Have you read our previous article on the challenges in representing how much poor quality is costing your healthcare organization? If so, you're already aware that typical accounting practices are limited in their abilities to demonstrate both the current state of loss owing to poor quality and the potential your organization has to recover by working on quality. In line with that message, recent academic work has focused on just how limited modern accounting practice is when it comes to promoting quality improvement in healthcare. (Click the link beneath for the paper.) Remember, as Signature Healthcare CEO Kim Hollon and I recently discussed in a Healthcare Financial Management Association (HFMA) webinar, the Cost Of Poor Quality (COPQ) is a useful tool to demonstrate just how much poor quality is costing you right now...now to mention the more important effect on your patients! For more information on the COPQ, and specifics on its application in healthcare, take a look at the upcoming book here.
In summary, this paper adds to the accumulating evidence that existing practices of accounting for quality have a variety of dysfunctional and even counter-productive effects. However, it suggests that the call for accounting for the purposes of quality improvement to be abandoned or slowed is misplaced. It suggests that accounting is often ineffective not because it is inherently incomparable with quality and the complexities of healthcare, but because its underlying characteristics have not been fully acknowledged or understood.