welcome to the first annual asq cincinnati

WELCOMEWELCOME

To The To The First Annual ASQ CincinnatiFirst Annual ASQ CincinnatiHealthcare Quality Awards Healthcare Quality Awards

Dinner and CeremonyDinner and Ceremony

CHALLENGES FACING CHALLENGES FACING HEALTHCARE PROVIDERS IN HEALTHCARE PROVIDERS IN

TODAY’S TURBULENT FINANCIAL TODAY’S TURBULENT FINANCIAL TIMESTIMES

Presented by:Presented by:

BRUCE W. JOHNSONBRUCE W. JOHNSONChairman, ASQ Cincinnati SectionChairman, ASQ Cincinnati Section

President, Johnson Consulting ServicesPresident, Johnson Consulting Services

Challenges Confronting our Challenges Confronting our Healthcare SystemHealthcare System

Perceptions of our healthcare systemPerceptions of our healthcare system Government reports & other studiesGovernment reports & other studies Shortage of healthcare workersShortage of healthcare workers Changing demographicsChanging demographics Healthcare requirements of seniorsHealthcare requirements of seniors Complexity and fast pace of scientific Complexity and fast pace of scientific

discoverydiscovery Complex Inadequate Healthcare SystemComplex Inadequate Healthcare System Medical errorsMedical errors Medication errorsMedication errors

Challenges Confronting our Challenges Confronting our Healthcare SystemHealthcare System

Pharmaceutical Co MarketingPharmaceutical Co Marketing Escalating healthcare costs Escalating healthcare costs Impact on US businessesImpact on US businesses Impact on US EconomyImpact on US Economy Foreign CompetitionForeign Competition Is nationalized healthcare the answerIs nationalized healthcare the answer Can we afford it?Can we afford it?

PERCEPTIONS OF OUR PERCEPTIONS OF OUR HEALTHCARE SYSTEMHEALTHCARE SYSTEM

Perceptions of our Healthcare Perceptions of our Healthcare SystemSystem

In a 1998 Harris and Associates poll, 79 percent In a 1998 Harris and Associates poll, 79 percent of the sample said the healthcare system needs of the sample said the healthcare system needs either “either “fundamental changefundamental change” or to be ” or to be ““completely rebuiltcompletely rebuilt”.”.

Perceptions of our Healthcare Perceptions of our Healthcare SystemSystem

Survey Question Public% Agree

Phys.% Agree

Policy Makers

% Agree

People with chronic conditions usually receive adequate medical care

48% 45% 22%

Government programs are adqequate to meet the needs of people with chronic illnesses

38% 20% 16%

Health Insurance pays for most of the services chronically ill people need.

37% 28% 23%

Source: Anderson GF. “Physician, Public and Policy-Maker Perspectives on Chronic Disease Conditions.” Archives of Internal Medicine 2003: 163(4); 437-42.

Government Reports & Other Government Reports & Other StudiesStudies

In their report on Crossing the Quality In their report on Crossing the Quality Chasm: A New Health System for the 21Chasm: A New Health System for the 21stst Century” (2001), the IOM states that “Century” (2001), the IOM states that “The The U.S. healthcare delivery system does not U.S. healthcare delivery system does not provide consistent, high-quality medical provide consistent, high-quality medical care to all peoplecare to all people.”.”


First National Report Card on Quality of First National Report Card on Quality of Healthcare in America published by the Rand Healthcare in America published by the Rand Corp. in 2006, reported that “Corp. in 2006, reported that “Quality varied Quality varied substantially across conditionssubstantially across conditions, for example , for example people with high blood pressure received about people with high blood pressure received about 65% of the recommend care, people with alcohol 65% of the recommend care, people with alcohol dependence received about 11%”.dependence received about 11%”.

Healthcare also varies significantly by community Healthcare also varies significantly by community and ethnic groups.and ethnic groups.


