obstacles to the application of total quality management in health-care organizations
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Obstacles to the application oftotal quality management inhealth-care organizationsCharles Zabada , Patrick Asubonteng Rivers &George MunchusPublished online: 25 Aug 2010.
To cite this article: Charles Zabada , Patrick Asubonteng Rivers & George Munchus(1998) Obstacles to the application of total quality management in health-careorganizations, Total Quality Management, 9:1, 57-66, DOI: 10.1080/0954412989261
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TOTAL QUALITY MANAGEMENT, VOL. 9, NO. 1, 1998, 57 ± 66
Obstacles to the application of total quality
management in health-care organizations
CHARLES ZABADA, PATRICK ASUBONTENG R IVERS &GEORGE MUNCHUSGraduate School of Management and Department of Health Services Administration, University
of Alabama at B irmingham, B irmingham, AL 35294, USA.
Abstract This paper involves a signi ® cant review of the obstacles that face health-care organiza-
tions that undertake total quality management (TQM) implementation. A de® nition of the concept
of quality is thoroughly explored, along with the concept of total quality. The importance of TQM in
the health-care industry is discussed, and a comparison of TQM in manufactur ing environments to
TQM in a health-care organization environment is made . Obstacles to the application of TQM in
health-care organizations are presented and discussed and conclusions and recommendations regarding
the philosophy and practice of quality management and digni ® ed leadership are made.
Introduction
Total quality management (TQ M) has proven very successful and promising in the manufac-
turing industry. It has been said that TQM can be equally applicable with success in the
service industry. But, due to the distinctive nature of health-care services, the application
and success of TQM have been limited to administrative and other supportive functions only
in most health-care organizations. In fact, the assertion made by TQM experts that TQM
can be successfully applied in every organization is based on two implicit but important
assumptions (Arndt & Bigelow, 1995): (1) hierarchical control dominance of management
over the technical core; (2) dominance of rational decision-making processes. Most health-
care organizations depart largely from those two assumptions.
First, there exist various powerful subcultures (e.g. physicians’ subculture). Each has its
own perspective of what quality should be, and how the work should be done, and this has
created a situation where management has little control over the most strategic areas where
TQM could yield greater results. Second, the heroism (of physicians) and human (life)
factors involved in health-care services have put rational decision-making in jeopardy. The
existence of many participants with diŒerent or even opposing interests in the health-care
delivery system makes it di� cult to de® ne health-care quality.
This paper explores some of the obstacles facing health-care organizations that embark
on TQM implementation. After de ® ning the concept of quality in general and of health-care
services from the patient perspective in particular, we review the concept of TQM. The
Correspondence to G. Munchus (Tel: + 1 205 934 8840; Fax: + 1 205 975 6234).
0954 ± 4127 /98/010057-1 0 $7.00 � 1998 Carfax Publishing Ltd
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58 C. ZABADA ET AL.
remaining sections deal with the characteristics of TQM and its implications in organizations
in general and in health-care organizations in particular. We also review the obstacles to the
application of TQM in health-care organizations. In conclusion, we suggest that subcultures’
perspectives (that seems to generate most of the obstacles) can be changed, provided the
appropriate approach for doing this is adopted. In any case, the best approach will be the
one that tackles the problem at its root.
De® nitions of the concept of quality
The concept of quality as used in TQM is confusing, in the sense that its meaning changes
as the perspective in which it is used changed. For example, quality de ® ned according to the
consumer perspective refers to aspects of a product or a service that bring satisfaction to the
consumer in terms of meeting performance expectation. Similarly, quality de® ned according
to the producer or provider perspective refers to aspects of the product or the service that
bring satisfaction to the producer or the provider in terms of meeting speci® cation requirement
and cost reduction. All quality experts agree on the necessity for the manufacturing or
the provider to reconcile the apparently con¯ icting perspectives, thereby making quality
improvement process more manageable.
