The Service Industries Journal, 2013

Vol. 33, No. 5, 516 –541, http://dx.doi.org/10.1080/02642069.2011.622368

Conceptual and mathematical model for quality improvement in

health care
Aleksandra Živaljevića∗ , Živko Mitrovićb and Maja Petkovićc
a
Faculty of Business Studies, Megatrend University, Goce Delceva 8, Belgrade, +381, Serbia;
b
Faculty of Organizational Science, University of Belgrade, Jove Ilića 154, Belgrade, +381, Serbia;
c
Faculty of Entrepreneurial Management, Alfa University, Modene 5, Novi Sad, +381, Serbia
(Received 16 September 2010; final version received 26 August 2011)

Numerous studies have shown that implemented models for quality assurance or
improvement in healthcare facilities differ, even those models that are based on the
same guidelines, i.e. standards, regulations or concepts. The cause of diversity in
implemented quality models could be found in the process of translating guidelines
into the implemented model for quality assurance or improvements in healthcare
facilities, while neglecting processes of healthcare facilities that are not clinical
processes, but still responsible for the quality of healthcare services. Therefore, this
research recommends a conceptual model that should be a link between guidelines,
implemented models and mathematical models derived from the conceptual model,
which could provide a means of evaluating quality values of any part of the
healthcare organization.

Keywords: quality; guidelines; health care

Introduction
Development of quality management theory began in the 1930s (Kemp, 2005), primarily
aimed to improve the quality of products and services in the industrial sector, protecting
customers’ interests and enabling organizations to benefit in various fields. Development
has resulted in different models for quality improvement and quality assurance that could
be found in the literature. A majority of proposed models are based on a process and
system approach (West, 1968) and are focused on gathering data on customers’ needs
and satisfaction. Data on customers’ needs and satisfaction with other data gathered
from system performances are guidelines for quality improvements in organizations.
Any model for quality improvement or quality assurance should result in decreasing or
even eliminating non-conformities (errors in system functioning, poor quality of services
and products, mistakes in processes of system), minimizing costs and maximizing chances
of gaining benefits from implemented changes through ensuring that the field of improve-
ment and a way of improvement are the best for both organization and its customers.
Healthcare organizations can be considered as business firms (van der Bij, Vollmar,
& Weggeman, 1998) from a service based operations point of view. However, manufac-
turing and service quality control schemes differ while there is a distinction between
them (Zeithaml, Parasuraman, & Berry, 1993). Services are intangible therefore they
cannot be measured, tested or verified in advance of sale to assure quality. The services
are produced and consumed simultaneously when it benefits the user. Therefore, they

∗
Corresponding author. Email: azivaljevic@megatrend.edu.rs

# 2013 Taylor & Francis

 The Service Industries Journal 517

cannot be stored before reaching customers, as is the case with physical goods. Much
more effort must be invested in staff training and quality planning and assurance in
order to ensure quality of services. Customers are often present, even involved in the
services provision, while production of goods takes place away from the customers. Ser-
vices disappear after their usage and only memory and consequences remain. Services
performance varies constantly – they are often of inconsistent quality. Given the
quality of services depends on the staff that provides them, their competence, experi-
ence, knowledge, motivation, physical and psychological state are decisive factors for
service quality.
While considering healthcare organizations as business firms (van der Bij et al., 1998)
all existing models for quality improvement and quality assurance could be applied in
healthcare organizations expecting to provide continuous and long-term changes,
meeting desired objectives and enabling lower risks and a low failure rate (Khan &
Khan, 2004). But somehow, quality management in healthcare organizations evolved rela-
tively independently of the development of quality management theory (Huycke & All,
2000). Donabedian’s framework for assessing the quality of care (Donabedian, 1966)
has been used for more than 30 years as a basis for scientific discussions, research and
development of quality models. While Donabedian was stressing the healthcare
outcome dependence on the structure and processes in his linear model, dynamic
models were already researched and proposed in quality management theory. Still, his
model is being discussed and proposed as a base for quality improvement (Francis,
Spies, & Kerner, 2008) and relations between structure, process and outcome have been
proven to exist (Kunkel, Rosenqvist, & Westerling, 2007). It is obvious that quality of
service in healthcare organizations depends on the quality of the healthcare organization’s
system (Lx, 1997), while systems refers to Donabedian’s structure and processes.
Four global directions in designing models for quality assurance in healthcare (Shaw,
2000) can be identified as: models based on medical speciality-driven visitation, models
for accreditation healthcare oraganizations, models of the European Foundation of
Quality Management, and Quality Management System models based on ISO standards
(ISO 9000 series). All models are based on standards, regulations or recommendations
that can be used as a guidelines for designing a specific model for a specific organization
(Wagner, Gulacsi, Takacs, & Outinen, 2006). Therefore, it is common that two almost the
same organizations use two different specific models, both primarily based on the same
standard or the same regulation. Each specific model has different results, but lack of
quality or even failures in healthcare organizations are still present (Starfield, 2000;
Trusko, Pexton, Harrington, & Gupta, 2007) in spite of the efforts of governments’ and
healthcare managers to ensure patient safety and reduce costs of healthcare organization’s
functioning by applying existing knowledge from the field of quality management.
Reasons of poor quality could be found in barriers for implementation (Ferlie &
Shortell, 2001), as well as in understanding and transforming guidelines into the specific
model, which does not cover all elements of healthcare organization systems in most of the
cases. Not uncommonly, governments of some countries with highly centralized health-
care systems define parameters that all healthcare organizations have to monitor and
measure and report on them (Canadian International Development Agency [CIDA],
2009; Government of Serbia, Ministry of Health, 2007), while nothing has been
changed in structure, processes and knowledge of healthcare organizations as a system.
It is, at least, strange to expect that a simple measuring of patient satisfaction or quality
parameters monitoring will improve or assure quality, while at the same time the infra-
structure needed for transforming these measured values and data into right decisions,
518 A. Živaljević et al.

