W. Edwards Deming, Total Quality Management, and Healthcare Applications

Like any other service offered to a market to satisfy the needs and wants of the consumer, healthcare may be perceived as a product (Kotler & Armstrong, 2007). If healthcare organizations want their product to stand out from the competition, they must ensure efficient healthcare delivery without jeopardy to quality of care. Quality, in and of itself, is a marketing strategy that has the ability to help a for-profit healthcare organization become more profitable. The primary function of commerce is profit, and according to W. Edwards Deming, “The right quality and uniformity are foundations of commerce, prosperity and peace” (Best & Neuhauser, 2005). For all forms of healthcare institutions—for-profit, nonprofit, and government—quality is an ethical responsibility that has the ability to reduce overall institutional costs (Dowd & Haga, 1970; J. Lynn et al., 2007). Although one would believe that there is a difference in the level of quality provided by for-profit and nonprofit institutions, Sloan et al. found no significant differences in the level of quality provided by nonprofit and for-profit healthcare organizations (Sloan, Picone, Taylor, & Chou, 2001). From June – August 1950 after traveling to Tokyo, W. Edwards Deming lectured post-World War II era Japanese engineers, managers, and academics regarding “Statistical Product Quality Administration” and demonstrated how improved quality may curb costs over time (Dowd & Haga, 1970). His training revolutionized the Japanese auto industry and Deming was credited as a contributor to the “Japanese economic miracle” from 1950 – 1960, as huge demand was generated for high-quality, competitively-priced Japanese products (Nakamura & Kaminski, 1981). Because applications are endless, the Deming philosophy has proved beneficial to healthcare institutions seeking to improve quality while lowering costs. An adequate analysis of W. Edwards Deming requires an exhaustive exploration of his background, his philosophy, and manners in which the Deming philosophy may be applied to healthcare.

Although Deming’s writings on quality management have made an indelible impact on modern quality control, his youth and professional background played a critical role in his development of a quality control philosophy. William Edwards Deming was born in Sioux City, Iowa on October 14, 1900, the son of William Albert Deming and Pluma Irene Edwards, and raised on his maternal grandfather’s 300-acre farm, located between Ames and Des Moines, Iowa. It was on this farm where he learned the value of cooperation and the detriment of wasted resources. This future consultant to business leaders, corporations, and foreign governments, received a bachelor’s degree in electrical engineering from the University of Wyoming (UW) in 1921, a master’s degree in physics and mathematics from the University of Colorado in 1925, and a Ph.D. in mathematical physics from Yale University in June 1928 (“The Man: Timeline,” 2019). In 1927, Deming accepted a position as a mathematical physicist with the U.S. Department of Agriculture (USDA) Fixed Nitrogen Research Laboratory in Washington, DC, where he met Walter Andrew Shewhart, a physicist at Bell Telephone Labs, whose statistical control chart had a profound effect on Deming’s outlook (“The Man: Timeline,” 2019; Neave & British Deming Association, 1992). It was Shewhart’s influence that caused Deming to shift his focus to the application of statistical methods for industrial production and management, which later had a profound influence on the economics of the post-1950s industrialized world. In 1935, Deming took leave from the USDA to study at the University College in London under renown statisticians, Ronald Fisher, Jerzy Neyman, and Egon Pearson. It was here that the foundation was laid for Deming’s development of statistical sampling techniques that influenced public opinion polls, market research for business planning, and the U.S. Census Bureau of Labor Statistics (“The Man: Timeline,” 2019). In 1939, Deming edited, streamlined, and published a series of Shewhart’s lectures to the USDA Graduate School in a book entitled “Statistical Method from the Viewpoint of Quality Control” (“The Man: Timeline,” 2019; Shewhart & Deming, 1939). This editing gave Deming a thorough education in Shewhart’s theories, from which he would philosophize throughout his career. During the 1940 U.S. Census, the Deming-Stephan algorithm for iterative proportional fitting, one of Deming’s statistically sampling techniques, was first used to increase accuracy and reduce census costs. In 1947 at the invitation of General Douglas MacArthur, Deming was asked to assist in the early planning of the 1951 Japanese Census, and from June – August 1950 by invitation from the Japanese Union of Scientists and Engineers (JUSE), Deming trained post-World War II era Japanese engineers, managers, and academics in statistical process control (SPC) techniques. JUSE members were aware of Deming’s expertise in quality-control techniques, and they were already familiar with Shewhart’s techniques (“The Man: Timeline,” 2019). His training revolutionized the Japanese auto industry, and revived the post-war Japanese economy. In 1960, Prime Minister Nobusuke Kishi of Japan awarded Deming the Order of the Sacred Treasure, Second Class, a Japanese decoration for civil and/or military merit (Noguchi, 1995), and in 1991, Deming was inducted into the Automotive Hall of Fame (“Inductees & Honorees,” 2019). From 1946 to 1993, Deming was a faculty professor of Statistics at the New York University Graduate School of Business, and from 1985 to 1993, Deming was also named as “Distinguished Professor” at the Columbia University Graduate School of Business. When Deming wasn’t teaching, he served as a consultant for private businesses (“The Man: Timeline,” 2019). He continued to share his brilliance with the world until his death from cancer on December 20, 1993 (Holusha, 1993).

