Transforming into a high reliability

organization in health care

Transforming into a high reliability organization in health care

Introduction

US health care is in the midst of a major

transformation, evolving from a financial model
HROs are
that pays for volume to one that pays for value and entities which
outcomes. With the introduction of the Medicare
Access and CHIP Reauthorization Act of 2015 are exceptionally
(MACRA), traditional fee-for-service (FFS) payments
for physicians and other provider professionals are
consistent at
being replaced with risk-bearing business models accomplishing
and financial incentives that reward health care
providers for improved patient outcomes and their goals,
reduced costs.
avoiding potentially
Quality improvement, a core tenet in this transition catastrophic errors
to value-based care (VBC), has been a long-standing
focus in US health care, starting with the creation in an environment
of Medicare in the 1960s and later driven by
organizations such as The Joint Commission and the
where normal
Institute of Medicine (IOM) (see Milestones in US accidents can be
health care quality). The late 1990s and early 2000s,
in particular, marked the beginning of a focus on expected due
improving outcomes through the delivery of higher-
quality health care.1 Over the past 20 years, this
to risk factors
movement has evolved further, with increasing and complexity,
numbers of health care provider organizations
starting the journey toward becoming a high and delivering
reliability organization (HRO) that delivers quality
care effectively, efficiently, and predictably. For
consistently safe
many, though, the destination remains far ahead. and high-quality
Although it may take considerable time and effort to
get there, this paper lays out a path for health care service.
organizations that wish to embark on the journey.

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Transforming into a high reliability organization in health care

Milestones in US health care quality improvement

Early Quality Improvement Efforts in the Advent of Medicare – The creation of Medicare
in the 1960s not only aimed to improve access to health care but was a first step toward
introducing and mandating quality control mechanisms across the industry, such as utilization
review committees within health care systems, Professional Standards Review Organizations
(PSROs), and ultimately Peer Review Organizations (PROs). Concurrently with the development
of Medicare and increased focus on quality, in 1966, Dr. Avedis Donabedian created the first
conceptual framework for measuring quality in health care by publishing “Evaluating the Quality
of Medical Care.” This subsequently led to the establishment of the Institute of Medicine (IOM) in
1970 by the National Academies of Science. The development of the IOM accelerated the focus
for quality in health care, as the organization has launched numerous efforts on evaluating,
informing, and improving the quality of health care for the past 50 years.2

To Err is Human: Building a Safer Health System – With the emergence of numerous quality
organizations throughout the 1980s, including the creation of the Agency for Health Care
Policy and Research in 1989, currently known as the Agency for Healthcare Research and
Quality (AHRQ), the focus on quality was at the forefront of health care.3 In November 1999,
the IOM released a report designed to increase awareness of US medical errors. Concluding
that the know-how already exists to prevent many of these mistakes the report recommends
a four-tiered approach by which government, health care providers, industry, and consumers
can reduce preventable medical errors:4 1) Establishing a national focus to create leadership,
research, tools, and protocols to enhance the knowledge base about safety; 2) Identifying and
learning from errors by developing a nationwide public mandatory reporting system and by
encouraging health care organi¬zations and practitioners to develop and participate in voluntary
reporting systems; 3) Raising performance standards and expectations for improvements
in safety through the actions of oversight organizations, professional groups, and group
purchasers of health care; 4) Implementing safety systems in health care organizations to ensure
safe practices at the delivery level.5

Crossing the Quality Chasm: A New Health System for the 21st Century6 – This 2001 report
from the IOM’s Committee on the Quality of Health Care in America states that bringing state-of-
the-art care to all Americans in every community will require a fundamental, sweeping redesign
of the entire health system.7 The report makes an urgent call for changes to close the quality gap
and provides overarching principles for specific direction for policymakers, health care leaders,
clinicians, regulators, purchasers, and others.8