The IOM National Roundtable on Healthcare Quality The IOM National Roundtable on Healthcare Quality in 1998 concluded that “ in 1998 concluded that “ Serious and widespread Serious and widespread problems exist throughout American medicineproblems exist throughout American medicine. . These problems, which may be classified as These problems, which may be classified as underuse, overuse, or misuse, occur in small and underuse, overuse, or misuse, occur in small and large communities alike, in all parts of the country, large communities alike, in all parts of the country, and with approximately equal frequency in managed and with approximately equal frequency in managed care and fee-for-service systems of care. Very large care and fee-for-service systems of care. Very large numbers of Americans are harmed as a direct result. numbers of Americans are harmed as a direct result. Quality of care is the problem, not managed careQuality of care is the problem, not managed care. . Current efforts to improve will not succeed unless Current efforts to improve will not succeed unless we undertake a major, systematic effort to overhaul we undertake a major, systematic effort to overhaul how we deliver health care services, educate and how we deliver health care services, educate and train clinicians, and assess and improve quality.”train clinicians, and assess and improve quality.”

Comparison with Other CountiesComparison with Other Counties

The United States spends more money on health The United States spends more money on health care than any other country in the Organization for care than any other country in the Organization for Economic Cooperation and Development (OECD). Economic Cooperation and Development (OECD). The OECD consists of 30 democracies, most of The OECD consists of 30 democracies, most of which are considered the most economically which are considered the most economically advanced countries in the world. According to advanced countries in the world. According to OECD data, OECD data, the United States spent $6,102 per the United States spent $6,102 per capita on health care in 2004 — more than double capita on health care in 2004 — more than double the OECD averagethe OECD average. – . – CRS Report for Congress (2007).CRS Report for Congress (2007).

In two additional studies conducted by the In two additional studies conducted by the Commonwealth Fund, a healthcare think tank, the Commonwealth Fund, a healthcare think tank, the US health care system US health care system ranks last among other ranks last among other major rich countries for quality, access and major rich countries for quality, access and efficiencyefficiency..

Shortage of Healthcare Shortage of Healthcare WorkersWorkers

Shortage of Healthcare Shortage of Healthcare WorkersWorkers

The Council on Graduate Medical Education predicts The Council on Graduate Medical Education predicts that the nation is likely to experience a shortage of that the nation is likely to experience a shortage of 96,000 physicians 96,000 physicians by 2020 (2005).by 2020 (2005).

The Health Resources and Services Administration The Health Resources and Services Administration predicts that the national predicts that the national nursing shortage nursing shortage will top will top 800,000 by 2020 (2002).800,000 by 2020 (2002).

Other staff shortagesOther staff shortages are also expected, including are also expected, including Nuclear Medicine Technologists, MRI Technologists, Nuclear Medicine Technologists, MRI Technologists, Ultrasound Technologists, and Physician Assistants.Ultrasound Technologists, and Physician Assistants.

Only 2.5% of the graduating physicians are going into Only 2.5% of the graduating physicians are going into primary care practice.primary care practice.

CHANGING DEMOGRAPHICSCHANGING DEMOGRAPHICS

The Baby Boomers are RetiringThe Baby Boomers are Retiring

Changing DemographicsChanging Demographics

Every day in America, 10,068 people turn 50Every day in America, 10,068 people turn 50 There are now more people over 65 in our There are now more people over 65 in our

population than there are teenagerspopulation than there are teenagers The number of Americans over 65 is The number of Americans over 65 is

expected to double by 2030 to 65 million; 9 expected to double by 2030 to 65 million; 9 million will be over 85, compared with 4 million will be over 85, compared with 4 million today.million today.

The population aged 65 - 85 years is the fastest-The population aged 65 - 85 years is the fastest-growing age group in the United States. growing age group in the United States.

What is the impact on healthcare?What is the impact on healthcare?

