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High Performance In Austere Times: National Focus Print E-mail
The Quarterly 2014

This article was written by Dr Susan Keam, derived from material presented by Professor Chris Baggoley on the 5th  of  September 2013 for the RACMA Annual Scientific Conference: High Performance in Austere Times. A recording of the conference can be found on the RACMA website here.

This article covers national approaches to safety and quality improvement (goals;  standards ; data usage) and discusses the link between improving quality and saving money  ( safety, quality and sustainability forum)

National approaches to safety and quality improvement  

The achievement of high performance in times of difficulty or financial restraint should use the same methods as those used in less constrained times. We should do things well all the time and we should not change methods according to the degree of constraint experienced. From a national perspective, safety and quality approaches already adopted by health ministers make the most sense to work on. Approaches to safety and quality improvement in austere times should be exactly the same as the approach in good times.

The Australian Safety and Quality Goals for Health Care set out important safety and quality challenges for Australia that would benefit from a coordinated national approach to improvement over the next five years.  They are relevant across all parts of the health care system and aim to focus attention on a small number of key safety and quality challenges that
  1. have a significant impact on the health and wellbeing of individuals, and on the healthcare system as a whole;
  2. can be improved through implementation of evidence-based interventions and strategies;
  3. are amenable to national action and collaboration.
Three goals (see http://www.safetyandquality.gov.au/national-priorities/goals/) that have been signed off by the Australian Health Minister are:
  • Safety of care (that people experience health care without experiencing preventable harm, avoiding the effects of adverse events). In particular, this goal focuses on the priority areas of medication safety, healthcare-associated infection prevention and recognising and responding to patient clinical deterioration. Care that avoids the occurrence of adverse events avoids the cost of repairing them; an Australian study by Terri Jackson several years ago found that $1 in every $7 of healthcare spend was to repair the effects of adverse events
  • Appropriateness of care (evidenced-based care; consider how often recommended care is received.) Priority areas are the management before, during and after hospital admission of patients with acute coronary syndrome or transient ischaemic attack and stroke
  • Partnership with consumers (that there are effective partnerships between consumers and healthcare providers and organisations at all levels of healthcare provision, planning and evaluation). Patient-centred care decreases mortality, the rate of hospital-acquired infection, reduces surgical complications and improves care quality.
It is well recognised that effective care (e.g. effective use of antibiotics or asthma therapies) is often only received by a minority of patients. For instance in the USA,  a 2003 publication reported that just over half of all patients received the care recommended for their diagnosed condition, and for some it was considerably less. For instance, recommended care was received by only 10.5% of those with alcohol dependence, 23% of those with hip fracture and 25% of those with atrial fibrillation. Approximately 50% of patients with diabetes mellitus or asthma received appropriate care, while those with depression, heart failure and hypertension (58-65%) or requiring prenatal care or breast cancer treatment (73 and 76%)  fared a little better (McGlynn et al 2003).

Closer to home, an Australian study found that the percentage of eligible encounters at which appropriate care was received during 2009-2010 varied between 80-90% for coronary artery disease, dyspepsia and chronic heart failure care to ≤25% for appropriate antibiotic use or treatment of hyperlipidaemia or alcohol dependence (Braithwaite 2012). A truly high performing system should not have the lower levels of appropriate care shown in these US and Australian studies.

Clinical Care Standards

The Australian Commission on Safety and Quality of HealthCare (ACSQHC) has developed Clinical Care Standards to improve patient outcomes and ensure that clinical care received is appropriate, improve patient experience and promote patient and clinician shared decision making. A clinical care standard identifies what anyone should expect to receive from a high-quality health care service. It covers key points of a clinical care pathway or defined clinical issue by addressing areas where clinical care has unwarranted variation.  

Why have Clinical Care Standards been developed?

Clinical care standards are necessary if we are to reduce inappropriate care or unwanted variation in care. Appropriateness of clinical care is a major focus in improving the quality of health care provision, and we need to look for links between the performance of standards and the quality of care. There are gaps between what we know and what we do, and unwarranted variation (variation in care that is not explained by the clinical circumstances or personal choices of the patient) occurs. Examples of unwarranted variation in care include
  • Overuse of treatments or procedures that do not help people get better;
  • Underuse of things that we know can help; and
  • Misuse (or errors) doing something incorrectly and harming people
Patient-Centred Care

There is substantial evidence linking patient-centred care with improved safety. For instance there are studies showing that patient-centred care decreases mortality (Meterko et al 2010), rates of hospital-acquired infection (DiGioia et al 2008) and surgical complications (Murff et al 2006), while providing higher quality clinical care/best practice (Jha A et al 2008) and improved patient functional status (DiGioia et al 2008). There is a clear correlation between the level of engagement in patient-centred care in an organisation and its financial and personal performance and  reduction in the rate of adverse  events  (Luxford and Piper 2011).

