Good morning, Chairman DeLuca, Chairman Micozzie, and members of the committee. I appreciate this opportunity to examine the concept and benefits of Quality Management Systems as a way to improve health care quality and outcomes for patients and reduce health care costs.
Lack of access to affordable, high quality health care in Pennsylvania and across the nation is a crisis that continues to plague our residents. I get calls everyday, as I am sure you all do, from constituents who either have no health insurance and a medical problem or from those who have just received or who live in fear of the next double digit increase to their health insurance premium. In fact, Blue Cross of Northeastern Pennsylvania recently filed for rate increases for 11 of its plans, including a 48.9 percent increase for its BlueCare Cooperative plan. This request is particularly alarming as the plan's subscribers tend to be high risk individuals who face difficulty obtaining coverage in the commercial market.
Health care inflation is devastating our nation's economy. You may remember back in 2005 when – despite offers of hundreds of millions of dollars in incentives from various states – Toyota decided to build its new factory in Canada, in part because they could no longer afford health care in the U.S. for their employees. Little has changed in four years. Health care costs are still out of control and many of our citizens still lack coverage for basic care and services.
We have all been alarmed by data reflecting the prevalence of medical errors. While the Pennsylvania Health Care Cost Containment Council reported a slight decline in hospital acquired infections in 2007, hospital acquired infections still drained the federal Medicare program of $6.9 billion from 2005 to 2007. According to the 2009 Health Grades 6th Annual Patient Safety in American Hospitals Study, approximately 40,000 instances of medical errors occur daily. Other studies and data also show that we have reason to be concerned about the quality of health care we are receiving.
And we have worked diligently to make positive changes. The Pennsylvania Health Care Cost Containment Council is a valuable resource in collecting, analyzing, and disseminating data about the cost and quality of health care in our state. Act 14 of 2003 mandated public reporting of various hospital-acquired infections. Act 52 of 2007 mandated infection control practices. In addition, Act 13 of 2002, which addressed the medical malpractice insurance crisis and made changes to our tort system, established the Pennsylvania Patient Safety Authority.
However, these efforts have focused largely on reporting medical errors after they occur in the hope that we can prevent future occurrences. But I have to ask, wouldn’t we be better off focusing on preventing medical errors in the first place – before a patient is injured, before additional cost and suffering has occurred?
I believe that Quality Management Systems, or QMS, offers just such an approach. Incentives such as reductions in medical malpractice premiums could be offered in exchange for health care providers becoming certified in a quality management system, such as ISO 9001 for health care.
What is ISO certification, you may ask? ISO is a quality management system maintained by the International Organization for Standardization, which accredits and certifies organizations that meet certain criteria. ISO can be used in a variety of industries, including health care, education, and manufacturing. In fact, I first decided to introduce legislation to incentivize this certification based on my background in manufacturing where ISO is widely used.
ISO is a process of continually analyzing, standardizing, streamlining, and improving what you do and how you do it throughout an organization. By engaging in this process, you ensure quality, prevent mistakes, and eliminate waste and duplication of effort and resources. In the health care industry, the ISO process ultimately protects patients from preventable medical errors, dramatically decreases health care costs, and lowers medical malpractice insurance premiums through better patient outcomes.
Although ISO is a quality management system that is well known in manufacturing as a means of improving quality and reducing cost, it is not widely used in Pennsylvania's health care industry. However, in Europe, a continent with a reputation for providing much better access to health care for its residents, there are approximately 5,000 ISO-certified health care facilities, and in Australia and New Zealand, there are 3,000. These global leaders in health care know that QMS provides a common sense approach to reducing medical errors, improving patient outcomes, improving productivity, and lowering overall health care costs. Common sense tells us that if we follow suit, health insurance and medical malpractice insurance premiums should be lower.
One of the difficulties I've had with introducing legislation on QMS in the past is that legislators are not familiar with the concept or the language of Quality Management Systems such as ISO. Fortunately, we have some very knowledgeable individuals here to testify today who will be able to shed light on the subject, such as our first witness, Dr. James Levett, Chief Medical Officer at the Physicians' Clinic of Iowa in Cedar Rapids and Chairman of the American Society for Quality's healthcare division. He will be able to offer greater insight into the concept and benefits of QMS, and I very much appreciate his traveling to be with us.
Mr. Chairman, thank you again for the opportunity to discuss QMS and how – through the use of systems such as ISO 9001– we can improve patient safety and better reduce and contain health care costs in the Commonwealth.