Although Deming made many contributions to quality improvement, he is, perhaps, best known for his introduction and development of Statistical Quality Control techniques and his “high quality costs less than poor quality” philosophy (Umble, 2000). W. Edwards Deming explained that by altering management techniques and using Statistical Quality Control, an organization may improve quality while simultaneously reducing expenses on raw materials, increasing production levels, standardizing product quality, meeting customer needs, decreasing inspections, extending the use of equipment and techniques, and ultimately reducing overall costs (Dowd & Haga, 1970). In one of Deming’s more notable articles entitled “What Happened in Japan?” Deming summaries nine reasons why Japan’s adoption of Statistical Quality Control (SQC) was so rapidly successful. In the five-page article, he also discusses an early version of the Plan-Do-Study-Act (PDSA) cycle and his take on common and special causes of variation (William Edwards Deming, 1967). Deming expanded Shewhart’s statistical concept of common and special causes of variation to include, not only manufacturing processes, but also the management of major corporations. This expansion was known as Deming’s theory of management (Neave & British Deming Association, 1992). In 1982, Deming published 14 principles of quality management, essential for transforming business effectiveness, in his book, “Out of the Crisis,” which has been recognized as the inspiration for the Total Quality Management (TQM) movement (W. Edwards Deming, 1982; Petersen Peter, 1999). These 14 principles, called the “Principles for Transformation of Western Management,” include: (1) “Create constancy of purpose toward improvement of product and service;” (2) “Adopt the new philosophy;” (3) “Cease dependence on inspection to achieve quality;” (4) “End the practice of awarding business on the basis of a price tag;” (5) “Improve constantly and forever the system of production and service” (i.e., adopt a continual improvement process [CIP]); (6) “Institute training on the job;” (7) “Institute leadership;” (8) “Drive out fear, so that everyone may work effectively for the company;” (9) “Break down barriers between departments;” (10) “Eliminate slogans, exhortations, and targets for the work force;” (11) “Eliminate work standards (quotas)… [and] management by objective;” (12) “Remove barriers that rob the hourly worker… [and] people in management and in engineering of their right to pride of workmanship;” (13) “Institute a vigorous program of education and self-improvement;” and (14) “Put everybody in the company to work to accomplish the transformation” (W. Edwards Deming, 1982). Since 1985, the Deming’s approach has been known as “Total Quality Management” (Houston & Dockstader, 1998; Petersen Peter, 1999). I would contend that, according to Deming’s 11th principle, the current “Pay-for-performance” or “value-based care” trend in healthcare may be antithetical to improving quality. As Deming delved into the work of Shewhart, he modified the Shewhart cycle, or the Plan-Do-Check-Act (PDCA) cycle, and developed the Plan-Do-Study-Act (PDSA) cycle, which incorporates deductive and inductive learning. Deming published this cycle in his 1993 book, “The New Economics for Industry, Government, Education,” as “The Shewhart Cycle for Learning and Improvement—The PDSA Cycle.” Deming explained that, for continual improvement, we must “Plan a change or a test, aimed at improvement,” “Do—Carry out the change or the test,” “Study the results,” and then “Act—Adopt the change, or abandon it, or run through the cycle again.” In his final book published in 1993, Deming also presented what he called “A System of Profound Knowledge” (W. Edwards Deming, 1993). The four parts of Deming’s system of profound knowledge offers managers an outside lens with which they may view and analyze their “prevailing style of management” in order to transform the system for the better. “Appreciation of a system” allows managers the ability to “[understand] the overall processes.” “Knowledge of variation” encourages managers to examine “the range and causes of variation in quality.” “Theory of knowledge” encourages managers to explore “the concepts explaining knowledge.” Finally, “Knowledge of psychology” reminds managers to incorporate “concepts of human nature” in corporate decision making (W. Edwards Deming, 1993). Deming is also known for his “Seven Deadly Diseases,” which he identifies as obstacles to continuous improvement. These Seven Deadly Diseases include: (1) “Lack of constancy of purpose,” (2) “Emphasis on short-term profits,” (3) “Evaluation by performance, merit rating, or annual review of performance,” (4) “Mobility of management,” (5) “Running a company on visible figures alone,” (6) “Excessive medical costs,” and (7) “Excessive costs of warranty, fueled by lawyers who work for contingency fees” (W. Edwards Deming, 1982). Deming’s philosophy provides both guidance and caution for managers seeking to simultaneously improve quality and reduce costs.