Medicare and the CMS Innovation Center – The Centers for Medicare and Medicaid Services
(CMS) has played a critical role in driving the shift to a quality focus over the past few years,
marked most recently by the introduction of the Medicare Access and CHIP Reauthorization
Act of 2015 (MACRA), a payment law that will drive major health care payment and delivery
system reform for clinicians, health systems, Medicare, and other government and commercial
payers. The law establishes a path towards a new payment system that will more closely align
reimbursement with quality and outcomes. The first performance reporting period under the
law began January 1, 2017.9

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Transforming into a high reliability organization in health care

The journey to consistent health care quality

The US health care system’s long-held FFS payment model reimburses professionals based
on a narrow set of regulatory or reimbursement incentives for discrete activities, such as Delivering
a doctor’s visit, with no compensation for coordination across the care continuum. This
payment system encourages delivery of high cost/high margin services and discourages
delivery of lower margin services or coordination of care. These incentives can lead to rising
quality
costs as well as inefficient delivery and potentially poor quality of care, such as adverse
events, medical errors, and infections, among others. In the FFS model, since physicians and health care
hospitals are rewarded based on the volume of patients treated rather than outcomes, there
is minimal incentive to maximize patient outcomes or contain costs.
consistently
In an effort to address this issue, the US health care system is currently undergoing a
fundamental shift in its business model, moving from volume- to value-based care (VBC) and reliably will
with a focus on quality and outcomes. Many VBC incentives and penalties rely on quality
measures. Thus, delivering quality health care consistently and reliably will be the key to
succeeding in a value-based environment. Other drivers to improve health care quality
be the key to
include:10
succeeding in
Transparency. Governing bodies and educated consumers are demanding
increased transparency into medical errors and quality measures.11 In response,
hospitals are more frequently releasing data-driven reports illustrating their
a value-based
commitment to quality and safety.
environment.
Information. Hospitals are leveraging health information technology (HIT)12 to
more accurately monitor care and evaluate outcomes. Automated reports have
improved convenience, but also have resulted in new complexities and actually
decreased efficiency in some areas.

Tools and methodologies. Quality improvement methodologies (e.g., Six Sigma,

Lean)13 are increasingly being applied in hospital settings. However, there remains a
lack of widespread industry adoption.

Despite financial, clinical, and technology drivers – and dedicated efforts at many levels
– the health care industry generally struggles to achieve widespread, consistent quality
improvement. As noted by Mark Chassin, President of The Joint Commission, “It’s clear that
we’ve made progress in a number of areas, in reducing healthcare-associated infections, for
example. But we still have very serious quality problems, partly because the goal posts keep
moving… what constituted high quality 10 years ago is not the same as what constitutes high
quality today. It’s a constant state of activity to increase safety and quality.”14

One answer to providing consistent, widespread quality in health care already exists in
other industries: Become an HRO. HROs are entities which are exceptionally consistent
at accomplishing their goals, avoiding potentially catastrophic errors in an environment
where normal accidents can be expected due to risk factors and complexity, and delivering
consistently safe and high-quality service.

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Transforming into a high reliability organization in health care

Traditional HROs include airlines, nuclear power plants, chemical These elements serve as foundational principles for developing a
processing, military operations, and firefighting crews.15 Among strategy focused on high reliability and support the four strategic
defining characteristics, HROs rarely have errors; they have been pillars (Figure 1):
highly successful in honing their abilities to act reliably and handle
adversity.16 In addition, HROs prize the identification of “near misses” • Stakeholder engagement. Leaders serve as champions of
as an opportunity to extract lessons, analyze what occurred, and quality, establishing it as a priority imperative for the entire
adjust protocols or procedures to reduce future risk.17 organization. Other stakeholders should be empowered to own
quality efforts, which should be tracked and monitored to enforce
Structurally, HROs typically are based on six foundational elements:18 accountability.