corrective and preventive actions is not created, nor all processes that influence the
quality of outputs are optimized and assured.
There is little information available to patients on the quality or outcome of different
treatments, or different providers or specialists (Stevenson, 2005). Healthcare quality
reports are designed primarily to support payers’ choice of health plans and quality
improvement among plans and providers, not patient awareness and choice (Shaller
et al., 2003). For this reason healthcare organizations with higher levels of quality
cannot be awarded with more frequent patients’ appropriation for their services, and
patients are not provided with understandable information which would allow them to
make a choice based on the factors important to them.
All previously exposed facts indicate the existence of various problems in achieving
quality in healthcare organizations, and in gaining benefits of quality achievement.
These can be classified into two groups. The first group of problems is arising from
transformation of general standards, guidelines and regulations into a concrete model
for specific healthcare organizations which generally omits non-healthcare processes.
The second group of problems occurs in the achieved quality reporting process, where
excessive amounts of data on parameters prevent patients from simply making decisions
about choice of healthcare organization. Variety of data types results in more complicated
comparison between healthcare organizations.
Transforming guidelines into a specific model enables the omission of some parts of
the system affecting the output quality of healthcare organizations. We can conclude
that one way to solve this problem might be to identify the structure of healthcare organ-
izations through a conceptual model. It should identify all dynamic and static parts of
healthcare organization that affect the quality of its outputs, and at the same time
present the link between guidelines and specific model.

Backgrounds for a conceptual model of healthcare organization

The aim of defining the conceptual model, potentially used in designing and implementing
a specific model for quality assurance or improvement of specific healthcare organization,
is to create a model that:
. Would contain all elements having an impact on the functioning of healthcare
organizations and quality of its outputs
. Would support monitoring errors and non-conformities in healthcare organization
and identification of their cause
. Would be conformed with any existing quality standard, guideline or
recommendation
. Would support measurement of each element’s quality and the size of its impact on
entire healthcare organization quality
. Would allow compression of numerous data concerning qualities of the elements in a
simple concise information designed for patients review, and for quality comparison
between other healthcare organizations using the same model
. It could be used for software or procedures design for specific healthcare organiz-
ation, so that neither one element having influence on functioning of healthcare
organization and quality of its outputs is forgotten in model.
A base for structuring a conceptual model of healthcare organization is system theory,
while healthcare organization can be viewed as a system. That system is supposed to use
certain types of inputs to deliver certain types of outputs using resources in its processes.
 The Service Industries Journal 519

Types of inputs and outputs should be identified due to a fact that their quality has to be
controlled. Control is possible only if the entity to be controlled is known and understood.
One approach to increase our understanding of a complex system such as the organiz-
ation of health care is definitely to decompose it into subsystems (Browning, 2001). Due to
a lower degree of complexity and a smaller number of variables it would be relatively
easier to understand it this way. Each subsystem should be viewed as a system (Ackoff,
1999) having its own inputs and outputs, which communicates through the subsystem
with the environment consisting of other subsystems of systems.
We have used a concept developed by the Department of Quality Management at the
Faculty of Organizational Science, University of Belgrade, called The Anatomical Struc-
ture of the Business System, for defining and identifying subsystems of healthcare organ-
ization (Mijatovic, 2008). The concept suggests that every business system consists of
twelve subsystems (Mitrovic, 1996; Mitrovic & Zivkovic, 2000) of which eleven are uni-
versal, i.e. the same for all business systems no matter what the type of industry the
business system belongs to, while one subsystem is specialized, i.e. different for each
business system depending on the type of industry business system to which it belongs.
Each subsystem represents a set of processes that have the same purpose in a business
system with resources used in order to transform its inputs into outputs which should
meet the needs of other subsystems or environment. Universal subsystems are: the market-
ing subsystem, procurement (logistics) subsystem, subsystem of human resource, sales
subsystem, financial subsystem, billing (accounting) subsystem, quality subsystem, infor-
mation subsystem, legal-normative subsystem, development subsystem and management
subsystem. A specialized subsystem is the one that delivers products and services to the
market. In the case of a healthcare organization specialized subsystem, this would be
the one that consists of a set of processes that have the purpose to maintain or improve
the health of patients using medical staff, equipment, material and information, while
trying to meet the needs of its stakeholders.
Using the decomposition method, each subsystem is structured through its com-
ponents. A component represents a set of elements of the same type which exist in each
subsystem. Previously classified system’s resources are used to identify components of
a subsystem. A mandatory component is a process, due to the fact that with no processes,
the dynamics of a system would not exist. This provides the same structure for all subsys-
tems. Furthermore, each component can be decomposed into its lower-level parts, called
characteristics.
The conceptual model of healthcare organization, which the authors of this article
suggest for quality assurance and improvement in healthcare organizations, consists of
three hierarchical levels: system, subsystems and components. All three levels will be
explained in the following sections. The quality of higher hierarchical levels in the
model consists of qualities of its hierarchy lower parts. Each lower part of the hierarchy
has a certain degree of influence, i.e. importance of role in creating the quality of
higher hierarchical level – therefore, a mathematical model arising from the conceptual
model respects this fact.

Characteristics of healthcare industry

While we are designing the conceptual and mathematical model, we should consider the
characteristics of the healthcare industry and its specific characteristics. Healthcare indus-
try consists of organizations, people and actions whose primary intent is to promote,
restore or maintain health (World Health Organization [WHO], 2007). It is an integral
520 A. Živaljević et al.