Healthcare Requirements of SeniorsHealthcare Requirements of Seniors

86 percent of Medicare beneficiaries 86 percent of Medicare beneficiaries have one or more chronic conditionshave one or more chronic conditions

Add to this the fact that 16% of all Add to this the fact that 16% of all people over the age of 71 have a people over the age of 71 have a dementia and the challenges become dementia and the challenges become even more dramatic.even more dramatic.

A COMPLEX A COMPLEX HEALTHCARE SYSTEMHEALTHCARE SYSTEM

System of HealthcareSystem of Healthcare

Our reimbursement system does not encourage Our reimbursement system does not encourage prevention prevention

Our reimbursement system does not encourage the Our reimbursement system does not encourage the coordination of carecoordination of care

The US healthcare system is designed primarily to The US healthcare system is designed primarily to address emergency and acute care, yet:address emergency and acute care, yet:

75% of all healthcare costs arise directly from chronic 75% of all healthcare costs arise directly from chronic diseases (high blood pressure, diabetes, obesity, diseases (high blood pressure, diabetes, obesity, asthma, etc.)asthma, etc.)

System of HealthcareSystem of Healthcare

86% of Medicare beneficiaries have at least 1 chronic 86% of Medicare beneficiaries have at least 1 chronic disease.disease.

Americans with chronic diseases receive only about Americans with chronic diseases receive only about 56% of recommended treatment.56% of recommended treatment.

The direct medical and indirect cost of diabetes, for The direct medical and indirect cost of diabetes, for example accounts for $132 billion annually (10% of example accounts for $132 billion annually (10% of healthcare dollars & 45 million office visits).healthcare dollars & 45 million office visits).

McGlynn, et al, The Quality of Healthcare Delivered to Adults in the United States. NEJM McGlynn, et al, The Quality of Healthcare Delivered to Adults in the United States. NEJM 2003:348(26);2635-2645.2003:348(26);2635-2645.

COMPLEXITY & FAST PACE OF COMPLEXITY & FAST PACE OF SCIENTIFIC DISCOVERYSCIENTIFIC DISCOVERY

Complexity & the Fast Pace of Complexity & the Fast Pace of Scientific DiscoveryScientific Discovery

Every year 500,000 new healthcare articles Every year 500,000 new healthcare articles are publishedare published

The amount of (all) technical information is The amount of (all) technical information is doubling every 2 years.doubling every 2 years.

Four exabytes of unique information (4 x Four exabytes of unique information (4 x 10101919) will be generated this year. That is ) will be generated this year. That is more than the last 5,000 yearsmore than the last 5,000 years

Half of what students with a 4 year Half of what students with a 4 year technical degree learn will be out of date technical degree learn will be out of date before they graduatebefore they graduate

PATIENT DISEASE PATIENT DISEASE MANAGEMENT AND MANAGEMENT AND

COMPLIANCECOMPLIANCE

Patient Disease ManagementPatient Disease Managementand Complianceand Compliance

Patient Attitudes and Behavior:Patient Attitudes and Behavior:

Too many patients wait until they have developed an Too many patients wait until they have developed an illness to worry about healthcare and then there is the illness to worry about healthcare and then there is the attitude that they can simply take a pill and then attitude that they can simply take a pill and then continue their unhealthy lifestyle, including:continue their unhealthy lifestyle, including:– Non compliance with treatment interventionsNon compliance with treatment interventions– Poor diets & over eatingPoor diets & over eating– Lack of exerciseLack of exercise– SmokingSmoking– DrinkingDrinking– Risky activitiesRisky activities

Operational Challenges in the Operational Challenges in the Physician OfficePhysician Office


Michigan Primary Care Consortium conducted a needs assessment of the top obstacles to office efficiency:

•Problems with support staff•Poor reimbursement for services•Excessive paperwork•Prior authorization requirements•Lack of electronic medical records or difficulties transitioning to the EMR•Patients skipping appointments


In an article by Morrison and In an article by Morrison and Smith, BMJ 2000: 321:1541, Smith, BMJ 2000: 321:1541, they said “Across the globe they said “Across the globe physicians are miserable physicians are miserable because they feel like because they feel like hamsters on a treadmill. hamsters on a treadmill. They must run faster to just They must run faster to just stand still… The result of the stand still… The result of the wheel going faster is not only wheel going faster is not only a reduction in the quality of a reduction in the quality of care but also a reduction in care but also a reduction in professional satisfaction and professional satisfaction and an increase in burnout an increase in burnout among doctors.”among doctors.”

