123
Chapter 15
Total Quality Management
and the Malcolm Baldrige
Quality Award
Lawrence (Larry) Dux
Brief Background
e healthcare industry has long recognized that patient care quality and safety is paramount and
healthcare organizations incorporate these concepts into their mission, vision, and value state-
ments. e following sample mission and/or vision statements from two recent Malcolm Baldrige
Award Winners reect this commitment to quality and safety.
Henry Ford Health System—Detroit, Michigan
Mission Statement: To improve human life through excellence in the science and art of health
care and healing.
Vision: Transforming lives and communities through health and wellness—one person at
a time.
Contents
Brief Background .................................................................................................................... 123
Henry Ford Health System—Detroit, Michigan ................................................................. 123
Sharp HealthCare—San Diego, California ......................................................................... 124
Healthcare Quality from a Process and Systems Perspective ..................................................... 124
Malcolm Baldrige National Quality Award Criteria ................................................................. 127
Summary ................................................................................................................................. 128
Endnotes ................................................................................................................................. 128
124 ◾ Lawrence (Larry) Dux
Values: We serve our patients and our community through our actions that always demon-
strate: Each Patient First, Respect for People, High Performance, Learning and Continuous
Improvement, and a Social Conscience.
1
Sharp HealthCare—San Diego, California
Mission Statement: To improve the health of those we serve with a commitment to excellence
in all that we do. Sharp’s goal is to oer quality care and services that set community stan-
dards, exceed patients’ expectations, and are provided in a caring, convenient, cost eective
and accessible manner.
Vision Statement: Sharp will redene the health care experience through a culture of caring,
quality, service, innovation, and excellence. Sharp will be recognized by employees, physi-
cians, patients, volunteers, and the community as: the best place to work, the best place to
practice medicine, and the best place to receive care. Sharp will be known as an excellent
community citizen embodying an organization of people working together to do the right
thing every day to improve the health and well-being of those we serve. Sharp will become
the best health system in the universe.
Core Values: Integrity, Caring, Innovation, Excellence.”
2
While these mission, vision, and value statements reect the organizational commitment to
the quality and safety of patient care, the Institute of Medicine’s 2000 landmark report To Err
is Human: Building a Safer Health System highlighted the fact that there are between 44,000
and 98,000 deaths annually in hospitals due to medical errors.
3
is report identied that the
healthcare system itself was between the fth and ninth leading cause of death in the United
States. e conclusion from this report was that while there had been signicant improvements
in the technological aspects of healthcare delivery in the United States, there were still chal-
lenges in the creation of a well- coordinated healthcare system that could systematically address
the problems associated with the underuse of benecial services, overuse of procedures that
are not medically necessary, and mistakes that lead to patient injury. is chapter will provide
insight on how the healthcare industry has adapted the concepts and tools of Total Quality
Management and the framework of the Malcolm Baldrige Award
4
to address these problems
(see Figure15.1).
Healthcare Quality from a Process and Systems Perspective
e early work of individuals such as W. Edwards Deming, Walter Shewhart, and Joseph M.
Juran introduced the world to the science of quality improvement, and while their initial work
focused on the manufacturing sectors, the healthcare industry has been able to learn from and
adapt the methodologies and tools that were originally developed in the 1940s and 1950s in Japan
and the United States. W. Edwards Deming contributed his fourteen key principles to manag-
ers for transforming business eectiveness. e points were rst presented in his book Out of the
Crisis in 1986 and revised in 1990 (see Table15.1).
5
Although Deming does not use the term in his
book, it is credited with launching the Total Quality Management movement. Walter Shewhart is
best known for his work in the use of statistical process control (SPC) charts and the concepts of
Total Quality Management and the Malcolm Baldrige Quality Award ◾ 125
common cause and special cause variation. e Shewhart Cycle, which has been widely adopted
in healthcare, is commonly referred to as the PDSA (Plan, Do, Study, Act) cycle. Joseph M. Juran
taught us the importance of using a project-by-project, problem-solving, team method of quality
improvement in which all levels of management must be involved—Total Quality Management.
e Juran Trilogy
6
identies the three processes necessary to manage quality.
Joseph M. Juran was a vocal advocate for the Malcolm Baldrige National Quality Award
program. Prior to the passage of the congressional act that created the Baldrige Award in 1987, he
testied in front of Congress on behalf of creating the award to help bring the focus of quality to
the United States. He was also one of the original overseers of the Baldrige Award process.
7
e approaches and tools created and used by these individuals formed the foundation for
what is now referred to as Total Quality Management (TQM), where TQM is broadly dened
as a management philosophy and process focused on committing organizational resources in an
environment of teamwork and collaboration to meeting and/or exceeding customer expectations
at a cost that represents value to the customer.
e rst key point of this denition is that the senior management of the organization must
provide the leadership to embrace this management philosophy, or as stated in the denition of
visionary leadership within the Malcolm Baldrige criteria: “Your leaders should ensure the creation
of strategies, systems, and methods for achieving performance excellence in health care, stimulat-
ing innovation, building knowledge and capabilities, and ensuring organizational sustainability.
e dened values and strategies should help guide all of your organization’s activities and deci-
sions.”