Australia has adopted the National Safety and Quality Health Service (NSQHS) Standards shown below. Of interest, there is emerging evidence of a link between the level of compliance with these standards, accreditation and the level of clinical performance of an organisation.


  • Standard 1: Governance for Safety and Quality in Health Service Organisations. Describes the quality framework required for health service organisations to implement safe systems;
  • Standard 2: Partnering with Consumers. Describes the systems and strategies to create a consumer-centred health system by including consumers in the development and design of quality health care;
  • Standard 3: Preventing and Controlling Healthcare Associated Infections. Describes the systems and strategies to prevent infection of patients within the healthcare system and to manage infections effectively when they occur to minimise the consequences;
  • Standard 4: Medication Safety. Describes the systems and strategies to ensure clinicians safely prescribe, dispense and administer appropriate medicines to informed patients;
  • Standard 5: Patient Identification and Procedure Matching. Describes the systems and strategies to identify patients and correctly match their identity with the correct treatment;
  • Standard 6: Clinical Handover. Describes the systems and strategies for effective clinical communication whenever accountability and responsibility for a patient’s care is transferred;
  • Standard 7: Blood and Blood Products. Describes the systems and strategies for the safe, effective and appropriate management of blood and blood products so the patients receiving blood are safe;
  • Standard 8: Preventing and Managing Pressure Injuries. Describes the systems and strategies to prevent patients developing pressure injuries and best practice management when pressure injuries occur;
  • Standard 9: Recognising and Responding to Clinical Deterioration in Acute Health Care. Describes the systems and processes to be implemented by health service organisations to respond effectively to patients when their clinical condition deteriorates;
  • Standard 10: Preventing Falls and Harm from Falls. Describes the systems and strategies to reduce the incidence of patient falls in health service organisations and best practice management when falls do occur.
The accreditation system has identified many shortfalls within various health care systems; however, current evidence indicates that accreditation is improving safety and quality of care standards. 

A requirement of the accreditation system is that unmet actions identified at initial assessment must be addressed by the day 120 assessment (i.e. 120 days after the initial assessment). Implementation to date (July 2013) shows that  120 (62%) health services have undergone a mid cycle assessment to Standards 1 to 3;  75 (38%) health services have had an organisation wide assessment to Standards 1 to 10.  79 (40%) of 198 health services have been had their accreditation status confirmed, while 119 (60%) health services have actions that need to be addressed within 120 days (although many of these are developmental [aspirational] actions).

Examples of how the accreditation process works

Health Service 1: a small, multi-site day procedure service that had >100 unmet core actions at initial assessment. At 90 days after initial assessment, there were >70 unmet actions and at 120 days <20 unmet items. The health service did not meet accreditation.

Health Service 2: a small, multi-site day procedure service that did not meet core items from Standard 3 because of an expansion of scope (+surgery) that the facility was not designed to accommodate. There have been unresolved issues relating to healthcare-associated infection control, and until these have been resolved, the health service has ceased surgery.

Health Service 3: a small multi-site service that had a large number of core items not met, mostly related to policies, documentation and auditing. All were addressed in 120 days.

The Impact of the NSQHS Standards

The NSQHS Standards are having an impact on service provision and clinician engagement. Health services are increasingly aware of the implications of not meeting the NSQHS Standards and are investing time and effort to overcome this. The three health services mentioned above were among the first to be accredited in 2013 and the lessons learnt appear to be rapidly spreading among health services. Assessment of health services to the Standards appeared to be rigorous, fair and in line with the expectations set by the Commission. Surveyors and accrediting agencies have a clear understanding of the requirements of the Standards.