MEDICAL ERRORSMEDICAL ERRORS

IOM Report : To Err is HumanIOM Report : To Err is Human

At least 44,000 people, and perhaps as many as At least 44,000 people, and perhaps as many as 98,000 people, die in hospitals each year as a result 98,000 people, die in hospitals each year as a result of medical errors that could have been prevented, of medical errors that could have been prevented, according to estimates from two major studies. according to estimates from two major studies.

The problem is The problem is notnot bad people in health care bad people in health care – –

it is that good people are working in bad systems it is that good people are working in bad systems that need to be made saferthat need to be made safer..

“ “According to Dr. Deming, 85% of problems with According to Dr. Deming, 85% of problems with quality are due to the process and 15% the people.”quality are due to the process and 15% the people.”

Medical ErrorsMedical Errors

The average ICU patient experiences 1.7 medical The average ICU patient experiences 1.7 medical errors per day, nearly 1/3 of those are life-errors per day, nearly 1/3 of those are life-threatening. Most involve communication threatening. Most involve communication problems. - problems. - Robert Wachter, “The End of the Beginning: Robert Wachter, “The End of the Beginning: Patient Safety Five Years After “To Err is Human”.Patient Safety Five Years After “To Err is Human”.

According to IHI, there are some 37 million hospital According to IHI, there are some 37 million hospital admissions each year in the United States and 40 – admissions each year in the United States and 40 – 50 patient injuries for every 100 admissions. If 50 patient injuries for every 100 admissions. If those statistics are correct that translates into 15 those statistics are correct that translates into 15 million patient injuries every year.million patient injuries every year.

IOM Report : To Err is HumanIOM Report : To Err is Human

Beyond their cost in human lives, preventable Beyond their cost in human lives, preventable medical errors exact other significant tolls. They medical errors exact other significant tolls. They have been estimated to result in total costs have been estimated to result in total costs (including the expense of additional care (including the expense of additional care necessitated by the errors, lost income and necessitated by the errors, lost income and household productivity, and disability) of household productivity, and disability) of between between $17 billion and $29 billion per year $17 billion and $29 billion per year in in hospitals nationwide. (IOM To Err is Human: hospitals nationwide. (IOM To Err is Human: Building a Safer Health System, 1999)Building a Safer Health System, 1999)

Medical ErrorsMedical Errors

By way of comparison:By way of comparison:

If the 98,000 deaths per year due to If the 98,000 deaths per year due to iatrogenic causes is accurate - that is iatrogenic causes is accurate - that is equivalent to a jumbo-jet crash every equivalent to a jumbo-jet crash every day!day!

MEDICATION ERRORSMEDICATION ERRORS

Medication ErrorsMedication Errors

IOM estimates that IOM estimates that 1.5 million Americans a year 1.5 million Americans a year are injured are injured after receiving the wrong medication after receiving the wrong medication or the incorrect dose and that number is twice or the incorrect dose and that number is twice what it was a decade ago.what it was a decade ago.

Serious injuries associated with medication errors Serious injuries associated with medication errors reported to the Food and Drug Administration reported to the Food and Drug Administration increased from about 35,000 in 1998 to nearly increased from about 35,000 in 1998 to nearly 90,000 in 200590,000 in 2005..

