Pitt Business: Joseph M. Katz Graduate School of Business & College of Business Administration

Press Release

April 27, 2005

Joint Study Combines Best Practices from Business Care to Combat a Top Health Care Threat for Patients in Nursing Home Facilities

PITTSBURGH—A new study strongly suggests that simple techniques commonly used in the business world can reduce one of the most financially and physically debilitating conditions in the nursing home industry.

 It is estimated that nearly one quarter of patients in some nursing homes suffer from pressure ulcers, or bed sores. It’s one of the leading health threats in nursing home care. In addition to pain and humiliation for residents, anger and frustration for the families, pressure ulcers in the U.S. cost over one billion dollars annually in treatment and personal injury liability payments to nursing facilities.

The new study claims that the incidence of pressure ulcers could be reduced significantly by introducing nursing home care staff to tightly measured quality improvement processes throughout the facility in an effort to enhance the nursing home residents’ quality of care.

The study, conducted by researchers at the University of Pittsburgh, and the VA Pittsburgh Health Care System was funded the Agency for Healthcare Research and Quality (AHRQ) with a grant of $800,000. It was conducted at a 136-bed, not-for-profit nursing home in Pennsylvania in 2003-2004. According to Dr. Vikas Mittal, professor at the Joseph M. Katz Graduate School of Business at the University of Pittsburgh, a unique “business” approach was used to help patients.

“We took very basic, tried-and-true methods used in the business world every day and applied them to this problem,” Mittal said. “Our study used a three-pronged approach. First we had to increase the ability of the nursing home staff to recognize the onset of an ulcer. What’s very critical here is that we did this for the home’s entire staff and not just its medical personnel.” The team used unique interactive training software developed by Fox Learning Systems, Inc. of Bridgeville, PA (www.foxlearningsystems.com) that enabled the staff to train at their own convenience.

“Second, we developed a financial incentive plan for the workers,” Mittal said. “The use of financial incentives, though common in business is somewhat of a rarity in the healthcare field. And the third vital component was developing a real-time feedback system from management to the staff on their training and the level of pressure ulcer reduction. There’s nothing new with these methods, generally these are techniques used every day in manufacturing or in service industries.”

Historically nursing homes have focused on training alone to reduce the incidence of PUs among nursing home residents. Many of these measures, while effective, are often discontinued due to, among other factors, high cost or lack of participation by staff.

Using financial incentives to improve the quality of nursing home care has rarely, if ever been used. But when the costs of the high rates of incidence of pressure ulcers in nursing homes is finally tallied—a mean cost of $2,700 for treating a single ulcer, personal injury lawsuits, and the physical “costs” to the resident—this approach quickly and easily turns into the cost-benefit analysis that can easily lead to sound decision-making for the nursing home administrators. Over a 12-week period, reducing the incidence of ulcers to below 3% percent yielded a potential savings of more than $40,000 while the incentives totaled just one quarter of that cost, $10,000. The financial incentives paid out as part of the study were linked to achieving the clinical goals of pressure ulcer reduction and delivered a presumed financial benefit to the facility as well.

But according to Mittal and his colleague Dr. Jules Rosen, principal investigator and Professor of Psychiatry at the University of Pittsburgh School of Medicine, they are unaware of such “business techniques” being applied or being so “interwoven into such a system of medical intervention and care.”

Another critical component in the study which led to desired goals was real-time feedback from management. The feedback was seen as the keystone to success because it established the importance of sticking to key processes—completing the training, inspecting the residents, and charting the results. “The feedback focused on a process rather than on a mandated outcome which tends to overlook the dynamic situation of nursing home care,” explains Mittal.

Feedback took the form of both positive and negative reinforcement. In fact two staff members were dismissed because of non-compliance. Using these feedback methods resulted in universal training for all employees in the facility.

“It also conveyed management’s belief and commitment to overall quality improvement to staff,” adds Rosen.

The study provided promising evidence in support of what many would consider an unorthodox approach to nursing home care.  The financial incentive model has long been used in different industries, especially those where customer satisfaction is a significant, if not altogether the only indicator of success. The outcomes of the study would suggest that financial incentives to nursing home workers create a win-win situation for all involved.

Its uniqueness also stems from the fact that a truly inter-disciplinary team of researchers at the University of Pittsburgh from the School of Business, Graduate School of Public Health, and the School of Medicine worked on the project.

“Combining efforts of social scientists, medical doctors, and business researchers led to a truly innovative approach to solving a crisis. Such collaborations can significantly enhance the value that research brings to the table in healthcare,” commented Mittal.

The Joseph M. Katz Graduate School of Business has been ranked consistently in the top 50 MBA programs in the United States. Recently, The Wall Street Journal ranked Katz in the Top 10 of public universities in the Top Regional Business Schools Ranking. As one of the 17 founding members of the AACSB, Katz is home to one of the first federally funded centers for international business and research. Its techno-MBA program options and its Evening Program have both earned recognition as top-20 programs from U.S. News & World Report.

The University of Pittsburgh (www.pitt.edu) system consists of its 132-acre main campus, located in the Oakland section of Pittsburgh, and regional campuses in Bradford, Greensburg, Johnstown and Titusville. Established in 1787, the University of Pittsburgh is one of the first 25 universities and colleges established in the United States. The University serves more than 32,000 students through the programs of 18 undergraduate, graduate and professional schools. It is recognized internationally as one of the leading research institutions in the world.