The Hospital Debate – Measuring Effectiveness or Efficiency
Health care and management of the hospital system is vexed issue here in Australia as well as the very significant bill in the USA. Recently there was an excellent article in Harvard Business Review titled “Turning Doctors into Leaders” . In this article Dr Thomas Lee states that one of the significant problem of the US Health system is that results are not being measured and people being held accountable to this.
The more I have thought about this the more I agree. In the Australian context there has been a lot of discussion recently regarding the efficiency or lack of efficiency of the State based hospitals. The conversation has focused on dollars spent, waiting lists, number of admin staff to medical staff etc.
What there has not been any meaningful data on is the effectiveness or otherwise of the hospital system. There is no measures on the health outcomes not just the inputs. As Dr Lee states the rising cost of health is a symptom not the cause.
A very important step would be for governments (and other administrators) to start collecting and measuring health outcomes. With this data and the measures then people need to be held accountable. Why is this so hard for our governments to do? Why is their focus only on the inputs?
This measuring of health outcomes is possible. The Cleveland Clinic in the US not only measures health outcomes, it publishes the results on its website for all to see. It compiles and publishes Quality and Patient Experience Measures. The model is here. Accountability is very public. It can be done and we must do it.
Quantitative and Qualitative Measures
Quantitative data never tells the whole story. Quantitative data is easier to collect and analyse and thus we tend to give it a far greater importance in our business. The accounting industry makes it easy for us to get a raft of quantitative data on the performance of the business.
Qualitative data though completes the story. But collecting and analysing qualitative data is a much harder process, and thus often is neglected in the management of the business.
For example to make a good product decision we need to know what is being sold, to whom, at what margin, this is the quantitative data. But we also need to know why some products are selling more than others. This question of answering the why takes a qualitative analysis of our customer’s decision, and often this involves judgment calls. But it is this qualitative data that will complete the story about the reason why a product or service is selling more than another.
The quantitative information may imply, a pricing or a market need, but the qualitative data, ie. actually asking the customer, may indicate that there’s something altogether different that is going on.
We need to have both qualitative and quantitative measures in a business. We need to have the judgment calls as much as we need to have the cold hard factual financial analysis. The blend of qualitative and quantitative data will give us the tools to lead and manage a business.
Photo:- by digitalART2
How will you know?
In the recent blog post I asked a question that was provoked by a podcast by Joseph Michelli about “How do you know?” In other words, what data are you relying on in your business to make decisions?
The question now is “How will you know?” I’m here looking at the future, that you have some goals and objectives in the business, but how will you know whether you’ve achieved them?
See, often goals and objectives can be nice words but it is not clear that we will know when we’ve achieved those nice words. Words are important in a business, critically important, but also just as important is the data.
What number are we focusing on? What is the critical main number that we are targeting in the next 3 months, 6 months, 12 months? What is the number or the measure that matches those nice words in our strategic objectives and goals?
It doesn’t matter whether the organisation is a small local business, a big business, or a not-for-profit organisation. We all have a purpose with the services or products we are providing and we all want to achieve a better result in the future than we have in the past.
So the question that I ask is “How will you know” that you delivered a better result? What is the one main thing that will tell you that you have delivered a better result?
My School Website – Measuring Output vs Input.
Here in Australia the Federal Government has recently started a new website called My School This website provides profile information about all of the schools in Australia (government and private).
The information detailed is various educational results from National testing that all students undertake in Years 3, 5, 7, & 9. Also the final year results are also included. The results for each school are compared to the national average and to statically similar schools.
The website has created some considerable controversy. The teachers unions are unhappy. A number of the school Principal’s are also unhappy. Their arguments is that these results are not reflective of the schools performance.
I am not an expert in assessing the educational results of a school, I am just a parent with a keen interest in measurement.
The metrics may not be perfect but they are better than what we had prior : – nothing. One measure that I would like to see is to track the results of a cohort of students through the schools. This would show the impact of the school. Given we are testing each student and then compiling them, it would relatively easy to track the students results throughout their time at the school.
The focus in the pass in education has been measuring the input. The politicians, teachers union, and schools themselves would talk about :-
- how many new teachers are employed
- class sizes
- dollars being spent nationally, state and school level.
The output though is a much more accurate reflection whether the money has been well spent. The My School website had least is moving towards measuring the output ie the educational results. So why the objections. Could it be that this start to reveal where the money is being wasted. Could it be that finally the focus on output will mean that people will be shown up.
This lesson is just as applicable to business. Be careful of measures that focus on the input. It is the output that is important. In business the output is measured by looking at what our customers think and do. Our measures must focus on what is important to the customer.
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