1. Sensitivity to operations. HROs work quickly to identify • Continuous improvement. Quality improvement methodologies
anomalies, problems in their system, and potential errors to should be supported and reinforced through well-defined tools
reduce the number of actual errors. and practices. Efforts should be executed with consistency
and rigor. Organizations should strive for excellence by establishing
2. Reluctance to simplify. HROs avoid overly simple explanations standards and continuously enhancing the approach to quality.
of failure. This does not mean that HROs do not work to simplify
processes as much as possible; rather, they do not attribute • Learning organization. Understanding of quality improvement
failure to a singular cause. should be enterprise-wide, as well as customized for competency
at each function and level. Organizations should develop a
3. Preoccupation with failure. HROs are focused on predicting universal culture of learning in which knowledge is respected
and eliminating catastrophes rather than reacting to them. “Near and shared.
misses” are viewed as opportunities to improve current systems.
• Prioritization and coordination. Initiatives should be evaluated
4. Deference to expertise. HROs cultivate a culture in which for alignment with strategic goals and prioritized accordingly.
team members and organizational leaders defer to the most Resources should be dedicated to areas with the greatest impact
knowledgeable – not the most senior or experienced – person and least amount of disruption. Data and reports should be
relevant to the issue at hand. meaningfully communicated across all stakeholders.

5. Resilience. HROs pay close attention to their ability to quickly

contain errors and improvise when difficulties occur so that
systems are resilient and can function despite setbacks.

6. Collective mindfulness. “Operating ‘mindfully” and making

critical adjustments in a timely manner to manage the
unexpected in a challenging, highly competitive environment”19
creates a culture of safety and sustains highly reliable systems.
Collective mindfulness also provides a mental orientation that
enables continuous learning and evaluation by allowing leaders
at all levels to consistently identify potential errors or unsafe
conditions before they pose substantial risk.

5
Transforming into a high reliability organization in health care

These pillars emphasize the avoidance of errors and promotion of quality as

primary objectives through cohesiveness, consistency, and pursuit of perfection.
Although achievement of perfection may seem all but impossible in organizations
as complex as health systems, it is the very act of striving to reach that high level of
execution which can allow an organization to attain excellence. The strategic pillars
represent critical factors for transforming the way a system approaches processes
and can further enable employees to champion change across departments and
functions. The pillars provide an organization with a refreshed framework for
delivering services in a more highly reliable manner, guided by engaged leadership,
evidence-based practice, and harmonized objectives.

Figure 1. Elements of an HRO in health care

High
reliability organization

Stakeholder Continuous Learning Prioritization &

engagement improvement organization coordination

Champions & Enhanced Organization-wide Filtering &

leadership methodology & education prioritization
Strategic pillars

data reliability of projects

Ownership Consistent & Tiered curricula Evaluation of

rigorous execution initiative impact
& disruption

Accountability Striving for Culture of learning Focused

excellence communications

Sensitivity to Preoccupation with

Foundational

Reluctance to
elements

operations simplify failure

Deference to Collective
Resilience
expertise mindfulness

© 2017 Deloitte Development LLC. All rights reserved.

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Transforming into a high reliability organization in health care

Critical success factors

Simply adopting an HRO structure is not enough to transform a hospital or health care system into a true HRO. This effort typically requires a
multidisciplinary approach as well as cultural change.

Category Critical success factor Related HRO elements Description/example

Multi- Align the need for quality with the • Sensitivity to operations, • Incorporate quality considerations
disciplinary overall strategic, operational, and Reluctance to simplify into business decisions and resource
approach financial goals of the organization • Preoccupation with failure allocation
• Collective mindfulness
Involve all impacted stakeholders • Reluctance to simplify • Recruit buy-in across clinical and
in the planning and development • Deference to expertise nonclinical facilities, functions,
phase • Resilience departments, levels, and teams
• Collective mindfulness to effectively take initiatives from
concept to fruition
• Secure physician engagement and
employ them as champions of
transformation by emphasizing that
changes will not negatively impact
efficiency and productivity
Choose culturally contextual • Sensitivity to operations • Two health systems successfully
solutions that are appropriate to • Reluctance to simplify reduced medication dispensing
your specific organization and that will • Resilience errors with two different approaches.
most effectively impact behaviors Interruptions were reduced by:
1. Distributing dispensing machines
farther apart on unit floors and
marking them off with red tiles20
2. Requiring nurses to wear
bright yellow sashes as an
indication that they should
not be distracted21
Cultural Communicate the future-state • Sensitivity to operations • Create a governance structure which
transformation goal of developing overall quality • Preoccupation with failure includes high reliability as a focus
infrastructure with system-wide • Collective mindfulness and establish a regular basis of
participation touchpoints to provide updates and
seek executive support
Demonstrate that it is okay to • Sensitivity to operations • Develop incentives that appropriately
make errors as long as they can be • Preoccupation with failure reward active pursuit of the
learned from and corrected • Resilience, Collective mindfulness achievement of high reliability
• Emphasize that individual mistakes
can provide excellent learning
experiences, and ensure systems
are in place that will minimize
catastrophic error
Empower employees to • Sensitivity to operations • In manufacturing, a technique called
proactively solve problems to • Preoccupation with failure “Stop the Line” is used to identify
provide the best patient care possible • Deference to expertise and correct inefficiencies as soon
• Collective mindfulness as possible by enabling employees
to take action when they observe
defects in the process

