I listened to a presentation on management accounting this weekend. It was a report on an analysis of risk management practices in businesses that operate in risk sensitive areas. These included banks, insurance, healthcare, aviation, and petroleum businesses. Most of the analysis was issues unrelated to healthcare. But, the following caught my eye as healthcare related:
Red flag warning issues:
- Having a target orientation for operations. The example here was the British NHS. It set targets for various metrics and the NHS staff were managed to meet those targets. The result was significant patient harm. The methods used to meet targets were chosen to maximize success meeting targets, not success in helping patients.
- Using spreadsheets, especially risk registers. Wholistic data gatering, measurement uniformity, and process analysis worked better. Spreadsheets were a strong negative indicator.
A positive indicator and counter agent for red flags:
- Systemic analysis for critical moments:
- When and where do risk decisions take place?
- When and where do risk actions take place?
- Who is involved?
- What information is available at that time?
- How can the who, what, where, when be changed to reduce resulting risk?
Critical moments are those times where behavior has an immediate and direct affect on the risk situation. Examples range from call center response to problem reports to loan application interviews.
One of the problematic NHS target driven behaviors was prioritization of dispatch for ambulances. The goal was to have an ambulance arrive within 15 minutes of a call. This was optimized by dropping dispatch priority when arrival was over 15 minutes late. These late calls would be postponed in favor of new calls. It's not optimum for patients, but it optimizes for meeting the target goal. This kind of counterproductive behavior is very widespread when targets are used in management. It's not a problem unique to healthcare, but it's one that definitely affects healthcare.