Of those cases, more than 5,000 deaths were Of those cases, more than 5,000 deaths were reported in 1998 and reported in 1998 and 15,000 deaths in 200515,000 deaths in 2005. . Rong-Gong Lin II and Teresa Watanabe, “Hospital Rong-Gong Lin II and Teresa Watanabe, “Hospital Drug Errors Far From Uncommon, “Los Angeles Drug Errors Far From Uncommon, “Los Angeles Times, Feb. 15, 2008.Times, Feb. 15, 2008.


The extra medical costs of treating drug-related The extra medical costs of treating drug-related injuries occurring in hospitals alone conservatively injuries occurring in hospitals alone conservatively amount to amount to $3.5 billion a year$3.5 billion a year, and this estimate , and this estimate does not take into account lost wages and does not take into account lost wages and productivity or additional health care costs, the productivity or additional health care costs, the report says. The National Academies, IOM, 2006.report says. The National Academies, IOM, 2006.


The American Hospital Association lists these as some The American Hospital Association lists these as some common types of medication errors: common types of medication errors: – Incomplete patient information Incomplete patient information (not knowing about patients' (not knowing about patients'

allergies, other medicines they are taking, previous diagnoses, allergies, other medicines they are taking, previous diagnoses, and lab results, for example) and lab results, for example)

– Unavailable drug information Unavailable drug information (such as lack of up-to-date (such as lack of up-to-date warnings) warnings)

– Miscommunication of drug ordersMiscommunication of drug orders, which can involve poor , which can involve poor handwriting, confusion between drugs with similar names, misuse handwriting, confusion between drugs with similar names, misuse of zeroes and decimal points, confusion of metric and other of zeroes and decimal points, confusion of metric and other dosing units, and inappropriate abbreviations dosing units, and inappropriate abbreviations


– Lack of appropriate labeling Lack of appropriate labeling as a drug is prepared and as a drug is prepared and repackaged into smaller units repackaged into smaller units

– Environmental factorsEnvironmental factors, such as lighting, heat, noise, and , such as lighting, heat, noise, and interruptions, that can distract health professionals from their interruptions, that can distract health professionals from their medical tasks.medical tasks.

– Name confusion Name confusion is among the most common causes of is among the most common causes of drug-related errors, says Peter Honig, M.D., an FDA drug-related errors, says Peter Honig, M.D., an FDA expert on drug risk-assessment. A recent example: the expert on drug risk-assessment. A recent example: the sound-alike names for the antiepileptic drug Lamictal sound-alike names for the antiepileptic drug Lamictal and the antifungal drug Lamisil.and the antifungal drug Lamisil.

– Incorrect dosageIncorrect dosage, e.g. 100 mg instead of 100 ug , e.g. 100 mg instead of 100 ug

Pharmaceutical Co MarketingPharmaceutical Co Marketing


The “Research-based” pharmaceutical industry spends The “Research-based” pharmaceutical industry spends more on marketing and administration than it does on more on marketing and administration than it does on research and development. (research and development. (Families USA) )

Since 1995, R&D staff of U.S. brand name drug Since 1995, R&D staff of U.S. brand name drug companies have decreased by 2%, while marketing companies have decreased by 2%, while marketing staff have increased by 59%. Currently, 22% of staff staff have increased by 59%. Currently, 22% of staff are employed in research and development, while 39% are employed in research and development, while 39% are in marketing (are in marketing (PhRMA Industry Profile 2000; PhRMA Industry Profile 2000; percentages calculated by Sager and Socolar.percentages calculated by Sager and Socolar.


According to industry estimates, drug companies spent According to industry estimates, drug companies spent $15.7 billion dollars on promotion $15.7 billion dollars on promotion in 2000. $7.2 billion in 2000. $7.2 billion dollars worth of free samples were distributed that dollars worth of free samples were distributed that year (year (IMS HealthIMS Health).).