Some quality experts, such as Crosby (1980), de® ne quality as `conformance to require-
ment’ . In this case, it is assumed that the quality variables are taken care of by the
`requirement’ . Dr Deming de® nes quality as a ``never ending cycle of continuous improve-
ment’ ’ . In Deming’ s model, quality is not a destination, but rather a journey (Asubonteng
et al., 1996).
The concept of quality is di� cult to de® ne in the service industry. In the health-care
industry, the concept is even more di� cult to de® ne, given the fact that there are many
participants involved in the delivery of health care, each having his/her own interest in point.
For example, the tiers payer is likely to consider cost containment as the most important
thing while assessing the quality of health-care delivery; whereas the patient is likely to
consider the degree of recovery of his/her initial state of health as the most important thing.
As pointed out by Palmer (1976, p. 8) `̀ the existence of multiple de ® nitions which incorporate
only certain dimensions, corresponding to the values of particular interest groups, has led to
much confusion’ ’ .
In general, the consumer determines what in a product or a service represents quality.
The consumer determines which level of quality is high and which one is low. He/she does
this by using whatever information is available, whether from experience, expectation or
deductive reasoning. However, in the case of health-care services, the consumer is limited by
the quantity and quality of the information available to him/her (Hamilton, 1982). The
reasons for the lim itation are multiple and include the complex nature of the health practices
and ethical reasons. As a de® nition, we suggest the following: in health-care services, quality
is achieved when the outcome matches or surpasses the patient expectation. This de ® nition
assumes that the patient knows in advance what are the possible outcomes; without that
knowledge quality cannot be measured (at least not from the patient perspective).
De® nition of the concept of TQM
TQM is also referred to as continuous quality improvement (CQI). TQM has no single
theoretical formulation, nor any de® nitive shortlist of practices that are associated with it
(Lawler, 1994). TQM has been de® ned diŒerently by diŒerent authors. Ho and Cicmil
(1995) reported some de® nitions from the TQM literature:
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OBSTACLES TO TQM IN HEALTH CARE 59
· TQM is a totally integrated eŒort to gain competitive advantage by continuous
improvement of every facet of organizational culture (Ho & Cicmil, 1995).
· TQM is total (every person in the ® rm is involved, and where possible its customers
and suppliers) quality (customer requirements are met exactly) management (senior
executives are fully committed) (Ho & Cicmil, 1995).
· TQM is the total quality control’ s organization-wide impact (Ho & Cicmil, 1995).
· For the US Department of Defense, TQM is both a philosophy and a set of guiding
principles that are the foundation of a continuously improving organization. TQM is
the application of quantitative methods and human resources to improve the material
services supplied to an organization, all the process within the organization and the
degree to which the needs of customers are met, now and in the future.
· TQM integrates fundamental management techniques, existing improvement eŒorts
and technical tools in a disciplined approach focused on continuous improvement (Ho
& Cicmil, 1995).
We summarize these de® nitions through some of the words used by one or the other. First,
the word `total ’ invokes the concept of system and wholeness. This implies that the activities
of TQM are not limited to a few components or processes in the organization: all the staŒ
constituents Ð physicians, nurses, management, etc.Ð must be highly involved. Second, we
have the word `continuous’ , which invokes the concepts of commitment and dedication. It
implies that hospital staŒmust not consider TQM activities as `one-time’ activities; on the
contrary, they should consider TQM activities as the normal way of doing their everyday
work. They see TQM as an on-going process that must be carried on as long as the system
(organization) lives. Third, the world `culture’ touches on the concept of human behavior. It
implies that the commitment must come from a shared belief ; the various professional
subgroups in hospital settings must work hard to ® nd a common ground in dealing with
TQM implementation. The health care organization’s culture must have precedence over
any other professional subgroup’ s culture for TQM to be successful. Finally, the words `tools’
and `methods’ touch on many other ideas, such as variation and measurement. They imply
that there must be a systematic way of carrying out each activity and measuring it; this
implies that physicians and other staŒmust accept and learn to use TQM tools as decision-
making help.