and inseparable part of every society and every country. According to government industry
classifications mostly based on the United Nations system (World Health Organization &
United Nations Children’s Fund, 1978) and the International Standard Industrial Classifi-
cation (United Nations Statistic Division, 2001), health care generally consists of hospital
activities, medical and dental practice activities, and other human health activities. Those
activities are conducted within the healthcare organizations which could be, depending on
the type of services they deliver, facilities of primary, secondary or tertiary level of care
(WHO, 2007). Primary health care (PHC) is the first level of health care, directly acces-
sible to individuals and communities. PHC services require cooperative efforts from a
team of healthcare providers drawn from a range of disciplines. Finally, PHC should
offer a range of services in health promotion, preventive care, illness treatment and reha-
bilitation (Rogers & Veale, 2000). Secondary health care encompasses the services that are
most commonly provided in hospitals – general medicine, general surgery, paediatrics,
obstetrics, specialized ambulatory medical services, care by non-medical specialists and
general long term care (Gauld & Gould, 2002). Tertiary health care includes specialized
diagnostic and therapeutic services, rehabilitation programmes and education and research
(Gauld & Gould, 2002). As the first level of healthcare services, primary healthcare
services need to be well-integrated with the secondary and tertiary healthcare sectors, in
order to provide continuity of care for people throughout all levels of the healthcare
system. This involves attention to cooperation and communication between all three
levels of health care.
Dedicated to providing healthcare services to its patients, healthcare organizations
have the following characteristics:
. Business operations of the healthcare organization are based predominantly on the
processes of providing healthcare services requiring a high degree of medical knowl-
edge of employees
. Knowledge of healthcare human resources is structured in a major part of medical,
pharmaceutical, biological and other related healthcare services and acknowledges
that there is a low percentage of employees with knowledge and skills in economy,
law, marketing or management, and almost none with technical knowledge.
. The outcome of treatment is dependent on health service quality but also on charac-
teristics of the patient’s organism, of the patient’s life quality and sometimes of
quality of healthcare services delivered in the past or delivered by other healthcare
business systems
. Quality of health care is highly dependent on knowledge and medical equipment
used in delivering healthcare services (Donabedian, 1988)
. In most of the cases, especially in complicated ones, it is impossible to provide
healthcare services without the participation of multifunctional teams
. Often, more than one healthcare business system participates in the process of deli-
vering healthcare services, seen altogether by a patient as one healthcare service.

Modelling healthcare organization as a system – first hierarchy level of conceptual

model
The conceptual model observes the healthcare organization as a system whose operation-
ally interdependent elements aim to achieve the good health of its customers. Healthcare
organizations operate using inputs to transform them into outputs by processes of health
care, or to support processes conduction.
 The Service Industries Journal 521

The quality of the process of a healthcare organization directly depends on the quality
of resources and inputs, while quality of outputs, and thus quality of healthcare services,
depend directly on quality of processes of the healthcare organization. Healthcare
organizations must manage and assure the quality of inputs, resources and process to
achieve the quality of outputs, i.e. healthcare services.
A healthcare organization produces outputs by spending and using inputs and
resources and emits those outputs into the environment. Respecting the Anatomical Struc-
ture of the Business System, each of these outputs is created in one of the subsystems,
while healthcare outputs used for maintaining or improving health of patients are
created solely in the healthcare services subsystem. Outputs of the healthcare organiz-
ations are healthcare outputs, waste, documentation and information, and other additional
outputs. Healthcare outputs are placed on the market and on the basis of them organiz-
ations are entitled to receive funds, i.e. profit or share in the allocation of funds from
the budget. Healthcare outputs are:
. healthcare services provided to patients and in some cases to service providers
. healthcare products – medicines and drugs made in pharmacies, and
. gained knowledge and scientific improvements in the field of medicine at tertiary
level of health care (university hospitals and institutes).
Healthcare services affect patients’ health by maintaining it if patients are healthy, or
by improving patients’ health if it is disturbed by diseases. If the quality of healthcare ser-
vices is poor, outcomes of treatment and diagnostics are expected to be erroneous. Most
research that discusses quality in health care considers healthcare services separately
related to the field of medicine they belong to, therefore they define the quality of each
healthcare service separately too. This creates the impression that there are plenty of
different healthcare services available, and then imposes the conclusion that the quality
of each healthcare service needs to be assured in a different manner. It complicates pro-
cesses of quality assurance or improvement.
The disease can be seen as a problem occurring in the patient’s organism, therefore the
health services can be viewed as activities or processes that act to solve the problem or
prevent its occurrence. The steps in the process of solving the problem regardless of
type of the problem are always the same. The process of solving problems always starts
with research and gathering relevant information and data about the problem, in order
to provide answers about its existence, and if it exists then to provide answers about its
cause. This refers to the healthcare services of examining a patient and defining diagnosis.
When the problem exists and its cause is known, the next step is to define measures for
cause elimination, while implementation in the final step results in solving or reducing
the problem. Defining measures for cause elimination refers to the healthcare services
of prescribing treatment, while measures of implementation refers to healthcare services
of treatment. The process of solving problems could be used as a base in classifying health-
care services due to the fact that each step of the process can refer to a specific type of
healthcare service. Compatibility between steps in the process of problem solving and
health services is shown in Figure 1, where the left side of figure shows the process of
problem solving while on the right side healthcare services are related to each step in
the process of problem solving and are defined.
Although the patient may address one healthcare organization to improve or maintain
their health state, problems in health are usually complex and it often happens that more
than one healthcare organization is involved in diagnosing and treating a disease. Some-
times more than one healthcare organization is involved even in performing the same step
522 A. Živaljević et al.

Figure 1. The path in healthcare service classification.

of solving a health problem process. Each of the healthcare organizations involved in the
process of health problem solving should be responsible for the quality of their own
performance.

Modelling subsystems of healthcare organization – second hierarchy level of

conceptual model
Viewed as a business system, the health organization is composed of mutually dependent
subsystems. They exchange inputs and outputs between each other. Input in one subsystem
is output of another one. Each subsystem can be observed as an isolated system consisting
of processes using resources to transform inputs into outputs. All processes are working
together and have the same purpose as the belonging subsystem has for the system as a
whole. Subsystems should not be equated with the organizational unit or function
within an organization, but its scope should be searched in relation to the processes
which achieve the purpose of the subsystem. The process always belongs only to one sub-
system, while the same resource can belong to several subsystems. For example, the head
of surgery belongs at the same time to the management subsystem while he/she plans,
 The Service Industries Journal 523