U.S. Drug spending U.S. Drug spending increased 17.1% increased 17.1% to $154.5 billion to $154.5 billion dollars in 2001. One-quarter of this increase was due dollars in 2001. One-quarter of this increase was due to a shift to the use of more expensive drugs. (to a shift to the use of more expensive drugs. (National Institute for Health Care Management) )


In a study by Avorn, et al., forty-six% of physicians In a study by Avorn, et al., forty-six% of physicians reported that reps are moderately to very important in reported that reps are moderately to very important in influencing their prescribing habits (influencing their prescribing habits (Am Journal of Med. Am Journal of Med. 1982).1982).

In a study by Lurie, et al., one-third of medical In a study by Lurie, et al., one-third of medical residents reported that they change their practice residents reported that they change their practice based on information provided by drug reps (based on information provided by drug reps (Journal of Journal of Gen Int Med., 1990).Gen Int Med., 1990).

A study by Chew, et al., found that in the treatment of A study by Chew, et al., found that in the treatment of hypertension, over 90% of physicians would dispense a hypertension, over 90% of physicians would dispense a sample that differed from their preferred drug choice. sample that differed from their preferred drug choice. ((JGIM, 2000JGIM, 2000).).

HEALTHCARE COSTSHEALTHCARE COSTS

Healthcare CostsHealthcare Costs

Each year the United States Each year the United States spends 2.5 trillion dollars on spends 2.5 trillion dollars on healthcarehealthcare

How much is that?How much is that?


How much is 1 billion dollars?How much is 1 billion dollars?

1 billion seconds ago it was 19591 billion seconds ago it was 1959 1 billion minutes ago Jesus was alive1 billion minutes ago Jesus was alive 1 billion hours ago our ancestors 1 billion hours ago our ancestors

were living in the stone age.were living in the stone age.


How much is 1 trillion dollars?How much is 1 trillion dollars? One trillion seconds = 30,000 yearsOne trillion seconds = 30,000 years 1 trillion dollars would purchase 5.7 million 1 trillion dollars would purchase 5.7 million

homeshomes 1 trillion $1,000 dollar bills stacked on top 1 trillion $1,000 dollar bills stacked on top

on each other would be 67 miles highon each other would be 67 miles high


Healthcare costs including hospitals and nursing Healthcare costs including hospitals and nursing homes homes increased by almost 300% increased by almost 300% from 1990 to from 1990 to 2005. 2005.

Healthcare costs are presently rising at about Healthcare costs are presently rising at about five five times the rate of overall inflationtimes the rate of overall inflation..

A Harvard study in 2005 concluded that half of all A Harvard study in 2005 concluded that half of all U.S. bankruptcy filers stated that medical U.S. bankruptcy filers stated that medical expenses led to their financial downfall and most expenses led to their financial downfall and most of them had health insurance. This was a 30-fold of them had health insurance. This was a 30-fold increase from a similar study conducted in 1981.increase from a similar study conducted in 1981.

Cost of MedicationsCost of Medications

In 2006, U.S. adult consumers spent $130.8 billion on five In 2006, U.S. adult consumers spent $130.8 billion on five therapeutic classes of prescription drugs. Expenditures on therapeutic classes of prescription drugs. Expenditures on metabolic agents (drugs to lower blood sugar, reduce metabolic agents (drugs to lower blood sugar, reduce cholesterol, or help with other metabolic problems) cholesterol, or help with other metabolic problems) ranked first at $38.1 billion, followed closely by ranked first at $38.1 billion, followed closely by cardiovascular agents (drugs for reducing high blood cardiovascular agents (drugs for reducing high blood pressure and treating heart conditions) at $33.1 billion. pressure and treating heart conditions) at $33.1 billion. The remaining three therapeutic classes that topped The remaining three therapeutic classes that topped expenditures were central nervous system agents ($28.2 expenditures were central nervous system agents ($28.2 billion), psychotherapeutic agents ($17.5 billion), and billion), psychotherapeutic agents ($17.5 billion), and hormones ($14.0 billion). These purchases accounted for hormones ($14.0 billion). These purchases accounted for 62.8 percent of the total 62.8 percent of the total $208.1 billion $208.1 billion spent on all spent on all prescribed drug medicines. —From prescribed drug medicines. —From Statistical Brief 232: Statistical Brief 232: The Top Five Therapeutic Classes of Outpatient Prescription Drugs Ranked by Total Expense for Adults Age 18 and Older in the U.S. Civilian Noninstitutionalized Population, 2006

