by L. Rad Dillon, R.Ph., C.Q.M.

HEALTH CARE AND ISO 9000: AN INTERVIEW WITH DR. MICHAEL CRAGO

This column is Part 1 of a two-part interview with health care quality expert Dr. Michael Crago.

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Author L. Rad Dillon, R.Ph., C.Q.M.

Healthcare quality expert Dr. Michael Crago

his time we are going to do something different by presenting an “e-interview” I conducted over the internet with notable International Organization of Standardization (ISO) and health care quality expert, Dr. Michael Crago, concerning the ISO standards. This method has allowed him to provide more depth and some interesting references than a “traditional” interview would allow. Hopefully Dr. Crago’s answers will help the home infusion practitioner understand the exciting and potentially revolutionary implications of ISO in health care. Michael G. Crago, Ph.D., is a Quality Management Systems Lead Assessor, Six Sigma Champion, and the Corporate Director for the Health and Human Services Certification Program of a major international ISO Registrar in North America. He has 28 years of comprehensive international leadership experience in health care operations and process management quality, and has capably administered numerous health care organizations, health care systems and networks, and multi-functional service organizations. He is tirelessly endeavoring to engage the U.S. health care industry with process management quality to help solve the industry’s systemic patient safety, business performance, and provider and consumer morale problems. For more information, visit his web site at www.iso9000healthcare.com, or contact him at [email protected]. Rad Dillon (RD): Please describe the intent of the ISO 9000 International Standard for quality management systems, and briefly describe ISO’s history. Michael Crago (MC): The International Organization of Standardization (ISO) is a non-

governmental entity that was founded in 1947 by 25 countries in order to develop voluntary technical standards for international businesses. Its intent was to provide consensus for an approved methodology that would ensure consistency in manufacturing by ensuring standardization of processes and services to conform with and fulfill world-market customer requirements. Today, ISO membership is comprised of over 140 countries with corresponding national standards bodies, one of which is the America’s American National Standards Institute (ANSI).1 The ISO 9000 Quality Management System was originally created in 1987 to non-prescriptively provide a management system quality standard for non-technical business functions. It was further improved in 1994, and released as three distinct standards (ISO 9001, 9002, and 9003). The latest version of ISO 9000 is ISO 9001:2000. It was fielded as the consolidated foundation and structural framework for management system quality on December 15, 2000.2 ISO 9001:2000 principles emphasize a customer focus, leadership, involvement of personnel, a process management approach, a total system approach to management, continual improvement, a factual approach to decision making, and mutually beneficial supplier relations. Its structural methodology non-prescriptively requires you to describe your quality management system in terms of your organizational system’s management responsibility, resource management, service realization, and measurement, analysis and improvement elements. The ISO 9000 Quality Management System allows the health care organization to design and implement a management system that has effectively integrated and synchronized efficacy of patient care efficiencies with their organization’s business processes. RD: How are ISO standards being used internationally, and what industries in the U.S. are following them?

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QUALITY MANAGEMENT MC: ISO International Standards are being used by all industries in the United States and in another 139 countries worldwide as a condition of doing business, engaging in market penetration, earning market share, or sustaining market share. ISO certification

demonstrates that companies have an approved quality management system in place, and ensures sustainable consistency, reliability, value, and customer service. This demonstrated performance proves to customers and suppliers that those products and/or services

that are being produced are being done so with a consistent level of quality to satisfy stated or implied customer requirements and expectations. The ISO Quality Management System governs all facets of the business. Organizational boundaries tend to break down as people work together in integrated and synchronized vertical and horizontal processes, functions, and levels. Increased efficiency and effectiveness occurs as the correct information, equipment, tools, and documentation are put into place. Operating costs are reduced through the sustained and validated implementation of consistent management system quality. Consequently, the corporate culture of the organization becomes positive and upbeat, and employees look forward to coming to work everyday.

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RD: Have ISO standards penetrated health care here or abroad?

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MC: No, there is no real market penetration yet in American health care, although our health care industry is now being strategically engaged with determination and promise. Outside the United States, ISO 9000 Certification has been adopted as national accreditation by the European Union countries. In the Americas, Brazil is considering national health care accreditation by harmonizing clinical quality assurance efficiencies with ISO 9001:2000. The U.S. is lagging behind our friends in the E.U., Brazil, Latin America, and other international early adopters like Canada, Australia, and New Zealand. We seem to be stuck in a quicksand malaise of denial over our inability to successfully get a handle on our patient safety and health care business performance problems. This inability to cope continues to be characteristic of far too many leaders and managers in America’s health care industry, and as an American health care quality expert, is a particularly bit-

RD: Why are you excited about what ISO can do for health care? MC: Any time you are able to assure safe and economical patient care that meets both health care provider and