Importance of TQM in the health-care industry
TQM was ® rst popularized in Japan by Japanese manufacturing ® rms. The whole philosophy
was based mostly on the teachings of Drs Deming and Juran, two important American
experts in quality, who went to Japan to teach Japanese how to run modern manufacturing
plants after World War II. The old fashion of management became less and less productive
in the face of increasing customer demand for products of greater quality. The heavy emphasis
placed on inspection to satisfy the growing demand for quality product turned many
successful companies of the 1950s and 1960s into unproductive ones by the end of the
1970s. This created a situation whereby American companies felt that they must try the new
idea that, reportedly, had been so successful in Japanese companies.
Among the most reported TQM bene® ts was a study carried out by Garving (cited in
Dobyns & Crawford-M asson, 1991), who studied the quality of American and Japanese
room air conditioners over several years in the early 1980s. The conclusion of his study was
that ``Japanese companies were far superior to their US counterparts: their average assembly-
line defect rate was almost 70 times lower and their average ® rst-year service call rate nearly
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60 C. ZABADA ET AL.
17 times better’ ’ . The best American manufacture was about 10% worse than the worse
Japanese manufacturer, and the Japanese spent less to produce quality than the Americans
spent to produce something less (Dobyns & Crawford-M asson, 1991).
This revelation by Garving, coupled with the 1980s NBC documentary If Japan Can
. . . , Why Can’ t We?, helped to underline the importance of TQM practices in the US. In
manufacturing industry, where its bene® ts become ® rst evident, TQM improves the perfor-
mance of companies in several areas by eliminating product defects, enhancing attractiveness
of product design, speeding service delivery and reducing cost. In health care, TQM
encompasses a number of strategies designed to improve quality and reduce costs (Asubon-
teng et al., 1996). These strategies include:
· identifying and meeting customer needs;
· reducing the cost of non-compliance with standards;
· striving for zero defects;
· reducing outcome variability;
· using statistical methods to identify and monitor processes;
· continually working for improved quality (Asubonteng et al., 1996).
The quality chain reaction popularized by Dr Deming speci® es that quality improvement is
followed by reduction in cost (because of less rework, fewer mistakes, fewer delays, snags
and better use of machine time/material), which in turn increases productivity and therefore
enables the company to become more competitive, with better chances of survival and more
jobs provided (Ho & Cicmil, 1995).
In the health-care industry, if TQM is successfully adhered to, Deming’ s chain reaction
suggests that TQM will not only result in cost reduction in the administrative functions, but
also prevent costly or fatal mistakes that generate so much loss of life and law suites: Hamilton
(1982) reported that 90% of drugs prescribed result in waste of money and risk of serious
side-eŒects, and unnecessary surgery wastes billions of dollars and causes thousands of deaths
each year.
Even though TQM promises to oŒer a lot of bene® ts to hospitals, the application of its
principle is faced with some basic obstacles that are apparently inherent to the nature of
health-care organizations. For TQM to have a full impact on the health-care organizations,
those obstacles must be removed in one way or the other.
Comparison of TQM in manufacturing settings versus health-care organization
settings
TQM teaches us that understanding and ful® lling the expectations of customers is the best
and only lasting means to business success. TQM in health-care organization settings is
based on a number of principles that vary from organization to organization. Several studies
(e.g. Asubonteng et al., 1996) have outlined a range of key concepts used by the Henry Ford
system to implement TQM. They are:
· top management leadership;
· creating a corporate framework for quality;
· transforming corporate culture;
· customer focus;
· a collaborative approach to process improvement;
· employee education and training;
· benchmarking;
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OBSTACLES TO TQM IN HEALTH CARE 61
· quality measurement and statistical report;
· recognition and reward;
· integration with the process.
These concepts are not diŒerent from the ones used in manufacturing settings.