coordinates, controls and leads employees at surgery and also belongs to the healthcare
service subsystem while he/she performs clinical processes.
The marketing subsystem has a purpose to enhance customer loyalty, satisfaction and
perception of quality (Tansuhaj, Randall, & McCullough, 1993) by providing a system
with necessary information about customers’ needs, competition data, data of best practise
and customer satisfaction data. The procurement subsystem has a purpose to supply the
system with necessary material, equipment and services and to assure quality of equipment
and infrastructure by its maintenance. The subsystem of human resources has a purpose to
supply the system with a necessary knowledge of human resources. The development sub-
system has a purpose to affirm new services which healthcare service subsystems should
deliver to patients, and to develop processes of all subsystems. The quality subsystem has
the purpose to provide and improve the quality of all subsystems and their components by
identifying causes of possible poor quality in the whole system and acting on their elim-
ination, and by identifying opportunities for quality improvements in whole system and
using them to achieve better quality. The management subsystem has the purpose to
plan, coordinate, and control improve all subsystems and its components. The information
subsystem has a purpose to make data and information available in the most suitable
format to other subsystems. The legal-normative subsystem has a purpose to ensure that
the entire system functions in accordance with the laws and regulations. The financial sub-
system has the purpose to supply a management system with information about the most
favourable financing dynamic for system performance, from existing funds and to create
the possibility of finding new funds. The billing subsystem has a purpose to evaluate costs
and exchange money and bills between systems and its suppliers, outsources, employees
and customers.
The sales subsystem is suggested as an eleventh universal subsystem (Mitrovic &
Zivkovic, 2000) that has a purpose to make outputs of a system closer to its customers.
In the manufacturing business systems, the sales subsystem is necessary to get products
into the market. However, in services business systems, customers consume services
while they are produced (Banker, Lee, Potter, & Srinivasan, 1996; Grönroos, 2006;
Zeithaml et al., 1993) and hence selling, consuming and producing are inseparable
processes. Therefore, the authors of this Conceptual Model believe that the sales subsys-
tem is inseparable from the healthcare service subsystem, whose purpose is to deliver
healthcare services to patients and satisfy their needs. Consequently, the second level of
a conceptual model of healthcare organization consists of eleven subsystems, ten universal
and one specialized.
Observing the relations between subsystems quality of health services is not affected in
the same manner by all subsystems. In the situation when the procurement subsystem does
not supply the healthcare service subsystem with equipment that has the necessary quality,
or if the subsystem of human resources does not supply health services subsystem with
employees who have the required quality of knowledge and skills, the possibility of
errors in diagnosis and treatment is higher than in situation when, for example, the
legal-normative subsystem is not aware of new regulations in time.

Modelling components of healthcare organization – third hierarchy level of

conceptual model
All subsystems of a system consist of the components related to each other, of which
components ‘processes’ are responsible for the subsystems’ dynamic nature. Also, sub-
system achieves its purpose by processes’ action that are associated with other components
524 A. Živaljević et al.

within the subsystem. Key processes are spread through the entire subsystem and
communicate with other subsystems by their inputs and outputs. Therefore, the component
‘process’ has a significant impact on the quality of the subsystem.
Processes are using or spending inputs and resources inside a subsystem to be run. As
each subsystem can be understood as a system, processes use the same resources as the
system in order to function. Therefore, components of the subsystems are: processes,
human resources, equipment, material, information and methods. Method is understood
as a component of a subsystem while it influences process flow. For example, the
process of diagnosis and treatment of patients can change its course, getting more or
less steps, and using different equipment, information or findings to run, depending on
the method used in the process.
When structuring one subsystem, all key processes should be identified. Table 1 shows
key processes that are identified for each subsystem of a healthcare organization respecting
the purpose of belonging to the subsystem.
Each identified process of a subsystem uses the rest of the components of a subsystem
(human resources, equipment, material, method and information) to run. Therefore they
should be identified also. Individually, each identified key process, seen separately from
the subsystems of other components, represents characteristics of the component named
processes. The same logic applies to other components of the subsystem.
It is important to identify all characteristics that are part of each component of a sub-
system, since each of these characteristics by their own quality affects the quality of
outputs that the subsystem produces, and the quality of the subsystem itself. The quality
of each characteristic should be defined with its quality parameters along with acceptable
values of those quality parameters, or along with quality parameters’ target values (CV)
and their tolerance range (+GT). Quality parameters and their acceptable values are
derived from dimensions or attributes of quality that refer to each component’s character-
istic and define terms each should achieve to be considered as quality. The trend of quality
degradation or improvement of characteristics and thus quality degradation or improve-
ment of the entire subsystem or system as a whole can be detected by monitoring and
measuring values of characteristics’ quality parameters and by comparing the measured
values with their target values. Change in measured values of a characteristic’s quality par-
ameter indicates something is going on with its quality. The cause of possible poor quality
of a subsystem’s outcome may be detected immediately, thus possible non-conformity can
be avoided by preventive actions applied on the characteristic. Vice versa, if the error
occurs, its cause could be easily identified by reviewing the values of quality parameters
of characteristics that were involved in its delivery or were connected to those character-
istics. This time, the cause can be eliminated by corrective action on characteristic respon-
sible for error and errors can be prevented from occurring again.

Mathematical model for evaluating the quality of healthcare organization and its
parts
The purpose of the mathematical model is to estimate the quality of a healthcare business
system through estimating the quality of its elements. It should allow comparisons
between healthcare organizations that use the same model, as well as comparisons in
quality between the same elements of those healthcare organizations. Therefore, the math-
ematical model would stimulate benchmarking between them. Also, it should allow the
identification of every part of a system jeopardizing the quality of the healthcare organiz-
ation and thus point to the cause of a possible poor quality. At the end, it should provide
Table 1. Identified key processes of each subsystem based on the purpose of subsystem.
Subsystem
Marketing subsystem
Management subsystem
Development subsystem
Subsystem of human resources
Key processes of subsystem Subsystem Key processes of subsystem
Researching competition Procurement subsystem Procuring equipment
Benchmarking Procuring material
Researching patients requirement Procuring services or outsource processes
Measuring patient satisfaction Inventorying
Monitoring performance parameters
of equipment
Planning Maintaining equipment
Improving Maintaining infrastructure
The Service Industries Journal
Controlling
Coordinating Information subsystem Archiving, sorting and transferring data
Developing healthcare services Legal-normative subsystem Analysing laws and regulations
Developing processes
Recruiting new staff Financial subsystem Analysing available financial resources
Conducting education and training plan Analysing possible funding
for human resources Updating
Updating and evaluating knowledge Billing subsystem
and skills of human resources Billing
Measuring human resource satisfaction Accounting incomes
Monitoring performance parameters of human Accounting outcomes
resources
(Continued)
(Continued)
525
 526
Table 1. Continued.
Subsystem Key processes of subsystem Subsystem Key processes of subsystem