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ter pill for me to swallow when I consider the startling facts. The Institute of Medicine (IOM) reported in November 19993 and in March 20014 that the business of health care is killing about 100,000 hospital patients per year due to health care system-process disconnects. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) reported in December 2001 that health care’s propensity to harm is worsening. Add health care’s ever-worsening employee recruitment and retention problems, and the fact that staff shortages contribute to potentially unsafe working conditions for both patients and providers, and one is left with one undeniable conclusion: Patient safety and health care’s risk management, risk prevention, and malpractice liability are still out there “flapping in Lahlah Land” because America’s health care leaders and stakeholders continue to either live in denial or engage in codependent enabling behavior. From a fiscal performance perspective, almost half of America’s hospitals operate at a financial loss, with the majority of the remaining hospitals demonstrating a one- to three-percent profit margin. (Non-profit hospitals need an average four-percent profit margin to just break even.)6 What other businesses in America would countenance such low profit margins with an expectation of remaining in business? What is America’s ever-worsening burden as a result of these problems? Payer health care spending grew 6.9 percent in 2000, and continues to grow, while employers’ costs for employee health care benefits reached 11.2 percent in 2001 and are projected to exceed 12.7 percent in 2002. 7

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Additional ISO Resources Name

Address

Description

ISO-International Organization for Standardization

www.iso.org

Official home page for ISO

The ASQ ISO 9000:2000 Handbook

www.iso.ch/iso/en/ ISOOnline.openerpage

Best single text. Pricey at $120, but comes with CD ROM containing most major ISO standards.

ASQ web site ISO information

www.asq.org/stand/types/ iso9000.html

The American Society for Quality is intimately involved with administration of ISO in the US. Many questions are answered here.

To Err is Human

www.nap.edu (use the search function by publication title)

View pdf versions of both of these important books free online!

www.umich.edu (click news and information services and go to press releases)

Extensive commentary on article by John Griffith and Jeffrey Alexander referenced in Crago interview

Crossing the Quality Chasm

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“Validity of JCAHO hospital accreditation” press release

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consumer stakeholder needs and expectations, you are enhancing your organization’s reputation and improving your market position accordingly. Regardless of the kind of health care organization your are, the quality of the patient and/or employer experience critically factors into a consumer or consumer organization’s willingness to continue a relationship with you and your facility or practice. ISO 9000 has successfully demonstrated across the manufacturing and services industry landscape in over 140 countries that it can help an organization’s business improve and sustain the quality of its product and/or service deliverables. I believe ISO 9001:2000 will now prove that it can do this for America’s health care industry too. RD: Tell us briefly about the IWA-1, which is a “drill-down” of ISO standards into health care.

MC: The International Workshop Agreement (IWA) is a health care supplement for the ISO 9004:2000 Guidelines for Performance Improvements. The goal of the IWA is to aid in the development or improvement of a fundamental quality management system for health service organizations in order to ensure continuous improvement, emphasize error prevention, and reduce variation and/or organizational waste.8 Like ISO 9001:2000, the IWA asserts that for an organization to function efficiently and effectively, it has to identify and manage numerous linked processes or process activities which require resources and must be managed in order to enable the process transformation of inputs into outputs. Often the output from one process directly forms the input to the next. The application of a management system comprised of organizational

processes, together with the identification and interactions of managing said processes, is described by the IWA as the “process approach.” The IWA asserts that health service organizations should define all their processes. These processes, which are typically multi-disciplinary, include administrative and other support services, as well as those involving clinical treatment. IWA examples include:9 1. Development and delivery of training 2. Surgical process for patient/clients needing surgery 3. Preventive and corrective maintenance program for equipment and facilities 4. Diagnosis and development of a care plan 5. Preparation of the billing and coding for services rendered 6. Continued care of a patient/client in any setting

RD: What do you mean by “process management quality”?

RD: Could you describe the steps involved in becoming ISO-registered?

MC: Michael Hammer aptly explains process management by stating simply that it is a “structured approach” to performance excellence. He goes on to say that process management is a congruently “disciplined design and careful execution of an organization’s end-to-end business processes.” He defines a business process as an “organized group of related activities that work together to create a result of value to customers.”10 From an ISO 9000 perspective, these business processes are derived from an understanding of the business’ management system’s inputs, processes, and outputs. The emphasis of process management quality is to focus on the organization and team-

MC: Once a health care organization has made the commitment to implement the ISO 9000 quality management system, a logical series of steps are taken to move toward implementation, validation, and certification of the health care organization’s management system quality. The following simple steps offer an overview of how to earn ISO 9000 registration: 1. Get top management’s commitment to decisively engage the organization with process management quality, and then “power down” through the manager chain of command. 2. Select an ISO registrar early in the process to ensure congruent implementation. 3. Encourage and train personnel so that they understand and buy-into a common vision and purpose. 4. Prepare the Quality Manual to describe and document the form and structure of your quality management system and its integrated and synchronized management system processes. 5. Describe and document your processes’ operating procedures. 6. Conduct internal audits to ensure conformance to your plans, policies, processes, and procedures. 7. Implement preventive and corrective actions to effectively prevent and manage risks. 8. Conduct management review to ensure that your organization’s quality management system’s processes are resulting in planned outputs. 9. Undergo the certification process with an accredited ISO registrar to achieve validation of your organization’s management system quality. 10. Become internationally recognized with ISO 9000 Registration.

