College of Business Administration University of Rhode Island

William A. Orme

WORKING PAPER SERIES

encouraging creative research Multivariate Quality Control Charts and Its Use in Health Care Monitoring and Improvement: Decision Makers Perspective Jeffrey E. Jarrett and Xia Pan

2007/2008
This working paper series is intended to facilitate discussion and encourage the exchange of ideas. Inclusion here does not preclude publication elsewhere. It is the original work of the author(s) and subject to copyright regulations.

No. 4

Office of the Dean College of Business Administration Ballentine Hall 7 Lippitt Road Kingston, RI 02881 401-874-2337 www.cba.uri.edu

ritle Page including Author Details

Multivariate Quality Control Charts and Its Use in Health Care Monitoring and Improvement: Decision Makers Perspective

Jeffrey E. Jarrett, Ph.D. University of Rhode Island (USA) jejarrett(ii>,mail.uri.edu Xia Pan, Ph.D. Macau University of Science and Technology (China)

Manuscript excluding Author Details

ABSTRACT
The duty of the health care is to supply and integrate all functions to provide health maintenance and acute and long-term care services to an aging but still very active population. In this analysis, we suggest better methods for monitoring the health diagnostic and treatment services of providers of care. In particular, we examine the construction and use of industrial quality control methods as they apply to the health care providers both in the prevention and cure for infectious diseases and the performance of health care providers especially acute care hospitals. We suggest modern and multivariate applications of quality control techniques common in industrial applications to be utilized in the health care sector to both control and improve quality of these services. We illustrate these methods.
Keywords: Quality Control, Multivariate Quality Control Charts, Health Care Providers, Monitoring Performance

Introduction

Decision makers recommend standard control charts for use in monitoring and improving hospital performance. Some examples include the monitoring of infection rates, waiting times for diagnostic procedures and the rates of patient falls. These applications developed originally for industrial statistical process control include

Benneyan (1998a, b), Lee and McGreevey (2002), and Benneyan

(2003). Books

written by Cary (2003), Hart and Hart (2002) and Morton (2005) also introduce decision makers in the health care area to additional applications of standard SPC Charts in the monitoring of health care services and products. Our purpose in this study is to explain the need to improve these applications in the health care arena to produce both quality control and improvement in this very important and vital area. Our purpose is, also, not to distinguish the differences between monitoring chronic diseases and infectious diseases nor the surveillance of infectious diseases. These last methods require the use of advanced time series models to account for seasonal effects. One may read VanBrqackle and Williamson (1999) for the details on these methods.

An Example in Health Monitoring

The primary objective of any process control method is to minimize the fkequency of false signals or actions, and to rapidly detect external sources of variation in the process. The conventional Shewhart subgroup control model achieves this objective, providing successive process observations are independent. Unfortunately, many service industry processes are known to follow first-order, positive autoregressive time series. The existence of autoregression in the process violates the basic assumptions of the Shewhart model and alternative models have recently been suggested for dealing with autoregression. This research evaluates the performance of the Shewhart subgroup model, and two new control models, the AEWMA centerline model suggested by Montgomery and Mastrangelo (1991), and the fixed limit chart of Alwan (1992) at autoregression levels from 0.2 to 0.8

Standard quality control charts do have applications in health care surveillance and there exist many applications of these methods. For example, one may apply the CUSUM chart for any specified underlying probability distribution which characterizes the model generating data on the application of a particular health service. This very practical and useful technique based on standard statistical practice does provide a method by which decision makers can evaluate the quality of the serve they provide. However, Steiner g t al. (2000) described the use of a risk-adjusted application based on meaningful performance criteria which has optimality properties with respect to its ability to detect process shifts (Spiegelhalter, 2004). These process shifts are not easily recognized by the standard CUSUM chart. In addition, Rogers d(2004) stated that

other methods not described here may provide equally beneficial performance. This debate on the use of one such standard method of quality control and improvement (CUSUM Charts) is not our focus in this study. We do recognize the benefits of implementing simple industrial quality methods in the health care sector and its supply chain. Our purpose here is not to argue the robustness of CUSUM charts but to encourage the use of industrial tools such as control charts and to investigate further the health-care applications of SPC to improve health care. The desire for improved health care is a well established principle in the general field of decision making. Practitioners and researchers in industrial statistics have additional important contributions to the theory and further development of procedures to monitor and improve health care and hospital applications with the purpose of improving specific and general health care of the population.

In the next sections, we explore how one may improve health monitoring in the
heal care supply chain by the use of multivariate quality control charts as opposed to standard techniques currently in use. This is particularly important because health care application involve two or more related variables in the diagnoses and treatment of chronic and infectious diseases.
Current Application of Standard Shewhart Control Charts

To display data from two or more related measurement variables simple control charts of the Shewhart type may not be use for a variety of reasons. A multivariate quality control chart shows how several variables jointly influence a process or outcome. For example, you can use multivariate control charts to investigate how the tensile strength and diameter of a fiber affect the quality of fabric. Similar examples exist in producing Silicon rods, industrial gases and semiconductors and in the designing of software to manufacture semiconductors. If the data include correlated variables, the use of separate control charts is misleading because the variables both jointly and individually affect the process. If you use separate single variable quality control charts in a multivariate situation, the error of rejecting a true null hypothesis (Type I error) and the probability of a point correctly plotting in control are not equal to their expected values. That is, the plot is incorrect which may lead to a false signal. The distortion of these values increases with the number of measurement variables. In complex production and operations processes the numbers of variables are many. Multivariate quality control charts (Hotelling, 1947, and Jackson, 1956, 1959 and 1985) have several advantages over creating multiple univariate charts for the same business situation:

1. The actual control region of the related variables is represented. In the bivariate case the representation is elliptical.

