The Ford Pinto was a really terrible car. The gas tank was positioned such that, in a collision, protruding differential bolts would puncture the tank, leading to frequent car fires. This defect led to the death of more than 27 people and many others maimed. Cars made in the United States in the 1970s and 1980s were poorly designed, cheaply assembled, and reliably unreliable. Rather than designing for quality, American manufacturers relied on fixing problems after assembly. Is it any wonder that consumers soon abandoned these terrible cars and purchased Japanese models instead?
Japanese manufacturers followed the quality rules created by W. Edwards Deming in their pursuit of the U.S. car-buying public. Deming’s principals allowed Japanese companies to manufacture high quality automobiles at lower costs and with fewer defects than their American counterparts.
With the rapid shift from volume-based reimbursement to value-based reimbursement, organizations must change the way they deliver healthcare, with Deming’s quality rules offering clues as to what needs to be done. In the 1970s, U.S. automakers fixed defects in their cars after they rolled off the assembly line.
This approach to healthcare—fixing defects, not measuring quality, ignoring processes, and shunning transformation and change—cannot survive the new realities inherent in the shifting of reimbursement rules. Perhaps a few of Deming’s 14 key principles for transforming business effectiveness can provide a roadmap for what our organizations need to do to prosper in the years ahead.