Read the overview below and complete the question below:

Business process reengineering and continuous improvement efforts such as TQM and Six Sigma are both designed to improve efficiency and produce better product quality and greater customer satisfaction. The purposes for using operational improvement programs such as benchmarking, best practices, business process reengineering, TQM, and Six Sigma are to improve the performance of strategy critical activities and promote superior strategy execution. The goal of this exercise is for you to understand how process management tools like Six Sigma and TQM can drive continuous improvement in the performance of value chain activities.

Established in 1972, Charleston Area Medical Center (CAMC) is West Virginias largest health care provider in terms of beds, admissions, and revenues. In 2000, CAMC implemented a Six Sigma program to examine quality problems and standardize care processes. Performance improvement was important to CAMCs management for a variety of strategic reasons, including competitive positioning and cost control. The United States has been evolving toward a pay-for-performance structure, which rewards hospitals for providing quality care.

CAMC has utilized its Six Sigma program to take advantage of these changes in the health care environment. For example, to improve its performance in acute myocardial infarction (AMI), CAMC applied a Six Sigma DMAIC (define-measure-analyze-improve-control) approach. Nursing staff members were educated on AMI care processes, performance targets were posted in nursing units, and adherence to the eight Hospital Quality Alliance (HQA) indicators of quality care for AMI patients was tracked. As a result of the program, CAMC improved its compliance with HQA-recommended treatment for AMI from 50 to 95 percent. Harvard researchers identified CAMC as one of the top-performing hospitals reporting comparable data. Controlling cost has also been an important aspect of CAMCs performance improvement initiatives due to local regulations. West Virginia is one of two states where medical services rates are set by state regulators. This forces CAMC to limit expenditures because the hospital cannot raise prices. CAMC first applied Six Sigma in an effort to control costs by managing the supply chain more effectively.

The effort created a one-time $150,000 savings by working with vendors to remove outdated inventory. As a result of continuous improvement, a 2015 report stated that CAMC had achieved supply chain management savings of $12 million in the past four years. Since CAMC introduced Six Sigma, over 100 quality improvement projects have been initiated. A key to CAMCs success has been instilling a continuous improvement mind-set into the organizations culture. Dale Wood, chief quality officer at CAMC, stated: If you have people at the top who completely support and want these changes to occur, you can still fall flat on your face. . . . You need a group of networkers who can carry change across an organization. Due to CAMCs performance improvement culture, the hospital ranks high nationally in ratings for quality of care and patient safety, as reported on the Centers for Medicare and Medicaid Services (CMS) website.

Why is a commitment to quality control particularly important in the hospital industry?

Multiple Choice, Pick One:

It identifies downsizing opportunities across the hospital.

It streamlines the hospitals work efforts.

It improves competitive positioning and cost control.

It helps them achieve a 90% accuracy in performing tasks.

It improves the accuracy of administering the proper drug doses to patients.