Healthcare Costs for MedicationsHealthcare Costs for Medications

18.7%

11%

5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%P

rofi

t as

% r

even

ue

drug industry median profit as % revenueother industry median profit as % revenue

Healthcare InsuranceHealthcare Insurance

Medicare CostsMedicare Costs

Healthcare InsuranceHealthcare Insurance

PricewaterhouseCoopers reported that health PricewaterhouseCoopers reported that health benefit costs were expected to jump between benefit costs were expected to jump between 10.7 and 11.9 percent in 2007.10.7 and 11.9 percent in 2007.

Health insurance premiums increased an average Health insurance premiums increased an average of 11 percent per year from 2002 to 2007.of 11 percent per year from 2002 to 2007.

The average annual family health The average annual family health insurance insurance premium premium grew to $11,480 in 2006.grew to $11,480 in 2006.

In 2005, the number of In 2005, the number of Americans without health Americans without health insurance insurance rose by 1.3 million to 46.6 million or rose by 1.3 million to 46.6 million or 15.9 percent of the population.15.9 percent of the population.

IMPACT OF RISING IMPACT OF RISING HEALTHCARE COSTS ON HEALTHCARE COSTS ON

BUSINESSBUSINESS

Impact of Escalating Healthcare Impact of Escalating Healthcare Costs on EmployersCosts on Employers

Many companies with less than 25 employees Many companies with less than 25 employees have absorbed yearly premium increases of as have absorbed yearly premium increases of as much as 25 percent or more.much as 25 percent or more.

In response to increasing healthcare premiums, In response to increasing healthcare premiums, employers are shifting more of the burden for employers are shifting more of the burden for insurance coverage to the employee.insurance coverage to the employee.

The cost of healthcare in the U.S. is making The cost of healthcare in the U.S. is making American businesses extremely uncompetitive American businesses extremely uncompetitive versus our global competitors.versus our global competitors.

Dr. Deming criticized “excessive medical costs” Dr. Deming criticized “excessive medical costs” in his book, “Four Days with Dr. Deming” as one in his book, “Four Days with Dr. Deming” as one of his 7 Deadly Sins for business.of his 7 Deadly Sins for business.

Impact on the Automotive IndustryImpact on the Automotive Industry

The cost of healthcare for General Motors is The cost of healthcare for General Motors is approximately $6 billion annually.approximately $6 billion annually.

Healthcare costs add about $1,500 to the price of Healthcare costs add about $1,500 to the price of each car, twice as much as the cost of steel and each car, twice as much as the cost of steel and double the cost of labor.double the cost of labor.

In the latest sign of the deepening troubles, G.M. In the latest sign of the deepening troubles, G.M. reported a stunning second- quarter loss of $15.5 reported a stunning second- quarter loss of $15.5 billion because of a continuing fall in United billion because of a continuing fall in United States sales and charges for job cuts, plant States sales and charges for job cuts, plant closings and the falling value of trucks and sport closings and the falling value of trucks and sport utility vehicles (New York Times, August 2, 2008).utility vehicles (New York Times, August 2, 2008).

That followed a loss of $8.7 billion reported by That followed a loss of $8.7 billion reported by Ford. Overall sales fell by 13 percent in July (New Ford. Overall sales fell by 13 percent in July (New York Times, August 2, 2008). York Times, August 2, 2008).

Can Quality Management Make a Can Quality Management Make a Difference?Difference?

In contrast to U.S. auto manufacturers, Toyota In contrast to U.S. auto manufacturers, Toyota was nearly bankrupt in 1949. By implementing was nearly bankrupt in 1949. By implementing what has become know as the Toyota Production what has become know as the Toyota Production System (TPS) they have become the benchmark System (TPS) they have become the benchmark by which American Automotive companies are by which American Automotive companies are measured. measured.

