AUTHOR(s): Horine, Patrick D. Pohjala, Eric D. Luecke, Randall W. TITLE(s): Healthcare financial managers and CQI. (implementing continuous quality improvement) illustration chart graph forms Summary: Continuous quality improvement (CQI) is an essential component of hospitals' efforts to survive and remain competitive amidst the changes affecting the healthcare industry. It urges hospitals to aim for perfection and not for certain performance thresholds, so that the bottom line is improved, customers are satisfied and the organization is enhanced. Financial managers have a central role in CQI, mainly by being a leader its implementation and by developing a vision of how the process should evolve. To aid them and other CQI teams in the process and to help them quantify studies, make conclusions and formulate solutions, they should take advantage of certain CQI tools such as brainstorming sessions, checksheets, flowcharts and diagrams. Healthcare Financial Management p34(3) Sept 1993 v47 n9 DESCRIPTORS: Total quality management_Management Hospitals_Administration Quality control_Analysis FILM NUMBER: 73Q2431 QUALITY The continuous quality improvement (CQI) process can be a mechanism for balancing a healthcare organization's quests for quality and for profitability. This article explores the role healthcare financial managers can play in the CQI process, discusses how healthcare financial managers can champion a hospital's drive for quality, and presents some basic tools used in the CQI process. Continuous quality improvement (CQI) is a management process whereby an organization strives for perfection rather than focuses on achieving acceptable thresholds of performance. Teams are formed within an organization, and those teams analyze issues that potentially can lead to problems within the organization. The CQI process is a bottom-up, rather than top-down, approach to excellence. Even if perfection is not attained, the process of striving for perfection will enhance systems, results will be improved, and customers' satisfaction levels will be raised. Many healthcare financial managers have reacted with skepticism to the introduction of CQI programs in their organizations. But as CQI begins to establish a successful track record, skepticism is giving way to support, and CQI programs are helping foster an atmosphere of healthy discourse and interaction. The initial squeamishness staff felt toward participating in the "role playing" and group exercises has given way to trust. Trust leads to empowerment, which in turn can lead to problem resolution, quality improvement, and enhanced financial performance. The financial manager's role The CQI process is an opportunity for financial managers to enhance their management skills. It also presents financial managers with chances to develop insights into operational issues and challenges. The CQI process brings financial managers out of their offices and into the hallways of their organizations, exposing them to daily operations. Financial managers should help lead the CQI process and offer support to staff. Financial managers should be members of several CQI teams and should help other CQI teams, for example, by responding to their requests for data, answering their questions on reimbursement matters, and performing financial modeling to assess the impact of recommendations made by CQI teams. Financial managers need patience to allow the CQI process to evolve in their organizations. CQI is a dynamic process that will not produce significant results until it is understood and embraced by the entire organization. Communication is key to this process, and efforts should be made to remove the barriers that separate departments and personnel. An open atmosphere is critical to the success of CQI programs. It is important for financial managers to develop a vision of how the CQI process should proceed in their organizations. This vision needs to be consistent with an organization's goals, but the vision can be personalized, too. To help develop this vision, financial managers should ask themselves such questions as: * Why is the CQI process important to me? * What does quality mean to me, and why is it important to the organization? * How can I balance my thinking properly between quality and profitability? CQI tools CQI teams in organizations have access to tools that help teams quantify their analyses, draw conclusions, reach solutions, and present solutions to management. Some of the following tools are commonly used in CQI environments: brainstorming sessions, checksheets, flowcharts, cause-and-effect diagrams, and Pareto diagrams. Brainstorming sessions. Brainstorming sessions involve assembling a team to think about a given problem and to verbalize solutions. Brainstorming sessions are not intended to develop a particular solution, or to select the best solution, but rather to get all solutions "out on the table." Later, other sessions can fine-tune suggestions that come out of the brainstorming session and teams then can arrive at the best solution. There are several rules to follow when participating in a brainstorming session: * Clearly identify the problem to be solved. A team should agree what needs to be discussed. Without such agreement, it is easy to digress and be unproductive. * Write down ideas as they are expressed. Ideas should not be interpreted or analyzed during a brainstorming session--that process should occur later. * Recognize all ideas. Foster an open dialogue by acknowledging each member's contribution. Brainstorming sessions are often followed by other CQI team meetings where the ideas that have been generated are analyzed and supported by additional fact-gathering or analyses. Checksheets. When a team discusses process improvement and identifies problems, it must validate any hypotheses with data. Although data collection can be a strenuous task, using a checksheet can make the task easier. Exhibit 1 illustrates a checksheet that can be used when collecting data necessary to help a hospital decrease delays in accounts receivable. Flowcharts. CQI teams should use a flowchart to identify points where processes can break down. A flowchart should document each step in a process, confirm that the steps are being performed in an appropriate chronological order, and challenge the appropriateness of each step. Exhibit 2 illustrates a flowchart that documents the process a hospital follows when generating a billing statement. Cause-and-effect diagrams. The results of brainstorming sessions and information collected from checksheets are instrumental to constructing a cause-and-effect diagram, whose purpose is to focus on problem-causing areas. Cause-and-effect diagrams, such as the one illustrated in Exhibit 3, are built by identifying all possible causes of a problem, by clearly stating the cause of a problem, and by understanding that the diagram recognizes only possible causes of problems. Pareto diagram. A CQI team can focus on problems identified through a system or process analysis by incorporating information that has been gathered from checksheets and cause-and-effect diagrams into a Pareto diagram, such as the one illustrated in Exhibit 4. Pareto diagrams compare problems in different areas of an organization, measure factors that contribute to problems over specific periods of time, focus attention on the most frequent problems, and help solve larger problems first. Practical applications There are many practical applications of the CQI process in hospitals. In hospitals where implementation of CQI programs has proven to be successful, several departments have benefitted. In the admissions department, CQI has improved the accuracy of patient information, reduced waiting time, and reduced the number of forms that need to be filled out. In the surgery department, CQI has helped improve operating room turnaround time, increased inventory levels, and reduced supply costs. In the billing and patient accounts department, CQI has helped to reduce and eliminate rebilling, decreased days in accounts receivable, improved turnaround time for generating bills, and improved billing accuracy. Throughout healthcare organizations, implementing CQI programs has helped decrease expenditures by streamlining existing procedures, enhanced patient satisfaction, increased employee "ownership" of the organization, and improved morale as employees learn to solve their own problems. Given the dynamics of the healthcare industry, CQI is essential to a hospital's ability to survive and compete. The astute financial manager will embrace CQI and use it as an instrument for change. Patrick D. Horine, MHA, is manager of training and CQI, Saint Alexis Hospital Medical Center, Cleveland, Ohio. Eric D. Pohjala, FHFMA, MBA, is vice president and chief financial officer, Saint Alexis Medical Center, and a member of HFMA's Northeast Ohio Chapter. Randall W. Luecke, MBA, CMA, CPA, is executive vice president and chief operating officer, Saint Alexis Medical Center, and a member of HFMA's Northeast Ohio Chapter. [SysOp note: no graphics were included in the electronic version of this article.]