COMMENTARY

Pareto's Principle in Hospital Medicine

Suneel Dhand, MD

December 03, 2014

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Editor's Note: This post originally appeared at the Society of Hospital Medicine's blog, The Hospital Leader.

There are certain universal laws that appear to govern the broader workings of the world around us. For those of you unfamiliar with the Pareto principle, it's a concept that was first applied in economics and then found to be a governing rule in a whole host of different arenas. It's no understatement to say that understanding and acting upon this concept can be transformative, not just in your work but also your personal life.

The Pareto principle also has become a popular area of focus in the world of business and management. Named after the 19th-century Italian economist Vilfredo Pareto, in a nutshell, the principle is as follows: 80% of effects always come from 20% of the causes. Pareto first observed this ratio when he realized that 80% of land and wealth in Italy was owned by 20% of the population. He then went on to observe the same phenomenon in his garden—80% of peas came from 20% of pea pods!

Since Pareto published these findings, the magical ratio of 80/20 (or the "80/20 rule") has been scattered throughout society and nature. 80% of any company's profits come from 20% of their best products. 80% of traffic comes from 20% of roads. 80% of food production comes from 20% of the best crops.

The ratio is everywhere—frequently even tipped to a 90/10 or 95/5 division. However, the 80/20 phenomenon is the distribution most often cited as a universal baseline. That being the case, I thought I would apply the Pareto principle to the practice of hospital medicine:

80% of the clinical and problematic issues on any given day will arise from 20% of your patients.

80% of telephone calls and pages will always come from 20% of nurses.

80% of valuable medical information that you receive will come from only 20% of what's communicated to you.

80% of your job satisfaction will come from 20% of your daily interactions.

80% of compliments that your group receives will be about the good work of 20% of your physicians, and conversely, 80% of complaints will be about 20% of your physicians!

How are these statistics even relevant to the daily grind? Well, by recognizing the Pareto principle, we can set realistic expectations and focus on the most important areas to make our jobs more productive and satisfying. We can reverse the 80/20 equation to ask such questions as:

Which 20% of patients are going to take up 80% of my effort?

Which 20% of colleagues are responsible for 80% of what makes my work environment enjoyable?

Which 20% of my time is giving me 80% of my job satisfaction?

Which 20% of work-related issues are responsible for 80% of my job dissatisfaction?

Of course, the 80/20 percentage is not absolute, but it can act as a broad starting point of awareness in order to stand a better chance of improving things. Furthermore, remembering the Pareto principle can also save us from what I call "casting the net too wide syndrome."

For example, when I have sat on committees addressing such problems as readmissions, solutions are proposed that are all encompassing and don't adequately target who we should be. If 80% of readmissions come from 20% or less of the same congestive heart failure patients, then we should understand the characteristics of these 20% before we put excess effort into stopping readmissions among the 80% of patients who are very unlikely to be readmitted in the first place.

Another example: If we want to reduce unnecessary daily laboratory testing, who are the 20% of patients to whom this applies to the most? It will usually be those patients with longer lengths of stay, who may have multiple transitions and handoffs within the hospital. If we target all patients, we will expend too much energy addressing a problem that may not have existed in 80% of patients!

Applying the principle to our daily interactions in hospital medicine, if there are complaints about "specialist communication" or "soft admissions" from the emergency department, who are the 20% of physicians responsible for 80% of this? Let's shift the focus to them instead of making blanket statements about how bad the situation may be.

Acknowledging the value of and using the Pareto principle can help guide us through our days, and even our careers. Only when we home in on this natural distribution can we then do our best to skew it in our favor, and have an impact on better systems and practices.

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