TQM application needs a strong leadership that must be initiated by the top manage-
ment. It must be a part of the strategic plans of the organization. An appropriate culture
must be created for TQM to yield full bene® ts. Every activity within the organization must
be tied to and must contribute toward the total satisfaction of patients. EŒorts must be made
to formalize each activity in terms of process, a process being more measurable and
controllable than guesswork. System approaches must be institutionalized to help to hold
together diŒerent functions and diŒerent activities; teamwork must be used extensively.
Employee training and continuous education must be institutionalized in order to address
subjects such as usage of TQM tools and profound knowledge acquisition. Benchmarking
must also be institutionalized. As de® ned by Kearns (chief executive o� cer, Xerox Corpora-
tion), benchmarking is the continuous process of measuring products, services and practices
against the toughest competitors or those companies recognized as industry leaders (Shoji
et al., 1993). TQM statistical tools must be used on a regular basis to monitor and measure
progress and performance. Recognition and reward must be revised and made compatible
with the TQM philosophy; especially, piecework compensation should not be used.
Obstacles to the application of TQM in health-care organizations
Review of the literature (Shortell et al., 1995) suggests one noticeable diŒerence between
TQM applications in health-care and other ® elds. The vast majority of applications in other
® elds of endeavour have been directed at the core processes of the ® rm in areas of greatest
strategic priority. In contrast, in health care, the vast majority of applications to date have
been in functions providing administrative support to patient care activities rather than
directly addressing clinical processes themselves. This ® nding is to be correlated with the
belief among the health-care organizations that TQM is used for the sole purpose of cost
containment; therefore the most evident area where it can be applied is administrative and
other support functions.
Deming’s 14 points do not refer solely to the function of a `quality department’ but
instead to the function of a `quality organization’ . Similarly, health-care organization should
not limit application of TQM to the administrative and other supportive activities. TQM
should be applied organization-wide, throughout all activities and functions; it should be the
manifestation of a fundamental and shared belief in total customer satisfaction. TQM is
more than a set of tools that can be learned in short order and simply applied in an existing
organization. It is a basic philosophy of management (Lengnick-Hall et al., 1995).
Among all the obstacles to the application of TQM in health-care organizations, it seems
that cultural obstacles are the hardest to remove. Obstacles to the application of TQM related
to culture in health-care organizations are documented by Shortell et al. (1995). These
obstacles are as follows:
· Health-care organizations are inward-looking; they tend to focus more on the needs
of care-givers and professionals than on the needs of external customers.
· Large health-care organizations are typically organized on a relatively hierarchical
basis, exemplifying bureaucratic cultures that are resistant to employee empowerment.
· There is a lack of senior management commitment to TQM in most health-care
organizations.
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62 C. ZABADA ET AL.
· In health-care organizations, leadership styles are based on command and control and
hero/heroine models, rather than empowerment and `m anager as developer’ (or
manager as coach) models (Shortell et al., 1995).
· In general, middle managers perceived TQM as a threat that might eliminate their
jobs. Therefore they resist its introduction to their organization.
Perhaps the most common obstacle to the application of TQM in health-care organizations
is the compensation system (Reinertsen, 1995). In general, piecework reimbursement systems
constitute a powerful obstacle to the application of TQM because it places the individual
worker at risk from innovation. Other obstacles mentioned by Reinertsen include fuzzy
missions, poor communication of organization purpose and strategies, lack of commitment
to training and learning, and corporate symbols, such as parking spaces.
In reviewing the literature, we ® nd other obstacles to the application of TQM in health-
care organization settings:
· Physicians in most health-care organizations do not feel concerned by TQM activities.
They feel that TQM is not applicable to their job. This point is crucial for the success
of TQM in any organizational settings, whether it is a manufacturing or a service
organization, as proven by a study at a Northern Telecom plant (Shortell et al., 1995).
This study found that employees’ inability to see beyond their own departments’
(specialities’ ) goal to the broader, ® rm-wide (hospital-wide), strategic quality issues
demanded by the environment was a major reason for TQM implementation failure.
