Chapter 12: Process Improvement

Process Improvement For Physicians and Health Plans

[Aligning Incentives Among Stakeholders]

By Brent A. Metfessel

Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations – Steve Jobs

Physicians and health plans use practice pattern information for a number of initiatives including network optimization; incentive pool, bonus, or withhold distribution; and physician education. Other stakeholders are also interested in physician cost-effectiveness and quality profiles, including health care consumers, employer groups (both self-insured and health plan customers), accrediting bodies (such as the Joint Commission), as well as physicians and others involved in day-to-day patient care.


Health plans, consumers, and employer groups desire to use information from practice pattern profile reports for decision making concerning physicians.  There exist several areas where such decisions affect physician practices.

Network Management 

Some MCOs use practice profiles to determine which physicians should be brought into the network, maintained as a network member or given a new level in a tiered network.  Some health plans allow from one to three years between when they initiate dissemination of physician profiles and when they use them for network decision-making to educate physicians in the methodology and for practice improvement. A gap between providing initial physician profiles and using them for decision-making may also be provided if there are significant changes or updates to the health plan methodology used for practice pattern profiling, to allow time for education, questions, and feedback. 

Practice pattern profiles are not usually used alone in making network status decisions.  Other considerations, such as patient satisfaction results, credentialing, and information on possible sanctions must also be considered.

More recently, some health plans have begun using the Web to display physician practice pattern measurement results directly to health care consumers and employer groups that are customers of the MCO.  Some MCOs have used a color-coded or symbolic system (such as a stars or check marks) to communicate physician performance results to employer groups and consumers to help them determine which physicians are best for their needs.  Several dimensions may be included in a Web-based report, including quality performance, cost-efficiency of practice, patient satisfaction, and other indicators.  Web-based physician reporting is a relatively new paradigm and several more years may be needed to fully ascertain its effect on MCO relationships with physicians, employer groups, and consumers.

Another issue in practice pattern profiling is the relative weighting of quality and cost measurement in physician profiles.  MCOs are increasingly adopting the “quality first” paradigm; that is, first measuring quality of care then only measuring cost-efficiency for those who “pass” quality.  The intent of this paradigm is to avoid measuring cost at the expense of quality, and promoting those who practice both high quality and cost-efficient care.  In some systems, those who pass quality only will still get a positive quality grade, and those who pass both quality and cost-efficiency will get positive grades in both areas.  Patient satisfaction survey results may result in a third grade.  Accordingly, an active research area that is just beginning to be explored is the correlation of quality and cost of care.  The initial thinking, based on preliminary data analysis, is that high quality of care may increase cost somewhat in the short run (e.g., by prescribing more recommended long-term controller medications for persistent asthmatics, statins for coronary artery disease patients, and increased monitoring for diabetics as recommended in guidelines).

In the long run, however, costs would be expected to decrease through fewer “sentinel events”, such as emergency room visits and hospitalizations for potentially preventable exacerbations, as well as decreased costs from long-term complications, such as diabetic retinal and kidney disease.  To more clearly answer these questions requires large data repositories that cover multiple years of follow-up for each patient in question.  Given that many patients do not stay with the same employer or health plan for more than two or three years, initiatives to develop centralized databases across different employers and health plans to track these patients over the long term will be useful for this and other research questions.

More here: BOOK ORDERS [Pre-Release]:

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7 thoughts on “Chapter 12: Process Improvement

  1. On the Centers for Education and Research on Therapeutics

    The site provides access to educational and informational resources developed from research conducted by CERTs and is intended to improve health care quality, safety and effectiveness.

    Clinical topics are included for physicians, while the site’s educational section includes materials to assist consumers with clinician-patient conversations and decision-making, as well as an online medication records.

    Hope Hetico; RN, MHA

  2. Safe Patients, Smart Hospitals

    This new book shows how simple steps can fix our hospitals and improve patient care thru various process improvement initiatives.

    The lead author, Peter Pronovost PhD, MD is a professor at Johns Hopkins University School of Medicine and serves as medical director for the Johns Hopkins Center for Innovation in Quality Patient Care.

    Dr. David Edward Marcinko; MBA

  3. The Work Flow Seven

    Here is an essay on the challenges of workflow process for doctor’s; written by Robert Rowley, MD.

    There are 7 workflows in an ambulatory practice, which need to be addressed in order to fully abandon paper charts: (1) billing and accounts receivable; (2) scheduling; (3) in-house messaging; (4) documentation of patient interactions; (5) processing refill requests; (6) reviewing and acting on lab results; and (7) managing external correspondence about patients.

    A way of dealing with each of these items needs to be addressed in order to successfully embrace EHR technology and abandon paper.


  4. Statistical Orientation

    Statistical thinking is a basic element in all medical quality management programs, but especially in Total Quality Management, and statistics have become the communication tool of TQM.

    Several different statistical concepts are invoked for the purpose of eliminating surprises. Statistical Process Control (SPC) and Statistical Quality Control (SQC) are evaluatory techniques used to measure the increase in quality output.

    The statistical controls guide both management and production processes. “Statistical thinking strives to separate the common causes of variation from the special causes so that both can be controlled and improved.”

    Statistical controls are necessary in order to measure the differences in improvement. They are required to accurately measure the changes brought on by installing any quality program, but especially, medical TQM.

    Dr. David Edward Marcinko; MBA

  5. Collaboration Among Healthcare Organizations Needed

    Hello Dr. Metfessel –

    One way to improve the operations management function is to obtain better information by collaborating with other organizations in gathering information.

    Why? Most operational failures result from breakdowns in the supply of materials and information across organizational boundaries. Better capacity decisions can often be made in collaboration with other institutions.

    For example, emergency rooms often take collaborative approaches and use Internet technology to regulate ambulance traffic to emergency rooms. Some metropolitan areas share information concerning accessibility and efficiency of care on a regular basis. The sharing of information facilitates benchmarking that leads to improved performance for the community.

    Hospitals can also benefit from involvement in community-based quality improvement initiatives. For example, community hospitals can collaborate with their competitors and members of the business community to share information that leads to the identification of opportunities to improve performance, the delivery of root-cause analysis, and the development of process measures that facilitate change.

    Working with other organizations and employers in the community can not only lower individual patient costs, but also improve population health.

    Dr. David Edward Marcinko; MBA, CMP

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