Quality in the Health Care Industry

By Vineyard, Michael L. | Business Perspectives, Summer 1992 | Go to article overview

Quality in the Health Care Industry


Vineyard, Michael L., Business Perspectives


The cost of health care in the 1980s grew at an unprecedented rate, and the escalation of this cost is predicted to continue into the next century. Expenditures for health care accounted for 11.1 percent of Gross National Product (GNP) in 1988 and are projected to reach 20 percent of GNP in the near future. This figure represents an expenditure of $539.9 billion in 1988. The cost of health care is projected to rise another 400 to 500 percent by the year 2000.

The rising cost of health care, the Health Care Financing Administration's release of hospital mortality rate information, as well as political, social, ethical, and legal pressures that began in the 1960s have all been cited for the race of health care institutions (hospitals primarily) to adopt "total quality" management techniques. It would be rare to find any major hospital not trying to implement some form of industrial quality management. These techniques are also known by such labels as quality assurance, quality control, quality management, continuous quality improvement, or total quality management.

Evolution of Quality in Health Care

The concept of quality in health care can be traced as far back as the 5th century B.C. (for Western civilizations) to the Greek physician Hippocrates. Hippocrates established a medical code of ethics to guide physicians in their practice of medicine which basically stated "never do harm to anyone" (among other things). This code of ethics is still in use in the form of the Hippocratic Oath taken by all medical school graduates.

Florence Nightingale is considered the mother of modern quality assurance. It was Nightingale's efforts to improve the quality of medical care given to British soldiers during the mid-1800s that is considered the beginning of modern quality assurance. Quality assurance activities were centered on and elaborated upon the British experience for the next hundred years.

In 1952, the Joint Commission on Accreditation of Hospitals (now the Joint Commission on the Accreditation of Health Care Organizations) developed a voluntary accreditation program for hospitals. The program established standards to evaluate if hospitals have the mechanisms in place to provide high-quality patient care. The program has been expanded and is currently the primary accreditation program for hospitals and other health-care facilities in the United States.

In the mid-1960s, the government established Medicare and Medicaid to care for the elderly, poor, and disabled. Medicare implemented the Medicare Conditions of Participation. These conditions established minimum standards for monitoring and reviewing the appropriateness, effectiveness, and overall quality of health care received by beneficiaries of Medicare. This was subsequently followed by the enactment of Professional Review Organizations (PROs) in 1972 and a prospective payment system in 1983.

In 1973, the American Hospital Association adopted the Patients' Bill of Rights. This doctrine acknowledged and permitted a patient's right to considerate and respectable treatment, complete information, informed consent, continuity of care, refusal of treatment to the extent permitted by law, and confidential handling of records. Along these same lines, the National League for Nursing recognized the rights of patients and encouraged nursing professionals to communicate and protect these patient rights.

Product vs. Process Quality

When considering quality, it is helpful to distinguish between the quality of the product and the quality of the process that produced the product. Although process quality can affect product quality, the use of inspection and other techniques can ensure acceptable quality products from poor processes. For example, if a process is producing 50 percent defective products but these defects could be identified and scrapped before the product reaches the market, a reputation of providing high-quality products could be maintained. …

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