Health services have reported numerous ways in which the system is improving as a consequence of the standards. These include seeking feedback from consumers and involving them in decisions in the service is run; supporting more standardised and consistently safer approaches to care; involving everyone in discussions about safety and quality and their  responsibilities; having greater accountability on the part of the executive and health  professionals for safety and quality; improving communication across health services; ensuring that policies and procedures are up to date and reflect  requirements for safety and quality; and improving processes for auditing and measuring compliance with policy  and the safety and quality of care. The feedback loop around the implementation of standards has an important role in increasing safety and quality.

Cycle of patient quality
Patient safety reporting for hospitals

Patient safety reporting for hospitals uses a combination of core hospital-based outcome indicators, patient experience, administrative data (condition onset flag) and the ability within the dataset to audit and drill down.

patient quality
Terri Jackson’s research (2011), which evaluated patient data from close to 1.7 million patient episodes, argues for the use of existing, routine administrative data and condition flags that are available for every admission. In the proposed patient safety measurement framework all in-hospital diagnoses are coded (within 45 days of patient discharge. All conditions, both pre-existing and acquired in hospital are coded and looked at so that the marginal cost of extra diagnoses, many of which are preventable (e.g. MRSA and other drug-resistant infections, Clostridium  difficle infection and fractures due to falls) can be calculated.

There are several advantages in using routine data to evaluate and monitor patient safety.  For instance, there is a large existing investment/ infrastructure, which is available for every admission in Australia in both the public and private sectors and has the benefit of having had patient chart review by trained and supervised coders. Review is timely (occurs within a maximum of 45 days post-discharge), comprehensive (not limited to special collections) and the new national ‘condition-onset’ flag distinguishes pre-existing co-morbidities from  hospital-acquired conditions (current episode) .

What is the cost of patient safety failure?  This is demonstrated in Jackson’s analyses of the marginal costs of CHADx top ten diagnoses by additional cost/episode (taking expected costs—DRG— into account):

CHADx Top Ten by additional cost per episode N of cases Additional cost per episode
1.16 Post-procedural disorders: endocrine & metabolic 46 $21,869
4.3 MRSA 352 $19,892
7.3 Enterocolitis due to Clostridium difficile 233 $19,745
4.4 Other drug resistant infections 978 $12,298
3.1 Falls with fractured neck of femur 124 $12,002
1.12 Complications of orthopaedic implants (excl. septicaemia) 291 $11,982
16.3 Other nervous system complications 1,335 $10,478
1.13 Complications of other implants (excl.septicaemia) 1,214 $9,843
1.8 Disruption of wound 1,094 $9,515
4.1 Septicaemia 4,406 $9,420

Source: Combined Victorian (05/06) & Queensland (06/07) costed inpatient episodes (N=1.69mil) and the volume-weighted system-wide costs of hospital-acquired diagnoses:

CHADx Top Ten by additional system cost in 2 states (Victoria and Queensland) N of cases Additional system cost (million)
4.1 Septicaemia 4,406 $41.5
1.10 Complications of cardiac and vascular implants (excl. septicaemia) 3,702 $28.7
6.3 Acute lower respiratory infections 5,064 $28.0
9.2 UTIs 6,714 $24.7
8.1 Pressure ulcers 2,873 $24.3
15.2 Electrolyte disorders w/o dehydration 17,555 $23.1
7.1 Gastro enteritis 4,592 $21.6
7.7 Other digestive system disorders 3,065 $21.1
7.4 Constipation 5,749 $19.0
6.1 ARDS, respiratory failure & pulmonary collapse 5,087 $18.5

Source: Combined Victorian (05/06) & Queensland (06/07) costed inpatient episodes (N=1.69mil)

What do these data mean?

CHADx are a mixture of ‘preventable’ and inevitable complications. However, they are not risk adjusted. They help to achieve balance public accountability vs. monitoring for patient safety, but also help and to avoid the “our patients are old…i‖“ nihilism. Our goal in managing patient safety should be to use economic information in setting priorities and reduce rates of complications where this is possible.

The economics of quality – a practical approach

Ovretveit (2000) identified a number of myths about the economics of quality, including:
  • Quality is free
  • All quality activities are effective and save money
  • Health personal cannot estimate the costs and savings of a quality project
  • An estimate of these costs and savings would not help to decide which quality activities to invest in
  • Clinicians will not take part in quality activities if cost reduction is also an aim.
Ovretveit also postulates the 10:100:10 rule of the increasing cost of higher quality i.e. the last 10% improvement to level of quality costs 100 times more than the first 10% increase.