work, with all activities in a business process being aligned and task organized to work together for the common purpose of meeting customer needs and expectations. As pertains to health care, the customer can be external or internal to the organization (patient, health care provider, or other health care stakeholders). RD: Isn’t it true that some / many organizations chose to use consultants to help them prepare for ISO? MC: Yes. The ISO registrar is not allowed to consult. Should the organization choose to outsource ISO support with a consultant, the consultant can help the organization expedite standing-up their ISO 9000 quality management system. The ISO Registrar, on the other hand, can pro-

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7. Counseling of a patient/client and family

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vide technical support to help the organization interpret the standard. There is a real advantage in having a qualified technical support team comprised of both consultant and registrar to help crosswalk the organization through the ISO cultural change process. But it is also possible for the organization to establish an ISO 9000 quality management system without a consultant. If the decision were made to not use a consultant, I would suggest relying on the technical support that the registrar can provide early in the process. RD: Can an organization simply comply with ISO standards without going through registration? MC: Sure. You can also teach yourself calculus without availing yourself of classroom instruction. You can then

attempt to write your own tests, take the tests, grade them, and report on your own performance results. Will doing these things make you a mathematician? I think it would be more reasonable to undertake such a complicated task by choosing to be taught by a mathematics teacher who understands how to capably walk you through convoluted equations to be able to objectively pass the tests that do lead to becoming proficient. The ISO registrar will help you nonprescriptively say what you mean, do what you say, prove it, and improve it. The ISO consultant will help you to understand and prescribe what it is you want to say or do in accordance with the standard. RD: How long does it typically take to go through this process?

MC: If the organization is fully motivated and outsources with an ISO training and donsulting organization, six to 12 months. If you try to do it on your own without experienced quality management systems expertise, easily two- to three-times longer. RD: How much does it cost? MC: It depends on what you are prepared to settle for. Like buying a car, do you want a Lincoln, Chrysler, Chevrolet, or Yugo? Reasonable people understand and accept that you get what you pay for. They also understand that the cost of both ISO registration and ISO consulting will reasonably depend upon the size and complexity of your organization. However, more to your question, if we use a community hospital as a yardstick for measurement for ISO 9001:2000 registration purposes, let’s consider a standard three-year contract. It includes an optional pre-audit (gap analysis), certification audit, surveillance audits either semi-annually or annually after certification, and registration administrative support activities. The costs for this package should be in the $25-35,000 range. Consulting and training services, depending upon how demanding and how responsive staff might prove to be, will probably come in at $75-100,000.

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Next issue, we’ll discuss how ISO registration might apply to home care and alternate site providers.

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L. Rad Dillon, R.Ph., C.Q.M., is National Pharmacy Manager for Apria Healthcare and is based in Louisville, Kentucky. An ASQ-certified Quality Manager, he is also a member of the National Home Infusion Association’s Standards and Accreditation Committee, and is the project leader for the NHIA Operational Benchmarking Initiative. He can be reached at 800-6884472 ext. 9405 or [email protected]. For more information about the NHIA Operational Benchmarking Initiative, go to http://www.nhianet.org/benchmark.htm.

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1. International Organization of Standardization (ISO): “About ISO What is ISO?” {Online} http:// www.iso.ch/iso/en/aboutiso/intro duction/whatisISO.html (2002) 2. Ibid. 3. Richardson W, President, W. K. Kellogg Foundation and Chair of the Committee on Quality of Health Care in America. Derived from his public briefing on “To Err is Human.” November 29, 1999. 4. Richardson W, President, W. K. Kellogg Foundation and Chair of the Committee on Quality of Health Care in America. Derived from his public briefing on “Crossing the Quality Chasm: A New Health System for the 21st Century.” March 1, 2001.

5. Altman L.: “The Doctors World; The Wrong Foot, and Other Tales of Surgical Error.” The New York Times, Science Desk, December 11, 2001. 6. Orlikoff J, President, Orlikoff & Assoc., Inc. and Senior Advisor for Governance, American Hospital Association. Derived from his Keynote Address to the 2001 Maine Hospital Association’s Annual Governance Conference, May, 2001. 7. Lovern E. Era of Modest Healthcare Inflation Ends, Modern Healthcare Daily Dose, January 8, 2002 (As reported in bizjournals.com, dated January 21, 2002). 8. International Workshop Agreement (IWA 1). Quality Management Systems – Guidelines for Process Improvements in Health Services Organizations (Reference Number IWA 1:2001 (E).

9. Ibid. 10. Hammer M. Process Management and the Future of Six Sigma. MIT Sloan Management Review;43(2)

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REFERENCES:

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