A. Živaljević et al.
Quality subsystem Implementing quality models, Healthcare service Examining patients
standards and regulations subsystem
Medical errors monitoring Diagnosing
Recording patient complaints Prescribing therapy
Monitoring quality parameters Treating patients
Conducting internal audits Conducting autopsy
Defining causes of bad quality and opportunities Researching new methods for treatment
for quality improvements Researching new diseases
Defining corrective and preventive measures Research new drugs and medicaments
 The Service Industries Journal 527

information to patients and stakeholders, allowing them to make decisions about future
commitments.
The mathematical model is based on the assumption that the quality of outputs directly
depends on the quality of the system and the quality of its elements. The mathematical
model is based on the hierarchical approach, hence quality values of each system’s part
consists of the quality values of its hierarchically lower segments. Thus, the quality
value of the system consists of the quality values of its subsystems. Furthermore, the
quality value of a subsystem consists of the quality values of its components. Each part
belonging to the lower hierarchical level has a different impact, i.e. role importance in
achieving quality of its higher hierarchical level. Respecting this approach, each lower
hierarchical level is assigned to a weight ratio that is consistent with its impact on the
quality of its higher hierarchical level. The quality value of one part of healthcare
organization is the sum of the quality values of its hierarchically lower parts (NKi) each
multiplied by its weight ratios Pi. The number of summands for one part of the system
is determined by the number of parts of which it consists. So, the quality value of a part
of the system or the system is:
(a)


n
NK = Pi NKi ,
i=1

where NK is the quality of a part or a system, NKi is the quality of a lower level part belong
to a higher level part, Pi is the weight ratio for a lower level part.
The mathematical model allows a final result of the quality value of any system’s part
or of the system as a whole, and takes values only in the range from 0 to 1. The system or
its part with a quality value 0 is considered as a complete non-conformity, while the system
or its part with a quality value 1 is considered as Total Quality.
The value of weight ratios (Pi) is determined by the mark for role importance of part
(Oi) in achieving the quality of its higher hierarchical level.
Like the Delphi method, judgment on the mark for role importance of each part is
given by the experts. Experts compare the impact of an estimated part on quality of the
higher hierarchical level part that estimated part belongs to, to impacts of all the rest of
the parts that belong to the same part of the higher hierarchical level on the higher
hierarchical level part’s quality. The marks’ values do not allow a final result to take a
value less than 0 or greater than 1 because evaluation of the weight ratio is using a pro-
portion method. The value of the weight ratio of a part of one hierarchical level is evalu-
ated when the mark given by an expert for its role importance in achieving a higher level
belonging part’s quality is divided by the sum of all marks for role importance of all parts
that belong to the same higher level part. This way proportionality between the weight
ratios and marks for role importance is ensured, and the value of the quality of any part
is limited always between 0 and 1. The formula for evaluating the weight ratio is:
(b)

Oi
P i = n ,
i=1 Oi

where Pi is weight ratio for part i, Oi is the mark for role importance, of part i in achieving
quality of its higher hierarchical level.
528 A. Živaljević et al.

The quality of the lowest hierarchical level parts – characteristics (one key process,
one type of equipment, a physician, etc.) is defined by quality parameters. Each quality
parameter of a characteristic is defined by its target value (CV) and tolerance (+GT),
which represents the set of acceptable values of that quality parameter which may have,
while a characteristic is not considered to be a non-conformity. One characteristic may
be defined by more quality parameters, and therefore its quality value for each quality
parameter has to be evaluated separately.
The quality value of one characteristic, when taking one characteristic’s quality par-
ameter and observing its measured value, is scored 0 when the measured value of the
quality parameter (IP) deviates beyond the tolerance (GT). The quality value of one
characteristic for the respective parameter is 0 because the characteristic is then fully
non-conformed in the terms of that parameter. Measured values of the quality parameter
that are outside of the tolerance range have a fatal impact on a patient’s life or process
outcome in most of the cases. All measured values of the quality parameter within the tol-
erance range do not have a fatal outcome on a patient’s life, but one of the same value can
have a different impact on a different patient’s organism. It means that size of deviation
from the target value does not impact on the score and it is the reason why a linear
scale is not used to convert measured values into quality of characteristics, but a discrete
tertiary scoring system of 0-0.5-1. The quality value of one characteristic for the respective
parameter is 1 when the measured value of the parameter (IP) is equal to the target value
(CV). Since measured value is then totally conformed to planned quality, it can be
considered as Total Quality. The quality value of one characteristic for the respective
parameter is 0.5 when the measured value of the parameter (IP) is within the tolerance
range (GT), but not equal to the target value (CV). The quality of a characteristic
for this parameter is acceptable but not total. The quality of a characteristic k for parameter
i is:
(c)

CV = GT ^ IP = CV ⇔ NKk,i = 1
CV = GT ^ IP = CV ⇔ NKk,i = 1
CV = GT ^ IP = CV ⇔ NKk,i = 0 ,
CV = GT ^ IP  GT ⇔ NKk,i = 0
CV = GT ^ IP = CV ^ IP [ GT ⇔ NKk,i = 0.5

where NKk,i is the quality of a characteristic k for quality parameter i, CV is the target
value of the quality parameter, GT is the tolerance range, IP is the measured value of
quality parameter i of characteristic k.
A characteristic’s quality value is defined by one or more of the quality parameters and
their respected target values with tolerance. Therefore, the quality value of a characteristic
has to be evaluated separately for each parameter. Again, the weight ratio has to be
assigned to each quality parameter in respect to its role importance as it was explained
before (b). The quality value of characteristic k is now a sum of its quality values for
all its quality parameters, each respectively multiplied by its weight ratio:
(d)


n
NKk = Pk,i NKk,i ,
i=1
 The Service Industries Journal 529

Figure 2. Quality parameters used to monitor and measure quality of all parts of each subsystem of
the model.

where NKk is quality of a characteristic k, NKk,i is quality of a characteristic k for its

quality parameter i, Pk,i is weight ratio of quality parameter i in achieving quality of
characteristic k.
Since the quality value of all characteristics of a component is evaluated, the quality
value of the component can be evaluated too, using the same logic. Weight ratio is to
be determined for each characteristic regarding its degree of impact on the quality of a
component to which it belongs (b). A component’s quality value is the sum of quality
values of its characteristics each multiplied by its weight ratio. The same logic repeats
for both subsystem and system.

