About the Management of Variability Program
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Management of Variability Program
Program Mission
Develop, test, and evaluate methods for reducing variability in health care delivery processes Disseminate findings regarding best-practices for reducing costs and improving quality of care through written case studies publications in peer reviewed journals workshops and seminars continuing education programs
These initiatives are all designed to illuminate the importance—and catalyze the development—of delivery-process improvements, in order to control health care costs and improve quality of care.
Program Background
The high cost of health care places a great burden on the competitiveness of many major American manufacturing and other businesses. In response to cost-reduction pressures from corporate leaders, health care managers often respond in ways that negatively impact quality of care. Such responses fail to recognize a source of great waste in the health care delivery system: excessive variability in the processes used to provide care.
"Health care managers often fail to recognize a source of great waste: excessive variability in the processes used to provide care."
There is a great deal of "natural" variability that is largely outside the control of health care managers: "clinical" variability (patients differ in the type and severity of their diseases, and similar patients respond differently to treatment), "patient demand" variability (patients arrive for treatment randomly over time), and "professional" variability (different providers treat similar patients in different ways), which has given rise to the development of approaches like practice guidelines and clinical pathways.
However, there are "artificial" sources of variability that can be reduced and managed. A very important but often unrecognized and under-studied source of variability is that which arises because of poor management of the processes used to provide care. The Program for the Management of Variability in Health Care Delivery (referred to as "Management of Variability Program [MVP]") will develop, implement, and evaluate methods 1) to reduce this type of artificial management variability, and 2) to manage "natural" variability.
The tools of operations management and operations research have been successfully used by many industries over the last 30 years to better understand and manage process flows in complex systems, often resulting in multi-million dollar annual savings. However, such techniques have attracted little interest in the health care industry, in part because of the historic lack of pressure to reduce costs. As cost-reduction pressures have increased, the tendency of managers has been to seek cost savings in those areas that are most transparent: the nature of the product delivered. This often has resulted in approaches that reduce the quality of the product delivered, e.g., shortened physician appointment times; or the substitution of effective but expensive drug A with inexpensive drug B, even when the latter leads to increased side effects.
"Process variability also compromises quality. If variability is reduced, peaks in demand, which stress delivery systems and often lead to medical errors, will be reduced." But what has not been recognized are the large savings possible by reducing variability in the processes used to deliver care. It is only once these "artificial" sources of variability have been eliminated that the threshold at which further cost savings would negatively impact quality of care becomes apparent.
Process variability not only adds unnecessarily to costs, but also reduces quality. The emerging literature on medical errors suggests that errors are much more likely when systems become stressed. If variability is reduced, peaks in demand, which stress delivery systems and often lead to medical errors, will be reduced. For example, recently in Boston and other US cities, peaks in surgical and emergency room demand have led to the diversion of ambulances to hospitals not prepared to care for the cases brought there. Reductions in variability in other parts of the system can allow emergency rooms to more adequately respond to "natural" variability in patient demand and thus reduce the need for ambulance diversions.
Experience in other industries suggests the cost and quality benefits of variability reduction are large. But for the most part, these benefits are unexplored and untapped in the health care area. To a large extent, health care research funders have not supported studies to improve health care management through approaches like variability reduction, probably under the assumption that such efforts are the responsibility of individual institutions and systems.
"The premise behind this Program is that research in ways to reduce process variability has much potential for reducing costs and improving quality."
However, the same logic would suggest that competitive pressures would create incentives for individual health care systems to, for example, perform cost-effectiveness analyses of new technologies, develop practice guidelines, and develop methods to risk adjust and profile providers. Unfortunately, the costs are too high and the benefits too diffuse for individual health care systems to undertake these studies. As a result, government and private foundations have poured millions into research studies of approaches to reduce costs and improve quality.
The premise behind the creation of MVP is that researching the reduction of process variability has as much potential for reducing costs and improving quality as approaches like cost-effectiveness analyses of new technologies, practice guidelines, and provider profiling. Its importance lies in the fact that individual institutions alone cannot support this type of research, even though its results will be of great benefit to individual institutions and the health care system as a whole.
Funding Sources
Currently, the Program for Management of Variability in Health Care Delivery is funded by a combination of federal agencies, public health organizations, and health care providers. In the near future, we also hope to receive support from health maintenance organizations, employers, pharmaceutical companies, and private foundations. - - -