8
e second point of this denition is that TQM requires both structure and process in
order to achieve the desired outcomes, or as stated in the denition of management by fact from
the Malcolm Baldrige criteria: “An eective healthcare service and administrative management
system depends on the measurement and analysis of performance. Such measurements should
derive from health care service needs and strategy, and should provide critical data and informa-
tion about key processes, outputs, and results.”
9
Organizational Profile:
Environment, Relationships, and Strategic Situation
1
Leadership
7
Results
2
Strategic
Planning
5
Workforce
Focus
3
Customer
Focus
4
Measurement, Analysis, and Knowledge Management
6
Operations
Focus
Figure 15.1 Malcolm Baldrige framework.
126 ◾ Lawrence (Larry) Dux
Table15.1 Deming’s 14 Points
1. Create constancy of purpose toward improvement of product and service, with the aim
to become competitive, stay in business and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must
awaken to the challenge, must learn their responsibilities, and take on leadership for
change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for massive
inspection by building quality into the product in the rst place.
4. End the practice of awarding business on the basis of a price tag. Instead, minimize total
cost. Move towards a single supplier for any one item, on a long-term relationship of
loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality
and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership (see Point 12 and Ch. 8 of “Out of the Crisis”). The aim of supervision
should be to help people and machines and gadgets do a better job. Supervision of
management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company. (See Ch. 3 of “Out
of the Crisis”)
9. Break down barriers between departments. People in research, design, sales, and
production must work as a team, in order to foresee problems of production and usage
that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects
and new levels of productivity. Such exhortations only create adversarial relationships, as
the bulk of the causes of low quality and low productivity belong to the system and thus
lie beyond the power of the work force.
11. a. Eliminate work standards (quotas) on the factory oor. Substitute with leadership.
b. Eliminate management by objective. Eliminate management by numbers and
numerical goals. Instead substitute with leadership.
12. a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The
responsibility of supervisors must be changed from sheer numbers to quality.
b. Remove barriers that rob people in management and in engineering of their right to
pride of workmanship. This means, inter alia, abolishment of the annual or merit rating
and of management by objectives (See Ch. 3 of “Out of the Crisis”).
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The
transformation is everybody’s job.
Total Quality Management and the Malcolm Baldrige Quality Award ◾ 127
Malcolm Baldrige National Quality Award Criteria
e Baldrige model is dened by the Baldrige Criteria, which is organized into seven categories
and 17 items. e application summaries of recent Malcolm Baldrige Award winners can be found
on the National Institute of Standards and Technology website: http://www.baldrige.nist.gov/
Contacts_Proles.htm.
Category 1: Leadership (70 points)
− How do your senior leaders lead?
− How do you govern and fulll your societal responsibilities?
Category 2: Strategic Planning (85 points)
− How do you develop your strategy?
− How do you implement your strategy?
Category 3: Customer Focus (85 points)
− How do you obtain information from your patients and stakeholders?
− How do you engage patients and stakeholders to serve their needs and build relationships?
Category 4: Measurement, Analysis, and Knowledge Management (90 points)
− How do you measure, analyze, and then improve organizational performance?
− How do you manage your information, organizational knowledge, and information
technology?
Category 5: Workforce Focus (85 points)
− How do you build an eective and supportive workforce environment?
− How do you engage your workforce to achieve organizational and personal success?
Category 6: Operations Focus (85 points)
− How do you design, manage, and improve your work systems?
− How do you design, manage, and improve your key work processes?
Category 7: Results (450 points)
− What are your healthcare and process eectiveness results?
− What are your patient and stakeholder-focused performance results?
− What are your workforce-focused performance results?
− What are your senior leadership and governance results?
− What are your nancial and marketplace performance results?
e healthcare industry has embraced the use of the Malcolm Baldrige National Quality
Award Criteria as reected in the number of healthcare organizations submitting applica-
tions. In 2011, 40 of the 69 submitted applications were from healthcare organizations,
and in 2012, 25 of the 39 submitted applications were from healthcare organizations. e
positive impact of the use of the Malcolm Baldrige criteria in healthcare has been docu-
mented by John R. Grith and Kenneth R. White in their paper titled “e Revolution in
Hospital Management,” as presented in the May/June 2005 issue of the Journal of Healthcare
Management.
10
In October 2011, David Foster PhD, MPH, from the Center for Healthcare
Analytics, and Jean Chenoweth, from the Center for Healthcare Improvement, and 100 Top
Hospital Programs reported “Baldrige hospitals were signicantly more likely than their peers
to display faster ve year performance improvement. Baldrige hospitals outperformed non-
Baldrige hospitals on nearly all of the individual measures of performance used in the 100
Top Hospitals composite score.”
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