Example of implementation and model results

The proposed conceptual model is still in an experimental phase. So far, it has been
implemented in two private primary care healthcare centres. The first healthcare centre
used the conceptual model as a base for redesigning its processes and preparing for ISO
9001 certification. The second healthcare centre used the conceptual model to reduce
costs and increase market share, i.e. to attract more patients by increasing the quality of
services and the satisfaction of existing patients.
Implementation in both health centres consisted of three phases. The first phase
included selection of processes from the conceptual model which should exist in each
healthcare business system, respecting the level of health care to which the business
system belongs. All subsystems of the conceptual model, except for the healthcare
service subsystem, are fully implemented, i.e. all of processes of those subsystems are
identified as necessary to exist (Table 1). In the healthcare service subsystems the first
four processes were identified as necessary, while the other four were understood as a
530 A. Živaljević et al.

part of the secondary and tertiary levels of care, therefore these processes are excluded.
In the second phase all selected processes were documented by procedures. Quality
parameters along with target value (CV) and tolerance range (+GT) were defined for
each documented process, for each employee conducting documented processes and for
equipment used in documented processes.
To enable comparisons between the same levels of the model in different healthcare
organizations or same parts of model in different healthcare organizations, the same
quality parameters have to be used. Therefore, quality parameters were defined in relation
to the quality dimensions for each component of subsystem, i.e. processes, methods,
human resources, equipment, information and material as standard as recommended for
all healthcare organizations which are applying the model. Target values and tolerance
range for each quality parameter were defined by the group of experts. Figure 2 shows
quality parameter of the model.
Any process, in order to achieve quality must be done in an optimal way, and an
optimal way is defined by the appropriate procedure or plan for process conduction.
The parameter for this quality dimension that is recommended by a model is the percen-
tage of realized items of all planned items in the process by procedure or plan. Also, the
process must be synchronized with other processes. It should start as early as it can and its
duration time should be the shortest possible time. Parameters in this case would be the
time that passes from the end of previous processes until the process ends, with the
difference between realized and planned starting time and the time needed for starting
the process. The process should be available to all its customers or following processes.
The number of ways to initiate the process and number of operations needed to be done
to start the process are quality parameters in this case. Finally, the process is carried out
to produce planned results, therefore its outcome should have desired characteristics
and should be delivered to its customers or following processes at an appropriate time
and way. The number of customer’s complaints and number of non-conformed process
results would be quality parameters in this case.
When deciding between various methods that can achieve the same goal, the success of
the method and its implementation costs are important factors that influence the decision
process. Success can be recognized through the percentage of successfully produced items,
while costs are shown by the amount of money needed for using the method.
Human resources and equipment are important components of the model in a health-
care organization while their influence on healthcare outcome is significant. Their quality
can be recognized through their results that can be measured through productivity, i.e.
number of processed items in time and through outcome, i.e. number of realized items
with planned characteristics. However, human resources have an additional condition to
fulfil in order to be able to produce quality and it is knowledge that can be approved by
diplomas and certificates.
The material is as good as it is not beyond the date of expiring and as long as it is not
causing complications on the processed item or in the process itself. Also, it influences
efficiency through costs that are caused by its preparation, storage and purchasing.
Quality of material could be determined by monitoring time that is left until its expiration,
number of complications caused by material used, amount of money needed for material
preparations and storage and also needed for material purchasing.
Quality information is complete, authorized and available when needed in the process.
Parameters for quality of information recommended by the model are number of missing
parts of information, number of times when information came from unknown sources and
time that process waits on information.
Table 2. Example of evaluating the quality of ‘Examining patients’ as a characteristic that is part of component ‘process’ within healthcare service subsystem.

Quality of Quality of
Tolerance Measured characteristic Mark for quality characteristic
range of value of ‘Examining parameter’s role of ‘process of
Quality parameter ‘i’ of Target value of quality quality quality patients’ for each importance given by Weight ratio assigned to examination’ for the
characteristic ‘Examining parameter parameter parameter parameter the group of experts quality parameter parameter i
patients’ (CVk,i) (+GTk,i) (IPk,i) NKk,i Oi Pi Pk,i ∗ NKk,i

Per cent of realized items of 100% (210%) 97.4% 0.5 10 0.16129 0.080645
all planned items in
process of examining
patient per patient

The Service Industries Journal

visitation
Number of corrections in 0 (+0.1) 0.06 0.5 10 0.16129 0.080645
findings on patient
condition per patient
Number of additional 0 (+1) 0.8 0.5 2 0.032258 0.016129
analysis required at all
following examination
appointments that prior to
diagnosis per physician
Time that patient spends in Less than 20 min (+10 min) 31.8 0 5 0.080645 0
waiting on examination
along with the time of
conducting the
examination per patient
visitation
The time required for Less than 2 days (+1 day) 1 day 1 7 0.112903 0.112903
scheduling the
examination per patient
visitation
Number of ways available to 3 (direct phone line, 0 3 1 7 0.112903 0.112903
the patient to schedule the internet or face-to-
examination per patient face)
visit
Number of operations the 1 (scheduling 0 1 1 3 0.048387 0.048387
patient must do to reach examination by one
the examination services phone call, or by one

531
par patient visit internet reservation or
by one face-to-face
scheduling)

(Continued)
 532
Table 2. Continued.
Quality of Quality of
Tolerance Measured characteristic Mark for quality characteristic
range of value of ‘Examining parameter’s role of ‘process of
Quality parameter ‘i’ of Target value of quality quality quality patients’ for each importance given by Weight ratio assigned to examination’ for the
characteristic ‘Examining parameter parameter parameter parameter the group of experts quality parameter parameter i
patients’ (CVk,i) (+GTk,i) (IPk,i) NKk,i Oi Pi Pk,i ∗ NKk,i

A. Živaljević et al.
The difference between the 5 min 1 min 11.4 min 0 6 0.096774 0
realized time of patient’s
admission and the
scheduled time for
patient’s admission per
patient visitation
The number of patient 0 0 0 1 4 0.064516 0.064516
complaints related to the
kindness of medical staff
per physician
The number of patient 0 0 0 1 8 0.129032 0.129032
complaints related to
violation of the patient’s
rights per physician 
n
Quality of a characteristic ‘Examining patients’ NKk = Pk,i ∗ NKk,i 0.645161 ≈ 0.65
i=1
Table 3. Example of evaluating the quality of healthcare service subsystem.