Importantly, embracing quality improvement is not necessarily synonymous with making significant technology investments22 or system
overhauls. Rather, quality can be embraced in big and small ways. Organizations frequently find that simplifying processes and reducing the
number of handoffs can be the key to eliminating errors.

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Transforming into a high reliability organization in health care

Expect challenges along the way

All organizations pursuing high reliability are likely to
face complex environmental challenges but health • Individual patients react differently to medications,
care provider organizations often have their own set procedures, and therapies, so care cannot be
of issues. standardized in the same way that processes in
other industries with high reliability can, such as
• Many health care organizations are highly hierarchal, airlines and power plants. Also, patients’ behavior
deferential to roles, and slow to change – all of which can vary and change over time, especially if they
can compromise quality.23 Leaders may be hesitant are trying to manage a chronic condition, creating
to take on departments that are resistant to new unpredictability and challenges unmatched in other
processes. industries.27

• Staff may perceive conflicting messages regarding • While HROs aim to prevent and recognize errors
priorities of accommodating physicians, satisfying early to avoid them in the future, hospitals often
patients, and achieving financial goals.24 take a retrospective review of quality and, at times,
tolerate poorly designed or ineffective approaches
• A lack of clearly defined and communicated to quality.28
expectations and accountabilities for adopting
evidence-based practices, as well as a lack of • Given the rapid pace of change and competitive
incentives for implementation, may limit physician pressures, health care organizations are often
participation and physician leadership.25 challenged to maintain focus on process
improvement efforts. Redirecting organizational
• Establishing effective training programs and effort and resources to other goals may impede the
requirements to focus on evidence-based clinical progress to becoming an HRO.
practice and continuing education on the science
of improvement can be costly and seen as
burdensome to employees and physicians who
already have time constraints. In addition, hospitals
and health systems often have high turnover
rates and less intact teams, making training and
standardization critical yet challenging.26

• Analytic resources may not have the capacity or

the appropriate technology required to respond to
all requests for the quality program and produce All organizations pursuing
high reliability are likely to
higher-level analytics (beyond reporting alone)
without system-level leadership and support.

face complex environmental

challenges but health care
provider organizations often
have their own set of issues.

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Transforming into a high reliability organization in health care

Smart first steps

What strategies and capabilities do hospitals and health systems need to begin to overcome these challenges?
The following smart first steps can guide their journey to becoming HROs:

• Commit to a goal: Evaluate organizational priorities and develop vision statements and guiding principles
to establish a quality-focused culture built upon the foundations and pillars of high reliability, and ensure key
stakeholders understand the importance and rationale for embracing these principles.

• Embrace the leadership challenge: Ensure leadership understands and embodies the principles and
tenets of high reliability, taking a “top-down and bottoms up” approach to quality and patient safety.
Demonstrate strong leadership and an approach to quality and patient safety that is pervasive at all levels of
the organization.

• Develop and support champions: Begin to engage stakeholders early and often through creation of quality
champion change agents that help other stakeholders embrace these approaches and concepts.