UK perspectives

Marshall and Ovretveit (2011) ask the question - “Can we save money by improving quality”  - and answer it positively. They have identified a number of  areas in healthcare where savings that could be made by improving quality, for example  - improved commissioning, where specific areas for savings include better prioritisation of what will be purchased and improved selection of patients for interventions (for the NHS, this is predicted to achieve a 5-7% reduction in spend in 2013/2014 compared with 2008/2009) and shifting care to more cost-effective settings (predicted 3-4% reduction in NHS spend in 2013/2014 compared with 2008/2009). Likewise, improved quality of patient care (including better management of leg ulcers, reduced health care acquired infections, reduced drug errors and reduction in falls in hospital [four areas of cost savings that relate to four of the NHCQS standards – infection control, prevention of pressure areas and ulcers, falls prevention, medication safety]) may have the potential to achieve up to £3600 million savings. Other areas identified as having the potential for cost savings are better organisational business processes and better clinical business processes.

Another approach to saving money is to stop procedures that are ineffective, harmful, have been superseded or are not best practice. According to a 2011 analysis (Garner and Littlejohn 2011), in the UK,  NICE’s recommendations for potential disinvestment from low value clinical interventions are likely to increase efficiency and quality, but may not achieve the opportunity for cash savings to meet targets. While stretched health services budgets should not be used to fund low value services, international experience has shown that identifying and removing these services can be problematic and controversial and that there are few obvious candidates for total disinvestment. Those who oppose total disinvestment have suggested optimal targeting as an alternative strategy. Regardless, disinvestment should be part of broader agenda to improve efficiency and quality focusing on public health and prevention and ensuring appropriate care.

The USA experience

A similar scenario has been considered in the US (Health Policy Brief 2012). Analyses have estimated that as much as one third of the annual US healthcare costs in 2011 (including Medicare/Medicaid clinical care spending) was wasteful (either unnecessary or harmful) and would not worsen health outcomes if avoided. Areas where waste has occurred include failure of care delivery and care co-ordination, overtreatment, administrative complexity, pricing failures and fraud and abuse. Nevertheless, there are major challenges in reducing or eliminating such waste, as they require a rethinking of the way healthcare in the US is structured and organised, and the associated economic incentives, which currently promote volume over value.

Australian research

The same issues exist in Australian health care. Recent research (Elshaug et al 2012) has identified over 150 potentially low value non-pharmaceutical health care practices (those that were potentially unsafe, ineffective or inappropriately applied) listed on the Australian Medicare Benefits Schedule where further assessment, including assessing relative value of the service against comparators could be of value. Examples of such services include arthroscopic surgery for knee arthritis, testing for C-reactive protein, imaging in cases of low back pain, surgery for obstructive sleep apnoea and routine dilatation and curettage.

The Department of Health and Ageing’s activities

This work by Elshaug has fitted in well with the Department of Health and Ageing’s work on reviewing the Medicare benefit schedule. Their approach has been to convene the safety, quality and sustainability forum to help review the Medicare benefit schedule and recommend what is appropriate.   Forum participants are a mixture of public and private sector organisations and clinicians and  consumers.

The aim of the forum is to improve patient care through ensuring care is consumer centred, driven by evidence and high quality information and organised for safety, quality and cost-effectiveness. The focus has been on the development of a matrix to identify and prioritise candidates for the Medicare schedule using an in-depth, thorough, evidence-based approach. The matrix includes a number of domains (surgery; diagnostics; consultation; and technology) and possible candidates for review (Indications:  clinical threshold, targeting services, second line procedures, pricing, change in utilisation volume, international trends/standards). As a result of applying the matrix, there may be some changes to the scope of a lower-value procedure (from broad to narrow), or partial disinvestment of services, as it is rare for total disinvestment to be appropriate.

There is a national approach to improving performance, and through a safety and quality approach, it is getting better and stronger and some evidence to date shows that this approach can improve patient and economic outcomes.

Nevertheless, we need to remember that health is a prerequisite for social and economic development. The health of the population can be seriously damaged by the financial crisis that is affecting many countries in many ways. It can also present an opportunity to do more and do better for people’s health (Jakab 2012).

Professor Chris Baggoley
Chief Medical Officer, Australian Government


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The Royal Australasian College of Medical Administrators
Professor Chris Baggoley, , p679
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