Mark for
Mark for component’s role of Weight ratio
Quality of characteristic’s role importance for assigned to Quality of
Characteristic ‘k’ characteristic ‘k’ of importance for Weight ratio Quality of accomplishing component ‘c’ healthcare
of component ‘c’ previously accomplishing assigned to component ‘c’ quality of healthcare within the service
within the estimated using quality of component characteristic ‘k’ for the Quality of service subsystem healthcare subsystem for
healthcare logic as shown in ‘c’ given by the within the characteristic component given by the group of service the
Components of service Table 2 group of experts component ‘k’ 4 ‘c’
 experts subsystem component ‘c’
subsystem subsystem NKc,k Oc,k Pc,k Pc,k ∗ NKc,k NKc Oc Pc Pc ∗ NKc
k=1

Component Examining 0.645161 10 0.25 0.16129 0.70909 8 0.148148 0.10505

The Service Industries Journal

‘Process’ patients
within Diagnosing 0.618644 10 0.25 0.154661
healthcare Prescribing 0.935484 10 0.25 0.233871
service therapy
subsystem Treating patients 0.637097 10 0.25 0.159274
Component Human resources 0.959016 10 0.285714 0.274005 0.84566 10 0.185185 0.156604
‘Human in the process
resources’ of Examining
within patients
healthcare Human resources 0.828125 10 0.285714 0.236607
service in the process
subsystem of Diagnosing
Human resources 0.783333 10 0.285714 0.223809
in the process
of Prescribing
therapy
Human resources 0.778689 5 0.142857 0.111241
in the process
of Treating
patients
Component Equipment used 0.784615 10 0.384615 0.301775 0.78558 10 0.185185 0.145478
‘equipment’ in the process
within of Examining
healthcare patients
service Equipment used 0.765625 6 0.230769 0.176683

533
subsystem in the process
of Diagnosing

(Continued)
Table 3. Continued.

534
Mark for
Mark for component’s role of Weight ratio
Quality of characteristic’s role importance for assigned to Quality of
Characteristic ‘k’ characteristic ‘k’ of importance for Weight ratio Quality of accomplishing component ‘c’ healthcare
of component ‘c’ previously accomplishing assigned to component ‘c’ quality of healthcare within the service
within the estimated using quality of component characteristic ‘k’ for the Quality of service subsystem healthcare subsystem for
healthcare logic as shown in ‘c’ given by the within the characteristic component given by the group of service the
Components of service Table 2 group of experts component ‘k’ 4 ‘c’
 experts subsystem component ‘c’
subsystem subsystem NKc,k Oc,k Pc,k Pc,k ∗ NKc,k NKc Oc Pc Pc ∗ NKc
k=1

Equipment used 0 0 0 0
in the process
of Prescribing
therapy
Equipment used 0.798507 10 0.384615 0.307118

A. Živaljević et al.
in the process
of Treating
patients
Component Methods used in 0.776119 10 0.333333 0.258706 0.82853 10 0.185185 0.153431
‘Method’ the process of
within Examining
healthcare patients
service Methods used in 0.910959 10 0.333333 0.303653
subsystem the process of
Diagnosing
Methods used in 0 0 0 0
the process of
Prescribing
therapy
Methods used in 0.798507 10 0.333333 0.266169
the process of
Treating
patients
Component Materials used in 0.701493 1 0.090909 0.063772 0.90382 8 0.148148 0.133899
‘Material’ the process of
within Examining
healthcare patients
service Materials used in 0 0 0 0
subsystem the process of
Diagnosing
 Materials used in 0 0 0 0
the process of
Prescribing
therapy
Materials used in 0.924051 10 0.909091 0.840046
the process of
Treating
patients
Component Information used 0.688525 10 0.294118 0.202507 0.77133 8 0.148148 0.114271
‘Information’ in the process
within of Examining
healthcare patients

The Service Industries Journal

service Information used 0.716418 10 0.294118 0.210711
subsystem in the process
of Diagnosing
Information used 0.893443 10 0.294118 0.262777
in the process
of Prescribing
therapy
Information used 0.810345 4 0.117647 0.095335
in the process
of Treating
patients 
8
Nk = Pc ∗ NKc 0.808734
c=1

535
 536
Table 4. Non-conformities with their occurring frequency per month.

Frequency per month Frequency per month Frequency per month

Month In sixth Month In sixth Month In sixth
before the month of before the month of before the month of
Description of non- model the model Description of non- model the model Description of non- model the model
conformity using using conformity using using conformity using using
Information filed in wrong 31 7 Inappropriate response to an 1 0 Errors in the diagnosing 5 0
place or wrong time abnormal diagnostic image due to equipment
malfunctioning
Entire patient’s chart or 11 0 Physician did not receive 5 2 Results of procured 21 21
part of the chart could accurate results of a analyses or examinations
not be accessed when diagnostic image in a from other healthcare

A. Živaljević et al.
needed timely fashion facilities were not
available on time
Results of procured 3 3 Wrong medication or wrong 2 0 Errors arising during the 9 1
analyses or dose of medication ordered performance of a clinical
examinations from or medication not ordered task due to a lack of
other healthcare by physician when clinical knowledge or
facilities were not appropriate skills
reliable or accurate
Delays in scheduled time 56 8 Wrong treatment ordered or 9 1 Errors in the process of 13 1
for patient’s admission treatment not ordered when obtaining information
more than 5 min appropriate from patients by
physician
Care provided was not 14 0 Failures on equipment 14 2 Paying costs was not on 12 11
documented time
Wrong test ordered or test 16 3 Wrong treatment decision 2 1 Errors in patient’s 17 4
not ordered when arising from a lack of movement through the
appropriate from clinical knowledge or skills healthcare delivery
laboratory system
Item(s) of information 8 1 Error in the process of 9 0 Error in the process of 8 3
missing from chart dispensing medication as receiving accurate
ordered material in a timely
fashion
Errors in the process of 4
obtaining or processing
a laboratory specimen
Patient did not understood 28
physician
Error in the process of 5 4
receiving accurate
medications in a timely
fashion
Paying costs was 7 0
insufficient or too much
Inappropriate response to 6
an abnormal laboratory
result
Total of non-conformities
0 Error in the process of 10 3 Error in the process of 2 0
providing treatment other receiving accurate
than medication equipment in a timely
fashion
4 Medications date of use 6 0 Wrong or missed diagnosis 4 1
expired
Error in the process of 16 3 Delays in the delivery of 24 0
physician receiving services due to lack of
accurate laboratory results staff with required
in a timely fashion knowledge or skills
Errors in communication with 6 0 Wrong bill was delivered to 37 2
The Service Industries Journal
physicians outside the a patient
healthcare facility
0 Delays in the delivery of 16 2 Errors in the process of 4 0
services due to lack of obtaining or processing
equipment of a diagnostic image
In a month before the model implementation 441
In fourth month of the model using 88
537
538 A. Živaljević et al.