• Establish governance: Design a governance and oversight structure and system to manage and own quality
improvement within the organization.

• Train for excellence: Educate key stakeholders and develop a quality-focused curriculum, emphasizing the
importance of ongoing and continuous learning at all levels. Adopt robust process-improvement tools and
procedures to achieve sustainable high reliability.

• Develop and use information: Gather, aggregate, and analyze available data and train others to understand,
interpret, and identify actionable insights that help guide the organization and contribute to continuous quality
improvement.

• Promote a culture of improvement: Reinforce “systemness” through effective communication and

messaging to encourage information-sharing and global problem-solving. Promote a culture of openness
through team check-ins or executive walk-arounds, and empower staff to challenge questionable or
inappropriate behaviors.29

• Learn early and often: Consider the complexities of each situation to properly understand what happened
and/or will happen in the future.30 In addition, procure accurate and complete information about a given
situation and use it to guide decision making31

• Proactively address risk: Address any error of system breakdown as a high priority despite the magnitude
of the issue, and act quickly based on observed data points.32 Remain resilient and nimble despite errors and
demonstrate the ability to avoid failure over time.33

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Transforming into a high reliability organization in health care

Case Study: Health system adopts

HRO structure and principles

Issue: Deloitte worked with a mid-sized regional health system to design

a future-state sustainable quality improvement strategy aligning clinical,
operational, and financial elements to achieve excellence.

Solution: We worked with our client to build the structure, philosophies,

and principles of an HRO, and tested the new framework via two quality
improvement initiatives around orthopedics and obstetrics. These specialties
were chosen because they were high volume and high growth areas and
because these specialties have relatively well-defined care pathways. We
focused on:

• Improved process development: One consistent methodology for

improvement efforts across the entire enterprise, including tools, forms,
and details to support adoption

• Organizational planning: Detailed job descriptions, committee charters,

and clear roles and responsibility mappings to support future-state
improved quality organization and governance

• Communication planning: A consolidated, streamlined communication

plan to not only support change efforts, but serve as a vehicle for ongoing
communication around quality

• Education: Development of detailed curricula and education materials to

support the designed, tiered quality education structure

• Data management and technology: Identification of technology and

management needs in order to support an effective quality program

• Improved application and execution: Standardized practices and

protocols for orthopedics and obstetrics to enhance quality and reduce
clinical variation

Impact: Deloitte helped guide the transformational change necessary to

truly focus on quality improvement. Once the structures and philosophies
were in place, we were able to test this approach with initiatives for
orthopedics and obstetrics. Using literature to identify leading practices,
data analytics around actual costs, volumes, outcomes, and length of stay,
and perspectives from multidisciplinary teams from across the patient care
continuum, we helped the organization design future-state processes with
an eye towards increased quality and efficiency. Once the initiatives were
identified, the teams had work plans and other tools designed by Deloitte
already in place to aid in prioritization, implementation, and tracking of
progress towards goals. This approach, coupled with setting clear metrics
for success, helped ensure the greatest degree of predictability in results.
The framework for high reliability was put into practice in a way that was
sustainable for the organization to maintain and advance going forward.

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Transforming into a high reliability organization in health care

This journey’s end is just the beginning

Health care is, and is expected to remain, a highly complex, high-risk industry. The quest to
deliver consistently safe and high-quality patient care – especially in the face of changing
reimbursement models, clinical innovations, and technology advancements – means that
the end of a provider’s journey to become a high reliability organization is really just the
beginning of institutionalizing quality across all departments, employees, and processes.
Such a transformative change cannot be accomplished simply by increasing funding for
ongoing quality measurement and reporting activities. Instead, health care organizations
will likely need to fundamentally change their approach to quality by embracing a cultural
paradigm shift, engaging all stakeholders at all levels, and valuing the expertise that
individuals bring.

