practice. These dentists not only treated patients, but they also ran a small business that addressed such concerns as customer satisfaction, paperwork processing, patient scheduling, and rewards as well as compensation for staff. By selecting professionals who were also business people as research subjects, we are likely to have a more receptive audience and a research setting in which we could examine the relationship of positive business outcomes to both administrative and treatment processes. Although not as large as medicine, dentistry is a significant industry: the national expenditure on dental care in 1990 was $34 billion (U.S. Health Care Financing Administration 1991). There are 144,000 practicing dentists in the United States (U.S. Bureau of the Census 1992); on average three workers are employed per dental office (American Dental Association 1987), resulting in a dental work force of nearly a half million people, including the dentists. In recent years, competitive pressures owing to higher dentist/population ratios, improved dental health, and a weak economy have sent dentists looking for methods to improve the management of their dental practices. Culver (1989) advocates the use of several methods to improve dental practice management which incorporate TQ principles (even though they are not identified as TQM). …