Journal of Healthcare Risk Management, 2010
Robert J. Latino, CEO, Reliability Center, Inc.
This article contrasts the application of preventive and predictive technologies in industry to those in healthcare. For years, risk managers have been discussing the rationing of care. This article presents the perspective of an engineering professional from the manufacturing industry who now consults with healthcare risk managers. The human being is often referred to as an “asset” in our society. Do we actually treat people as assets or liabilities? When preventive maintenance is routinely performed on a piece of equipment, the benefits are more reliable operations, increased productivity, and lower life cycle costs. If these proactive concepts are applied to the human body within our current healthcare systems, will we see these same benefits?
The healthcare reform debate has forced a deeper look into humanity itself and its contribution to society and raises a rhetorical question: Are humans assets?
Merriam-Webster’s defines asset as follows:
1 plural a: the property of a deceased person subject by law to the payment of his or her debts and legacies b: the entire property of a person, association, corporation, or estate applicable or subject to the payment of debts 2 a: an item of value owned b plural: the items on a balance sheet showing the book value of property owned.
Merriam-Webster’s defines liability as
1: the quality or state of being liable 2: something for which one is liable; especially: pecuniary obligation: debt—usually used in plural 3: one that acts as a disadvantage: drawback.
Experience tells us that someone who says, “Our people are our greatest assets,” is not being truthful in a literal sense. How many times do CEOs make this statement during speeches to shareholders? How many times has this kind of statement been published in the opening paragraph of annual 10K reports? Ironically, in these reports where the CEO opens with a tribute to “our people [as] our greatest assets,” the balance sheet shows that people are listed as a liability and equipment is an asset.
What is the moral perspective? Does society truly view people as assets? The debate on healthcare has challenged that premise.
Preventive and predictive maintenance
Those who have worked in manufacturing are familiar with the concepts of preventive and predictive maintenance (P/PM). These technologies (e.g., vibration monitoring) can assess the condition of a piece of equipment without stopping the equipment or the process. Application of these technologies results in overall higher operational reliability of the manufacturing process, higher-quality products (due to fewer stops and starts of the process), lower per unit costs, and thus higher margins.
After all, if a business can accurately predict which equipment will fail and estimate when it will likely do so, staff can better plan and schedule the needed repair in a cost-effective manner. Under these conditions, they do not unexpectedly interrupt operations and can ensure the least amount of time to make the repair. In the manufacturing industry, this is called mean time to repair, which can be defined as a measure of the average maintenance performance, obtained by dividing the cumulative time for a number of consecutive repairs on a given repairable item by the cumulative number of failures of the item. The term repair means the time the defect was reported to the time the equipment was ready to restart and operate satisfactorily.