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Transforming into a high reliability organization in health care

Authors
Ken Abrams, MD Mark Snyder, MD Alison Rotondo Ellen Lesser
Managing Director Specialist Executive Senior Consultant Business Analyst
Deloitte Consulting LLP Deloitte Consulting LLP Deloitte Consulting LLP Deloitte Consulting LLP
kabrams@deloitte.com msnyder@deloitte.com alrotondo@deloitte.com ellesser@deloitte.com

References
1. Chassin, Mark R. and Loeb, Jerod M. “High-Reliability Health Care: Getting There from Here.” The Joint Commission, 2013.
2. Marjoua, Youssra and Bozic, Kevin J. “Brief history of quality movement in US healthcare.” Curr Rev Musculoskelet Med. 2012 Dec; 5(4):
265–273. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3702754/
3. Marjoua, Youssra and Bozic, Kevin J. “Brief history of quality movement in US healthcare.” Curr Rev Musculoskelet Med. 2012 Dec; 5(4):
265–273. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3702754/
4. “To Err is Human: Building a Safer Health System.” Institute of Medicine, 1999. http://nationalacademies.org/hmd/~/media/Files/
Report%20Files/1999/To-Err-is-Human/To%20Err%20is%20Human%201999%20%20report%20brief.pdf
5. Ibid.
6. Institute of Medicine. 2001. Crossing the Quality Chasm: A New Health System for the 21st Century. Washington, DC: The National
Academies Press. https://doi.org/10.17226/10027
7. Ibid.
8. Ibid.
9. “MACRA: Disrupting the health care system at every level.” Deloitte Center for Health Solutions, 2016. https://www2.deloitte.com/us/en/
pages/life-sciences-and-health-care/articles/macra.html
10. “Becoming a High Reliability Organization: Operational Advice for Hospital Leaders.” AHRQ, April 2008.
11. Ibid.
12. Ibid.
13. Ibid.
14. “We still have very serious quality problems.” Modern Healthcare, January 9, 2016. http://www.modernhealthcare.com/article/20160109/
MAGAZINE/301099952
15. Chassin, Mark R. and Loeb, Jerod M. “High-Reliability Health Care: Getting There from Here.” The Joint Commission, 2013.
16. Ibid.
17. “Becoming a High Reliability Organization: Operational Advice for Hospital Leaders.” AHRQ, April 2008.
18. Ibid.
19. Weick, Karl E. and Sutcliffe, Kathleen. “Managing the Unexpected: Resilient Performance in an Age of Uncertainty.” 2001.
20. “Becoming a High Reliability Organization: Operational Advice for Hospital Leaders.” AHRQ, April 2008.
21. McCreary, Lew. “Kaiser Permanente’s Innovation on the Front Lines.” Harvard Business Review, 2010.
22. “Becoming a High Reliability Organization: Operational Advice for Hospital Leaders.” AHRQ, April 2008.
23. Chassin, Mark R. and Loeb, Jerod M. “High-Reliability Health Care: Getting There from Here.” The Joint Commission, 2013.
24. Ibid.
25. Ibid.
26. Ibid.
27. Ibid.
28. Ibid.
29. Becoming a High Reliability Organization: Operational Advice for Hospital Leaders.” AHRQ, April 2008.
30. Chassin, Mark R. and Loeb, Jerod M. “High-Reliability Health Care: Getting There from Here.” The Joint Commission, 2013., Marjoua, Youssra
and Bozic, Kevin J. “Brief history of quality movement in US healthcare.” Curr Rev Musculoskelet Med. 2012 Dec; 5(4): 265–273. https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC3702754/
31. Marjoua, Youssra and Bozic, Kevin J. “Brief history of quality movement in US healthcare.” Curr Rev Musculoskelet Med. 2012 Dec; 5(4):
265–273. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3702754/
32. Chassin, Mark R. and Loeb, Jerod M. “High-Reliability Health Care: Getting There from Here.” The Joint Commission, 2013., Marjoua, Youssra
and Bozic, Kevin J. “Brief history of quality movement in US healthcare.” Curr Rev Musculoskelet Med. 2012 Dec; 5(4): 265–273. https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC3702754/
33. “Becoming a High Reliability Organization: Operational Advice for Hospital Leaders.” AHRQ, April 2008.

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