‘In the eye of the storm’

Fund­ing cuts threaten noted Baldrige pro­gram

Modern Healthcare - - THE WEEK IN HEALTHCARE - Mau­reen Mck­in­ney

Tight bud­gets and ea­ger con­gres­sional cost cut­ting could spell dis­as­ter for the Baldrige Per­for­mance Ex­cel­lence Pro­gram, a pro­gram cred­ited with in­creas­ing qual­ity and ef­fi­ciency at hundreds of U.S. or­ga­ni­za­tions, in­clud­ing many hos­pi­tals.

The first bad news for the pro­gram came last fall, when the National Com­mis­sion on Fis­cal Re­spon­si­bil­ity and Re­form re­leased its pro­posal with a rec­om­men­da­tion that the Baldrige pro­gram be elim­i­nated. “Busi­nesses should have enough in­cen­tives to main­tain the qual­ity of their prod­ucts” with­out the pro­gram, the com­mis­sion ar­gued.

Then in Fe­bru­ary, Pres­i­dent Barack Obama re­leased his pro­posed bud­get for 2012, which in­cluded a nearly 20% cut in fed­eral fund­ing—from $9.6 mil­lion to $7.7 mil­lion— for the pro­gram.

“When I saw that, I knew we were in trou­ble,” said Thomas Scham­berger, ex­ec­u­tive di­rec­tor of the Foun­da­tion for the Mal­colm Baldrige Qual­ity Award, a pri­vate, not-for-profit or­ga­ni­za­tion that part­ners with the U.S. Com­merce Depart­ment’s National In­sti­tute of Stan­dards and Tech­nol­ogy for the pro­gram. “We knew we were in the eye of the storm at that point.”

The pro­posed fund­ing re­duc­tion would have made op­er­a­tions dif­fi­cult but still fea­si­ble, Scham­berger said. But in July, the Bud­get and Ap­pro­pri­a­tions com­mit­tees of the U.S. House of Rep­re­sen­ta­tives voted to elim­i­nate all fed­eral fund­ing for the Baldrige pro­gram. Two months later, de­spite pleas by past Baldrige par­tic­i­pants and sev­eral meet­ings with sen­a­tors, the U.S. Se­nate Ap­pro­pri­a­tions Com­merce, Jus­tice, Sci­ence, and Re­lated Agen­cies Sub­com­mit­tee also voted to cut fund­ing to the pro­gram en­tirely.

With the govern­ment cur­rently op­er­at­ing un­der a con­tin­u­ing res­o­lu­tion, the pro­gram’s funds are still in place. But that could change as soon as a new bud­get is ap­proved, Scham­berger said.

One ob­sta­cle, said Thomas Dolan, pres­i­dent and CEO of the Amer­i­can Col­lege of Health­care Ex­ec­u­tives, is that many in Congress are not fa­mil­iar with the pro­gram, and if they are, they are fa­mil­iar only with the award and not the larger ed­u­ca­tional and as­sess­ment pro­gram.

“In some ways, it’s too small to re­ally get peo­ple’s at­ten­tion,” Dolan said. “When I talk to sen­a­tors about it, I re­ally have to start at ground zero, ex­plain­ing what it is and the con­tri­bu­tions it has made.”

The pro­gram, which uses set cri­te­ria and shared best prac­tices, is well-known among health­care or­ga­ni­za­tions, how­ever. Es­tab­lished in 1987, the pro­gram first be­gan al­low­ing health­care ap­pli­cants in 1998. Since then the per­cent­age of health­care ap­pli­cants has grown to more than 60%, Scham­berger said.

And those health­care or­ga­ni­za­tions that use the Baldrige process are more likely to out­per­form their peers, Dolan said. He cited a re­cent study from Thom­son Reuters, which con­cluded that Baldrige hos­pi­tals were six times more likely than non-par­tic­i­pat­ing or­ga­ni­za­tions to make its list of Top 100 Hos­pi­tals.

Un­der the pub­lic-pri­vate part­ner­ship, NIST over­sees the pro­gram and uses the fed­eral fund­ing to main­tain staff, run ex­am­iner train­ing, con­duct ed­u­ca­tional pro­grams and work with state-level Baldrige or­ga­ni­za­tions.

The foun­da­tion, on the other hand, has a yearly bud­get of $1.8 mil­lion al­lo­cated to fund the Mal­colm Baldrige National Qual­ity Award, a pres­i­den­tial award that hon­ors top-per­form­ing or­ga­ni­za­tions.

That fed­eral in­volve­ment and the fund­ing that goes along with it are crit­i­cal to main­tain­ing the pro­gram’s af­ford­abil­ity and in­tegrity, Scham­berger ar­gued. He cau­tioned against pri­va­tiz­ing the pro­gram and align­ing it with a univer­sity, as some have sug­gested. “This award is given by the pres­i­dent to busi­nesses, and we’re fright­ened that if it’s pri­va­tized, it could lose that pres­tige,” he said.

“There’s a real value in the le­git­i­macy and ob­jec­tiv­ity of the govern­ment say­ing, ‘These are our best or­ga­ni­za­tions,’” said Paul Bo­rawski, CEO of ASQ, the Mil­wau­kee-based or­ga­ni­za­tion that serves as a con­trac­tor to NIST un­der the pro­gram. “If it’s forced to go into the pri­vate sec­tor, it will have to oper­ate in a way that is fi­nan­cially vi­able. That will mean that prices will go up and it will be less avail­able to or­ga­ni­za­tions that need it.”

The loom­ing fund­ing cut has gal­va­nized past par­tic­i­pants, who credit the Baldrige pro­gram with big im­prove­ments at their or­ga­ni­za­tions.

Pat­tie Skriba, vice pres­i­dent of learn­ing and or­ga­ni­za­tional ef­fec­tive­ness at 319-bed Ad­vo­cate Good Sa­mar­i­tan Hos­pi­tal, Down­ers Grove, Ill., called the pro­gram trans­for­ma­tive. The hos­pi­tal be­gan par­tic­i­pat­ing in the Baldrige pro­gram in 2006, and in Novem­ber 2010, it was one of seven or­ga­ni­za­tions, cho­sen from a field of 83 ap­pli­cants, that re­ceived the top award for per­for­mance ex­cel­lence.

The pro­gram’s im­prove­ment process could be a life­line for many or­ga­ni­za­tions that are strug­gling in a fal­ter­ing econ­omy, Skriba said, and she urged past win­ners to speak up about their suc­cesses. “Our role right now is to com­mu­ni­cate the value of this pro­gram to any and all who will lis­ten,” she said.

San Diego-based Sharp Health­care, a five­hos­pi­tal health sys­tem, won the top award in 2007 af­ter a five-year Baldrige process. Dur­ing that time, the sys­tem saw im­prove­ments in em­ployee sat­is­fac­tion and re­ten­tion, fi­nan­cial per­for­mance, and clin­i­cal qual­ity out­comes, said Michael Mur­phy, Sharp Health­care’s pres­i­dent and CEO, and a mem­ber of the Baldrige Foun­da­tion’s board of di­rec­tors.

Cut­ting the Baldrige pro­gram’s fund­ing in a time of eco­nomic stress is coun­ter­in­tu­itive, said Ru­lon Stacey, pres­i­dent and CEO of two-hos­pi­tal Poudre Val­ley Health Sys­tem, Fort Collins, Colo.


“We be­lieve there are a hun­dred peo­ple who stay alive each year be­cause we use” the Baldrige pro­gram cri­te­ria, Stacey says.

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