While Deming’s 14 Principles, Plan-Do-Study-Act (PDSA) cycle, System of Profound Knowledge, and Seven Deadly Diseases have had an immense impact on the management of manufacturing, his philosophy has also made an impact in healthcare. Deming was once injured and himself a patient. While receiving a blood transfusion in the intensive care unit (ICU), Deming noted how the nurses seemed defeated by the broken healthcare system, which had well educated registered nurses preparing hospital beds. He also observed a lack of efficiency and much inconsistency, as patients experienced several delays and the treatments administered by nurses did not always match what was prescribed by physicians. These factors all amounted to poorer quality. He surmised that the quality of healthcare at this institution could be improved by improving the hospital’s leadership and management (Best & Neuhauser, 2005). Not only could Deming’s ideas be applied to improve the quality of nursing in patient care, but they may also be applied to the training of future physicians. Warm et al. discusses how the internal medicine residency program at the University of Cincinnati College of Medicine has used Deming’s philosophy to overhaul their assessment system and how the Accreditation Council for Graduate Medical Education (ACGME) may apply this philosophy to overall graduate medical education (Warm, Kinnear, Kelleher, Sall, & Holmboe, 2019). Deming’s philosophy may also be applied to the overall quality in patient care of a hospital. In an article by Lynn and Osborn entitled “Deming’s quality principles: a health care application,” the authors report how Brazosport Memorial Hospital, a 165-bed community hospital in Lake Jackson, Texas, applied Deming’s philosophy to improve its hospital’s quality (M. L. Lynn & Osborn, 1991). W. Edwards Deming created a lasting framework of quality improvement, which will continue to revolutionize industries outside of manufacturing, as it has in healthcare.

References:

Best, M., & Neuhauser, D. (2005). W Edwards Deming: father of quality management, patient and composer. Qual Saf Health Care, 14(4), 310-312. doi:10.1136/qshc.2005.015289

Deming, W. E. (1967). What Happened in Japan? Industrial Quality Control, 24(2), 89-93.

Deming, W. E. (1982). Out of the Crisis. Cambridge, Mass.: Massachusetts Institute of Technology, Center for Advanced Engineering Study.

Deming, W. E. (1993). The New Economics for Industry, Government, Education: Massachusetts Institute of Technology, Center for Advanced Engineering Study.

Dowd, J., & Haga, T. (1970). Deming’s 1950 Lecture to Japanese Management. Translated Lecture Notes.

Holusha, J. (1993, December 21). W. Edwards Deming, Expert on Business Management, Dies at 93, Obituary. The New York Times. Retrieved from https://www.nytimes.com/1993/12/21/obituaries/w-edwards-deming-expert-on-business-management-dies-at-93.html

Houston, A., & Dockstader, S. L. (1998). Total Quality Leadership: A Primer. Washington, D.C.: Department of the Navy, Total Quality Leadership Office.

Inductees & Honorees. (2019). The Automotive Hall of Fame. Retrieved from https://www.automotivehalloffame.org/inductees-other-honorees/inductees-honorees/?ln=deming

Kotler, P., & Armstrong, G. (2007). Principles of Marketing (12th ed.). Upper Saddle River, NJ: Pearson-Prentice Hall.

Lynn, J., Baily, M. A., Bottrell, M., Jennings, B., Levine, R. J., Davidoff, F., . . . James, B. (2007). The ethics of using quality improvement methods in health care. Ann Intern Med, 146(9), 666-673. doi:10.7326/0003-4819-146-9-200705010-00155

Lynn, M. L., & Osborn, D. P. (1991). Deming’s quality principles: a health care application. Hosp Health Serv Adm, 36(1), 111-120. Retrieved from https://www.ncbi.nlm.nih.gov/pubmed/10108969

The Man: Timeline. (2019). The W. Edwards Deming Institute. Retrieved from https://deming.org/deming/timeline

Nakamura, T., & Kaminski, J. (1981). The Postwar Japanese Economy: Its Development and Structure: University of Tokyo Press.

Neave, H. R., & British Deming Association. (1992). A brief history of Dr. W. Edwards Deming. Knoxville, TN: SPC Press, Inc. .

Noguchi, J. (1995). The Legacy of W. Edwards Deming. Quality Progress, 28(12), 35-37.

Petersen Peter, B. (1999). Total quality management and the Deming approach to quality management. Journal of Management History, 5(8), 468-488. doi:10.1108/13552529910290520

Shewhart, W. A., & Deming, W. E. (1939). Statistical method from the viewpoint of quality control. Washington,: The Graduate school, the Department of agriculture.

Sloan, F. A., Picone, G. A., Taylor, D. H., & Chou, S. Y. (2001). Hospital ownership and cost and quality of care: is there a dime’s worth of difference? J Health Econ, 20(1), 1-21. doi:10.1016/s0167-6296(00)00066-7

Umble, E. J. (2000). QUALITY: THE IMPLICATIONS OF DEMING’S APPROACH. In P. M. Swamidass (Ed.), Encyclopedia of Production and Manufacturing Management (pp. 621-627). Boston, MA: Springer US.

Warm, E. J., Kinnear, B., Kelleher, M., Sall, D., & Holmboe, E. (2019). Transforming Resident Assessment: An Analysis Using Deming’s System of Profound Knowledge. Acad Med, 94(2), 195-201. doi:10.1097/ACM.0000000000002499

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