· The under-involvement of physicians in TQM eŒorts (Shortell et al., 1995). This
includes the unavailability of time, physicians’ beliefs that they are already doing
quality work, physicians’ relative inexperience or unwillingness to work as members of
teams and physicians’ perception that TQM is primarily a cost-control mechanism.
· In addressing process approaches to the measurement of the quality of medical care,
health-care organizations do not pay enough attention to the presence of the patient
as both product and participant (Greene et al., 1976), even if this may be the crucial
determinant of the outcome of any medical intervention. It is obvious that hospitals
deal with human beingsÐ the patients. On the one hand, they are a product in the
sense that work is done on their physical or mental being; on the other hand, they are
a participant in the sense that their knowledge (information) and collaborations
(compliance to instructions) are required. As such, patients’ behavior has an impact
on the quality of the health-care outcome.
· It is reported (Hamilton, 1982) that many health-care providers strongly oppose
consumer involvement in the health-care system. Some of the reasons they advance
are: (a) health care is too esoteric for the consumer to understand, much less control;
(b) there is such a wide variety of consumer opinion about how to change the health-
care system that there is no one who can speak for consumers in general; (c) patient
involvement in the health-care delivery process will ham per the smooth operation of
some programmes.
· Rigid hierarchical and authoritative structures do not allow peer workers to make
suggestions for a change. For example, Hamilton (1982) reported that nurses and
other health-care providers who are sympathetic to consumer causes are vulnerable to
harassment. Some who have spoken out or acted too strongly for change have been
® red or have lost their license to practice their profession.
· The health-care consumers are powerless to alter health-care providers’ behavior
through market transactions. In a free economy society, consumer sovereignty is a very
important concept that every business organization takes into consideration in one
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OBSTACLES TO TQM IN HEALTH CARE 63
Table 1. Comparison of hospital professional and TQM models
Professional TQM
Individual responsibilities Collective responsibilities
Professional leadership Managerial leadership
Autonomy Accountability
Administrative authority Participation
Goal expectations Performance and process expectations
Rigid planning Flexible planning
Responses to complaints Benchmarking
Retrospective performance appraisal Concurrent performance appraisal
Quality assurance Continuous improvement
Source : Short & Rahim (1995, p. 261).
way or another. It is a law that has proven eŒective in teaching most business
organizations the right behavior to adopt. Basically, the `consumer as sovereign’ theory
explains production decisions as being the producer’ s response to consumer mandate.
But the very nature of the health-care market does not lend itself to the law of the free
market. Hazel Kyrk wrote (Hamilton, 1982), in `A theory of consumption’ , that
consumers need a neutral and independent sources of information to use in making
informed choices in spending. For a market to be considered a free market, it must
obey four basic conditions (Hamilton, 1982): (a) consumer demand must determine
production of goods and provision of services; (b) consumers must have the informa-
tion necessary to judge the quality, utility and safety of products and services that give
the greatest utility for the lowest price; (c) consumers must choose products and
services that give the greatest utility for the lowest price; (d) both consumers and
providers must have free access to the market-place. Clearly, the health-care industry
market meets very few, if any, of these conditions: until very recently there have been
few independent and neutral sources of information for consumers of health care.
A comparative analysis of the professional and TQM models was done by Short and Rahim
(1995). Table 1 summarizes the areas of con¯ icts of the two models.
