Assessment of Non-Quality Costs in a Healthcare Institution

Purpose– There is a lack of studies that quantify the impact of non-quality costs in healthcare institutions (HCIs). This paper presents a methodology for assessing non-quality costs in HCIs, with a focus on analyzing their impact on financial performance.
Methodology– The methodology consists of four steps: (1) defining the concept of “non-quality costs in HCIs” through a literature review, (2) structuring a framework for non-quality costs, (3) quantifying non-quality costs, and (4) assessing the impact of non-quality costs on the financial performance.
Findings– The non-quality cost framework developed included the following items: reprocessing costs due to errors in contract preparation, costs of correcting accounting or administrative errors, costs of repeated or lost laboratory tests, legal liability costs for adverse events, costs of unplanned care at another HCI, and costs of dealing with complaints due to patient dissatisfaction with care. It
was quantified that non-quality costs had a 3.1% impact on the total HCI revenue.
Practical implications– An improvement plan was developed to ensure that the medical and nursing staff adhere more effectively to predefined management protocols. In addition, a new operating procedure for the diagnostic advisory boards was established to improve their responsiveness and monitoring capacity.
Originality/value– The main contribution of this work is the proposal of a tool for quality improvement in the healthcare sector, which takes a practical and quantitative approach based on financial performance.

Healthcare institutions management, Non-quality cost model, Quality improvement, Financial impact of quality