Figure 3. Decrease in non-conformities in percentage.

In the third phase defined parameters were monitored and measured and their
measured values were compared to target values. Quality parameters that were monitored
in the first health centre for the process of examining patients (Table 1), along with their
target values and tolerance range are given in Table 2. Using the logic of the mathematical
part of the model, the quality of the healthcare service subsystem is calculated and pre-
sented in Table 3. Tables 2 and 3 contain measured values of quality parameters and
present an example of the mathematical model implementation that was applied in the
first healthcare centre.
The first healthcare centre has been applying the conceptual model for 6 months now,
and processes were redesigned in order to conduct optimal flow that provides maximum
reliability of quality outputs and compliance to ISO 9001. Costs have increased due to
the investment in employees’ knowledge and skills in the field of quality management,
teamwork, and communicating with more demanding clients. This was expected at the
beginning of model implementation. Knowledge and skills in communication and man-
agement proved to be the cause of lower quality of the process of management review,
and of the process of providing the healthcare services due to measured values of
quality parameters referred to employees’ knowledge deviated from the target value.
In the second healthcare centre market share has increased by 3.2% and patients’
satisfaction also slightly increased during the 4 months of conceptual model usage. It is
a result of the implementing marketing subsystems’ processes, none existing before in
specific healthcare centre. The number of system errors, delays in service providing and
in other process running dramatically decreased as a result of optimal running of manage-
ment subsystem’s processes and process of monitoring quality parameters within the
quality subsystem.
Table 4 contains data about non-conformities that were found in the second healthcare
centre a month before the model implementation and in the sixth month of the model
usage. Non-conformities were found by analysing documents related to the reference
 The Service Industries Journal 539

periods. Figure 3 shows improvement in healthcare centre seen through decreasing the
number of non-conformities.
Analysing both examples in the first 6 months of conceptual model application the
following benefits could be identified:
. System errors reduction
. Delays reduction in processes of healthcare service provision and other process
running
. Increase of existing patients’ satisfaction
. Market share increasing
. Clear identification of true causes of poor quality in a shorter time period
. Increase in knowledge, motivation and participation of employees
. Compliance of procedures with the requirements of standards arise from the
conceptual model
Limitations of model implementation are as follows:
. The model requires additional work and the effort of all employees in monitoring
and measuring quality parameters
. Proper application of the model requires an additional knowledge of employees in
the field of quality management
. Employees should learn process flows they do not currently perform but are directly
related to the processes they perform themselves
Limitations of research on the conceptual model implementation could be found in the
sample size while only two healthcare business systems have implemented the model.
Also, the time period of the model application while the authors were collecting data is
not enough to be certain of the contribution of the model.

Conclusions
Understanding the healthcare organization as a system and decomposing it into parts con-
tributed to identification of areas that affect the quality of healthcare organization and its
services. It resulted in a conceptual three-level hierarchical model which contains
elements that have an impact on the functioning of healthcare organizations and quality
of its outputs. The model supports monitoring errors and non-conformities in healthcare
organization and identification of their cause by monitoring and measuring quality par-
ameters. Measured values of quality parameters compared to their target values indicate
causes of errors and non-conformities. It supports monitoring and measuring of each
part’s quality and respects its importance in achieving quality of entire healthcare organ-
ization. The conceptual model could be used for software or procedures design in the case
of specific healthcare organizations, so that no elements influencing healthcare organiz-
ation functioning and quality of its outputs are forgotten in the model. Conformance of
the conceptual and mathematical model with most used directions (Shaw, 2001) in
quality assurance and improvement in healthcare organizations are assured through
quality subsystem functioning (see Table 1, quality subsystem).
The mathematical model allows the translation of large amounts of data related to
qualities of healthcare organization’s elements in a simple concise form that patients
can use to choose their healthcare provider, while it sets the final value of quality regarding
all parameters in the range from 0 to 1. Value setting enables the comparison of the quality
of healthcare organizations that use the same mathematical and conceptual model.
540 A. Živaljević et al.

The conceptual model for quality assurance and improvement in healthcare organiz-
ation consists of three hierarchical levels: system, subsystems and components. The con-
ceptual model sees healthcare organization as a business system that consists of eleven
subsystems. Furthermore, each subsystem represents a set of components, each consisting
of characteristics. Every characteristic has a different impact on the functioning of
healthcare organizations and quality of its outputs. Control of characteristics’ quality,
by measuring and monitoring the value of pre-defined quality parameters, assures
quality of healthcare organization and its services while it points out the causes of
quality degradation.
The conceptual model for quality assurance and improvement in health care is a base
for the mathematical model, which can be used to evaluate quality of characteristics,
components, subsystems or systems as a whole.
Given that the mathematical model is based on a comparison between planned and
realized values of parameters, while planned values are defined according to patients’
requirements and competition (see Table 1, marketing subsystem), it focuses on patients
and quality. The mathematical model can only be applied to real business systems, i.e.
on the processes, resources, inputs and outputs that exist, run and are used in healthcare
organization, while it is using real measured data to evaluate the quality of system, sub-
system, or its components and characteristics. The mathematical model allows compari-
sons in quality between more healthcare organizations that use the same conceptual
model, as well as a comparison in quality between the same elements of their systems.
However, the conceptual model can be used for simulations and testing options, designing
new processes or improving existing processes, resources or outputs. It can also be useful
in designing software for healthcare organization, while it stresses important elements that
influence quality of healthcare services, directly or indirectly by its relations.

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