Discussion
Hospitals are generally organized by occupations. These groups form what can be called
occupational subcultures, in the sense that they share in common a distinctive ideology and
identi ® able cultural forms or practices that are inherent to their occupation. For example, in
a typical nursing station you may ® nd such groups as registered nurses, pharmacists,
secretaries, nurse assistants and house keepers doing things that are particular to their
respective trade. As subcultures, these groups are diŒerent one from the other, but they still
have a common denominator by which all of them can claim their feeling of belonging to the
organization (the hospital) they work for. For the hospital to show good performance, these
various groups must work as a single one, but the feeling of the common denominator often
seemed to take a back seat in most health-care organizations, therefore hindering the
introduction and development of TQM in hospital. In fact, these subcultures seem to let
their professional needs take precedence on every other thing else, including TQM. Referring
to one of the most powerful of these subcultures (physicians), Andt and Bigelow (1995),
after pointing out that TQM assigns responsibilities to management that are vast under any
circumstances, stated: `̀ The special role of physicians, the behavioral and political aspects of
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64 C. ZABADA ET AL.
decision making in hospitals, and the ambiguities surrounding de® nitions of quality make the
job creating unity of purpose and of enforcing rational decision making even more daunting
and perhaps unrealistic in hospital’ ’ (p. 11).
As we have already mentioned, most physicians feel that they are already doing a quality
job and are even against patients’ participation in the health-care delivery process. This
behavior agrees with the outdated `product-out’ concept, which places emphasis on the
product. It focuses on the product (the medical procedure) as the purpose of work. This
traditional management orientation teaches that a job is done and done well if a product is
produced according to the manual for making it and the product works to its speci® cation or
standard. The focus is on the company’ s eŒort to produce what it considers to be a good
product (medical procedure). The product-out concept is often in a fashion that suggests
that the customers (patients in the case of hospitals) are stupid, that they do not understand
their real needs.
It is important for a hospital that is contemplating adopting TQM to help its subcultures
to get rid of all practices and thinking that are based on the product-out concept. Once the
product-out concept is discarded, the `market-in’ concept must be institutionalized and made
an important element of the new philosophy on which the hospital must operate. The market-
in concept places the emphasis on the customer’s (here the meaning of customer is extended
to a previous stage, process or function, within the hospital itself ) satisfaction as the purpose
of work.
The market-in concept focuses on input from the market (or from the previous stage,
process or function, within the hospital itself ), and suggests that the job is not done well
until the customer is satis ® ed (Shoji et al., 1993). To get the full bene® t of the market-in
concept, it must be applied throughout the organization and across all functions and activities.
This application should be within the system approach (which is a way of seeing the whole
instead of individual par ts of a phenomenon) framework, with, in the background, Deming’ s
profound knowledge (Lengnick-Hall, 1995). Figure 1 outlines the linkage of knowledge
required for continual improvement.
Deming advanced the concepts of profound knowledge of system, variation, psychology
and theory of knowledge. According to Deming, knowledge of a system emphasizes the
Figure 1. The knowledge linkage required for continual improvement (from Young, 1995, p. 42).
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OBSTACLES TO TQM IN HEALTH CARE 65
importance of knowing the aim of a system and the interrelatedness and interdependency of
its components and processes. Knowledge of variation acknowledges the inherent variability
of all processes, from the production system in the manufacturing plant to the temperature
or blood pressure of a living organism (Young, 1995). Knowledge of psychology includes a
special focus on understanding the intrinsic motivation that underlies much of human
behavior; this understanding implies a de-emphasis on external motivators and increased
emphasis on removing obstacles to pride and joy in work (Deming, 1993; Young, 1995).
The theory of knowledge speci® es that management is prediction (Deming, 1993; Young,
1995).
Conclusions
In conclusion, while acknowledging the success of TQM in the manufacturing and other
service sectors, we can still doubt the applicability and success of TQM in the health-care
sector. This doubt stems from the fact that there are a lot of incompatibilities between TQM
philosophy and the practices on which health-care organization’s management is currently
based. We feel that this situation can be reversed if enough resources and time are devoted
to changing health-care organization culture, from one built around the perspective of
heroism to one built around the perspective of commercial goals, without losing the dignity
that health-care services deserve. An approach to initiating a solution to the problem will be
for health-care learning institutions to accept a leading role. In this leading role, health-care
learning institutions should start putting increased emphasis on the teaching of TQM,
its overall philosophy (from team work to system approach in problem solving) and its
various tools.
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