Project Proposal

Introduction to Performance Improvement in Healthcare

Performance Improvement in Healthcare  

Healthcare is the core of the wellbeing of the citizens. Therefore, it needs to be improved every time to cater for the needs of the citizens. Health improvement needs to be approached from the performance improvement perspective.

Performance improvement in healthcare provides an indication of an organization’s performance in relation to a specified process or outcome. Healthcare performance improvement philosophies most often focus on measuring performance in the following areas:


  • Systems: The foundations of caregiving, which include buildings (environmental services), equipment (technical services), professional staff (human resources), and appropriate policies (administrative systems)
  • Processes: The interrelated activities in healthcare organizations that promote effective and safe patient outcomes across services and disciplines within an integrated environment
  • Outcomes: The final results of care, treatment, and services in terms of the patient’s expectations, needs, and quality of life, which may be positive and appropriate or negative and diminishing


Background and Significance of Performance Improvement

Efforts to ensure the quality of the healthcare services provided in the United States have been in place for more than 30 years. Through the years, these efforts have had many different names: quality assurance (QA), total quality management (TQM), quality improvement (QI), continuous quality improvement (CQI), quality management (QM), and performance improvement (PI).

Each of these terms represents a quality and performance improvement model and/or methodology that have been used with varying degrees of success by healthcare organizations. Many books and articles have been written on the subject, and new models and terminology will likely be developed in the future.

A new professional entering the healthcare field will probably work for many different organizations over his or her career and participate in many different quality and performance improvement projects. He or she will learn to use specific quality and performance improvement models and techniques as needed. With experience, healthcare professionals will develop the skill necessary to customize the models to specific organizations and healthcare services. The goal of this chapter is to provide a general overview of quality and performance improvement as it is applied in healthcare organizations. The chapter describes a generic model of performance improvement. It also defines commonly used PI terms and explains the basic philosophy of continuous performance improvement.


Performance Improvement as a Cyclical Process

Various healthcare organizations, including accreditation bodies, groups of clinical professionals, quality management professionals, healthcare providers, and government regulatory and policy-making entities all have unique perspectives on quality in healthcare.

Many have developed their own methodologies for quality and performance improvement. But most PI models being applied in healthcare today share one structural characteristic: they are cyclical in nature. The cyclical model is based on the assumption that PI activities will take place continuously and that services, processes, and outcomes can always be improved.

Quality should not be treated as a goal that is accomplished and then forgotten. Rather, it should be treated as an ongoing mission that guides everyday operations. Accreditation and licensing agencies expect hospitals and other healthcare facilities to strive for the highest quality of care possible at all times.

Healthcare leaders and their boards of directors are responsible for the quality of the organizations’ services. Many large healthcare organizations employ experts in quality management who are responsible for organizing PI activities and reporting results to the leadership and the boards of directors. At the same time, however, all employees are expected to have a basic understanding of PI principles and participate in PI activities.


Monitoring Performance through Data Collection

Performance monitoring is data driven. Monitoring performance based on internal and external data is the foundation of all PI activities. Each healthcare organization must identify and prioritize which processes and outcomes are important to monitor based on its mission and the scope of care and services it provides. A logical starting point in identifying areas to monitor performance includes important organizational functions, particularly those that are high risk, high volume, or problem prone.

Outcomes of care, customer feedback, and the requirements of regulatory agencies are additional areas that organizations consider when prioritizing performance monitors. Once the scope and focus of performance monitoring are determined, the leaders define the data collection requirements for each performance measure. Monitoring performance depends on the identification of performance measures for each service, process, or outcome determined important to track.

Performance measure is “a quantitative tool (for example, a rate, ratio, index, percentage) that provides an indication of an organization’s performance in relation to a specified process or outcome”. Monitoring selected performance measures can help an organization determine process stability or can identify improvement opportunities. Specific criteria are used to define the organization’s performance measures.

Components of a good performance measure include a documented numerator statement, a denominator statement, and a description of the population to which the measure is applicable. In addition, the measurement period; baseline goal; data collection method; and frequency of data collection, analysis, and reporting must be identified. One important outcome that hospitals are required to continuously monitor is the monthly delinquent health record rate.

The criteria used to establish this performance measure include: Number of incomplete health records that exceed the medical-staff–established time frame for chart completion over Average monthly discharges The populations included in this performance measure are the medical staff and inpatient health records. Tracking this outcome allows the hospital to continuously monitor its rate or percentage of delinquent health records. If the health record delinquency rate exceeds the hospital’s established performance standards (an internal comparison) or nationally established performance standards (external comparison), an opportunity for improvement has been identified. Following this, a team-based performance improvement process may be initiated.

When an organization compares its current performance to its own internal historical data, or uses data from similar external organizations across the country, it helps establish a benchmark, also known as a standard of performance or best practice, for a particular process or outcome. Establishing a benchmark for each monitored performance measure assists the healthcare organization in setting performance baselines, describing process performance or stability, or identifying areas for more focused data collection.

The Joint Commission (until 2007, known as the Joint Commission on Accreditation of Healthcare Organizations) is one available external resource that can be used to establish the performance measure of the average monthly health record delinquency rate for a hospital. The Joint Commission will cite the healthcare organization with a requirement for improvement if the total average health record delinquency exceeds 50 percent of the average monthly discharges in any one quarter.

Hospitals commonly set the benchmark for their health record delinquency rate at less than 50 percent. Once a benchmark for each performance measure is determined, analyzing data collection results becomes more meaningful. Often, further study or more focused data collection on a performance measure is triggered when data collection results fall outside the established benchmark. When variation is discovered through continuous monitoring, or when unexpected events suggest performance problems, members of the organization may decide that there is an opportunity for improvement.

The opportunity may involve a process or an outcome that could be changed to better meet customer feedback, needs, or expectations. The hospital administration previously had identified the employee turnover rate as an important performance measure to monitor and had collected a number of years of historical, internal data on this performance measure. Additionally, they researched external comparison data from other hospitals in the community and throughout the state and determined the best practice rate for employee turnover in their area should be 5 percent. Accordingly, the administration set its employee turnover rate benchmark at less than 5 percent.


Team-Based Performance Improvement Processes


Once an improvement opportunity has been identified through performance monitoring, and a team that consists of staff involved in the process under study has been assembled, the first task is to research and define performance expectations for the process targeted for improvement. The first steps may include the following:


  • Create a flowchart of the current process.
  • Brainstorm problem areas within the current process.
  • Research any regulatory requirements related to the current process.
  • Compare the organization’s current process to performance standards and/or nationally recognized standards.
  • Conduct a survey to gather customer input on their needs and expectations.
  • Prioritize problem areas for focused improvement.



The most important areas for healthcare organizations to consider when measuring performance include systems, processes, and outcomes related to care, treatment, or service. Many organizations emphasize the need to monitor and evaluate services that are high/low volume, high risk, or problem prone. Identifying end products for each organizational work unit helps define processes and products produced by the unit and valued by customers.



Patricia Shaw., Chris Elliot., Polly Isaacson., and Elizabeth Murphy. Quality and Performance Improvement in Healthcare: A Tool for Programmed Learning. American Health Information Management Association, 2012