Question 1. What is statistical process control?
Question 2. How can Statistical Process Control methods help to minimize errors?
Question 3. What are the potential benefits of this control process.
Unisys Corp's Costly Experiment in Health Care Services:
When Unisys Corp. expanded into the computerized health care service business thing looked rosy. It had just beat out Blue Cross/Blue Shield of Florida for an $86-million contract to serve Florida's state employee health-insurance services. Its job was to handle the 215,000 Florida employee's claims processing- a seemingly simple and lucrative growth area for an old-line computer company like Unisys.
But 1 year later the contract was not only torn up, Unisys was fined over $500,000 for not meeting quality standards. Here are two of the measures of quality, both attributes ( either defective or not defective) on which the firm was out of control:
1. Percent of claims processed with errors.
An audit over a 3-month period, by Coopers & Lybrand, found that Unisys made errors in 8.5% of claims processed. The industry standard is 3.5% defectives.
2. Percent of claims processed within 30 days.
For this attribute measure, a "defect" is a processing time longer than the contract's time allowance. In one month's sample, 13% of the claims exceeded the 30 day limit, far above the 5% allowed by the State of Florida.
The Florida contract was a migraine for Unisys, which underestimated the labor-intensiveness of health claims. CEO James Unruh pulled the plug on future ambitions in health care. Meanwhile, the State of Florida's Ron Poppel says, "we really need somebody that is in the insurance business.
Souces: Kight Ridder Tribune Business News (2/7/2002)