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What system?

"The inspiration for microsystem thinking," says Gene Nelson, who worked with Batalden at the Hospital Corporation of America before both came to Dartmouth, "was in 1992 when Brian Quinn wrote the book Intelligent Enterprise." Quinn, who is also a longtime DHMC Trustee, "was studying the best service organizations in the world," continues Nelson, such as Federal Express and Sony. "What he discovered was that these [corporations] were fanatical about figuring out when their customer comes in contact with their organization [and] what happens to create value for that customer."

Nelson, Batalden, and Donald Berwick, M.D.—who at that time, with Batalden's help, was starting the Institute for Healthcare Improvement in Cambridge, Mass.—realized they could apply many of the innovations taking place in industry to health care. All three had worked on various quality improvement efforts throughout their careers.

Batalden had served in Washington, D.C., as assistant surgeon general and director of the Bureau of Community Health Services from 1972 to 1975. He was also influenced in the 1980s by the guru of quality improvement, W. Edwards Deming. By then in practice as a pediatrician, Batalden read of Deming's work in transforming manufacturing companies and signed up for one of his seminars. Batalden found himself in a smoke-filled room where Deming was talking about ball bearings. "It was awful," Batalden remembers thinking at first. "But then I realized he was not really talking about ball bearings. He was talking about a theory of work, a theory of the workplace, a theory of workers, and a theory that linked all of that to the people who benefited from the work."

For years, American industrialists had ignored Deming while he helped the Japanese make astounding leaps in quality and productivity. But in the 1980s, Ford Motor Company—losing money for the first time in its history—asked for his help in turning the company around. One result of that collaboration was the revolutionary Ford Taurus. Deming prodded Ford to focus on making the new car well, while seeking manufacturing efficiencies that wouldn't cheapen the product. The company offered special training to thousands of white-collar and production workers. It bought top-quality cars from competitors, took them apart, and tried to figure out how to improve on their best features. Ford also worked closely with 5,000 outside companies that would supply parts for the Taurus.

Batalden, pictured at DHMC, has been influenced by W. Edwards Deming and a Dartmouth management theorist.

"If we keep doing what we have been doing," Batalden says, "we'll keep getting what we've always gotten"—an expensive, high-tech, inefficient health-care system. "The health-care system needs to be redesigned."

And Ford made two clean breaks with tradition. Instead of picking suppliers that offered the lowest cost, the company made its choices based on quality. Ford also built prototypes of the Taurus for potential buyers to test so the kinks could be fixed before the first commercial models rolled off assembly lines. Typically, the American auto industry had resolved problems after the first batch of owners discovered them.

To gain maximum production efficiency, the company asked its assembly and parts plants to suggest better ways to build the new car. Ford amassed 1,400 ideas and used 550 of them. The Taurus came in $400 million under budget, eventually replaced the Honda Accord as the best-selling car in America, and boosted Ford's bottom line.

Ford's strategy involved an unhurried reexamination of every step involved in building a new car. The clinical microsystems approach employs a similar strategy, but in the health-care setting.

When Batalden and Nelson came to Dartmouth Medical School in the mid-1990s, their emerging ideas on microsystems gained traction. Since

then, Batalden has spearheaded the implementation of the microsystem approach in numerous units at DHMC, as well as in health-care systems throughout the United States and abroad. Among the organizations now using the microsystem approach are Geisinger Health System in Pennsylvania, the University of California at Davis, the Cystic Fibrosis Foundation, and the Vermont Oxford Network (a collaborative of intensive care nurseries), plus organizations throughout Europe.

Most recently, the American Hospital Association (AHA) asked Batalden, Nelson, and Marjorie Godfrey, M.S., R.N., director of clinical practice improvement at DHMC, to coauthor a guide to microsystems thinking for other health-care organizations. In December 2005, Clinical Microsystems: A Path to Healthcare Excellence was officially released (see details about the guide). This "toolkit," as Godfrey and Nelson call it, has been well received. "The phone is ringing off the hook," says Godfrey.

"Now your first reaction is likely to be, 'Oh, no, not another management fad,'" says Batalden in a video that's part of the toolkit. "But wait a minute," he continues, "clinical microsystems already exist within . . . hospital[s]. . . . What our research team at Dartmouth has focused on is how to make each frontline system achieve its best performance and how to link these units such that the entire hospital becomes a high-performing organization."

Batalden hopes that, hospital by hospital, the clinical microsystem approach may be able to transform American health care from the dysfunctional and expensive "system" it is today into an efficient and high-quality system. He is fond of the saying "Every system is perfectly designed to get the results it gets."

"If we keep doing what we have been doing," he says, "we'll keep getting what we've always gotten"—an expensive, high-tech, inefficient healthcare system. "The definition of lunacy," he adds, "is to keep doing what you've always done and expect different results. The health-care system needs to be redesigned. There is no choice but to redesign, because people are working hard—they're working as hard as they know how—and it's not working."

The United States spends more on health care per person then any other country in the world. According to a 2005 report from the World Health Organization, U.S. healthcare

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