Today, Toyotas’ solid growth could put it ahead of Today, Toyotas’ solid growth could put it ahead of General Motors as the world's No. 1 automaker. General Motors as the world's No. 1 automaker.

They reported a 34% rise in profit for the quarter They reported a 34% rise in profit for the quarter ended Dec. 31,2008 as sales jumped in North ended Dec. 31,2008 as sales jumped in North America and Asia. (USA Today, January 2, 2008).America and Asia. (USA Today, January 2, 2008).

Is Nationalized Healthcare the Is Nationalized Healthcare the Answer?Answer?

The question is, can we afford it?The question is, can we afford it?

Can government manage healthcare as Can government manage healthcare as well as they did the banking industry?well as they did the banking industry?

Current Economic Climate is Current Economic Climate is QuestionableQuestionable

Federal debt has increased exponentially in Federal debt has increased exponentially in last decade. In 2007 it was around last decade. In 2007 it was around $9,000,000,000,000 or $30,000 per person.$9,000,000,000,000 or $30,000 per person.

That number has grown substantially in 2008 That number has grown substantially in 2008 and continues 2009and continues 2009

Federal spending shows no signs of slowing. Federal spending shows no signs of slowing.

More “Good News”More “Good News”

Baby boomers are retiring Baby boomers are retiring and will begin to draw on and will begin to draw on Social Security, Medicare and Medicaid all of which are Social Security, Medicare and Medicaid all of which are headed for a deficit position headed for a deficit position

The The ratio of 20 to 64 year olds is decreasing ratio of 20 to 64 year olds is decreasing so there so there will be fewer workers to support the retired baby will be fewer workers to support the retired baby boomersboomers

Additionally, the Additionally, the savings rate of Americans is the savings rate of Americans is the lowest it has been in history lowest it has been in history and these numbers were and these numbers were recorded before the stock market crash, real estate recorded before the stock market crash, real estate bubble burst and the meltdown of the financial bubble burst and the meltdown of the financial markets.markets.

Social Security Administration Social Security Administration predicts deficitpredicts deficit

The annual report from Social Security's Board of The annual report from Social Security's Board of Trustees outlining the financial status of the Social Trustees outlining the financial status of the Social Security program was released March 17, 2007. Security program was released March 17, 2007. Michael Tanner, director of the Cato Institute's Project Michael Tanner, director of the Cato Institute's Project on Social Security Choice, says: on Social Security Choice, says:

"This year's report reinforces what we already know: "This year's report reinforces what we already know: that Social Security faces that Social Security faces massive long-term deficitsmassive long-term deficits and needs to be reformed, and the sooner the better. and needs to be reformed, and the sooner the better. With each passing year Social Security's multi-trillion With each passing year Social Security's multi-trillion dollars deficits increase and the cost of fixing the dollars deficits increase and the cost of fixing the system rises." system rises."

OASI ASSETS AS A PERCENT OF OASI ASSETS AS A PERCENT OF ANNUAL EXPENDITURESANNUAL EXPENDITURES

Associated Press, Mon., Jan. 30, 2006 Associated Press, Mon., Jan. 30, 2006

WASHINGTON – “Americans’ personal savings rate dipped WASHINGTON – “Americans’ personal savings rate dipped into negative territory in 2005, something that hasn’t into negative territory in 2005, something that hasn’t happened since the Great Depression. Consumers depleted happened since the Great Depression. Consumers depleted their savings to finance the purchases of cars and other their savings to finance the purchases of cars and other big-ticket items.”big-ticket items.”

Questions and Questions and CommentsComments

welcome to the first annual asq cincinnati

Economy & Finance

healthcare systemperceptions

healthcare system government

healthcare deliverythe

healthcare delivery

peoplemedical care

harmedof care

notquality of care

caremanaged care