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INTRODUCTION

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Few topics stir emotions to the extent that healthcare does. The mention of the topic often elicits strong feelings and opinions about costs, quality, access, and a host of other issues. Healthcare touches everyone, and it represents one of the largest expenditures in almost any economy, particularly in the United States. The cost to provide healthcare is growing much faster than the cost of other goods and services. Although the quality of healthcare has improved, safety and consistent quality outcomes still remain a concern. Access to quality healthcare is still an issue (particularly for those individuals who cannot afford it), as is the patient experience, which is rarely addressed appropriately.

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Because of its tremendous cost and importance, the healthcare industry has been a target for many types of measurement efforts. Healthcare (the treatment of the health of people) is one of the most highly regulated and measured of all industries. All types of monitoring, recording, and measuring have entered into the healthcare arena, some with success and others not as successful due to the "practice of medicine." The practice of medicine is not an exact science, but one of discovery. Meanwhile, all types of healthcare performance improvement projects have been undertaken, and unfortunately, many of them have failed to live up to expectations. What is needed is a systematic approach to improving the healthcare industry, using a proven measurement process that generates credible outcomes.

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These important challenges must be addressed for a sustainable healthcare system in the United States and around the world. This opening chapter describes the issues and challenges that the healthcare industry faces and builds the case for major changes in the ways that healthcare improvement projects are initiated, delivered, and evaluated. The following opening stories highlight the dramatic changes that are occurring in healthcare and what healthcare organizations must do to survive in the future. Scripps has spent years preparing for the future and they will be able to address the tremendous changes that will occur. Metropolitan Foundation Hospital more than likely will not be able to survive and will be a candidate for consolidation, merger, or acquisition.

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OPENING STORIES

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METROPOLITAN FOUNDATION HOSPITAL

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Metropolitan Foundation Hospital has enjoyed a successful 30 years of service in a major metropolitan area. With several locations in the city, the nonprofit healthcare provider is operating at a modest but manageable deficit. Executives are active in their community as part of their corporate social responsibility program. The hospital only accepts patients who do not have health insurance to meet the minimally acceptable legal requirement. Fees charged are based on the cost of services.

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As the top executives plan for the future, they see substantial changes in the healthcare area as Medicare switches from pay for services to pay for value or bundled payments for service (capitation). Commercial payers are also ...

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