2. You can maintain a specific probability of a Type I error (the a risk).

3. The determination of whether the process is out of or in control is a single control

limit... On the other hand, decision-makers have more difficulty interpreting multivariate charts than interpreting the classic Shewhart control chart. For example, the scale on multivariate charts is unrelated to the scale of any of the variables, and an out-of-control signal does not reveal which variable (or combination of variables) causes the signal. Often, one determines whether to use a univariate or multivariate chart by constructing and interpreting a correlation matrix of the pertinent variables. If the correlation coefficients are greater than 0.1, you can assume the variables correlate, and it is appropriate to construct a multivariate quality control chart The development of information technology enables the collection of large-size data bases with high dimensions and short sampling time intervals at low cost. Computational complexity is now relatively simple for on-line computer-aided processes. In turn, monitoring results by automatic procedures produces a new focus for quality management. The new focus is on fitting the new environment. Statistical Process Control (SPC) now requires methods to monitor multivariate and serially correlated processes existing in new industrial practice. Illustrations of processes which are both multivariate and serially correlated are numerous in the production of health services and the prevention of infectious diseases as

well as in industrial practice. In service industries, the correlation among processes are serial because due to the inertia of human behaviors, and also cross-sectional because of the interactions among various human actions and activities. This is true also for the prevention and care of infectious diseases where medical practice and drug use correlate with each other and other factors in both the cure and prevention of disease. As an example, the number of visits to an emergency facility in a hospital may be serially dependent and also related to (1) the waiting time for service provided by a nearby alternative emergency facility and (2) the cost and convenience of transportation to a facility at a greater distance from those in need for ER services.. Furthermore, the latter factors are also autocorrelated and cross-sectionally correlated to each other. Hospital and health care management and span of control problems relate units of health care services to internal economic factors such as inventory, extent of heal insurance, labor and materials costs, and environmental factors such as outputs, input prices, specific demands, and the relevant economy of health care in general. These problems are multivariate and serially correlated because one factor at one point in time is associated with other factors at other points in time (past, present, and future). SPC emphasizes the properties of control for decision making while it ignores the complex issues of process parameter estimation. Estimation is less important for Shewhart control charts for serially independent processes because the effects of different estimators of process parameters are nearly indifferent to the criterion of average run length (ARL). Processes' having serial correlation, estimation becomes the key to correct construction of control charts. Adopting workable estimators is then an important issue.

In the past, researchers studied SPC for serially correlated processes and SPC for multivariate processes separately. Research on quality control charts for correlated processes focused on univariate processes. Box, Jenkins, and MacGregor (1974) and Berthouex, Hunter and Pallesen (1978) noticed and discussed the correlated observations in production processes. Alwan and Roberts (1988) proposed a general approach to monitor residuals of univariate autocorrelated time series where the systematic patterns are filtered out and the special changes are more exposed. Other studies include Montgomery and Friedman (1989), Harris and Ross (1991), Montgomery and Mastrangelo (199 l), Maragah and Woodall (1992), Wardell, Moskowitz, and Plante (1994), Lu and Reynolds (1999), West, Delana and Jarrett (2002) and West and Jarrett (2004). English and Sastri (1990) and Pan and Jarrett (2004) suggested state space
methodology for the control of autocorrelated process.

In Alwan and Roberts's approach (1992), a time series is separated into two parts
that are monitored in two charts. One is the common-cause chart and the other is the special-cause chart. The common cause chart essentially accounts for the process's systematic variation that is represented by an autoregressive-integrated-moving-average (ARIMA) model, while the special cause chart is for detecting assignable causes that can be assigned in the residual of the ARIMA model. That is, the special cause chart is designed as Shewhart-type chart to monitor the residuals filtered and whitened from the autocorrelated process (with certain or estimated parameters). A quick way to see the advantages of MQC is to superimpose univariate control charts on top of each other and create a graph of all the points of each control chart in an area of space. This is shown in the following figure:

Insert Figure 1 here

This figure shows a scatter of multivariate data composed of two variables. The individual control limits for each variable's respective univariate chart are shown in the control rectangle. This particular pattern shows that the process is in-control for each individual variable since the data points fall within the control rectangle [Mastrangelo

d., 1996; Tracy etal., 19921. However, when the variables are correlated (as they often
are when from the same process), superimposing univariate charts is not a useful method of monitoring processes since relationships between the variables are not capitalized upon and the probability of both charts simultaneously plotting in control is not l-a . If a process is in-control, the probability o f p means plotting in control is (1 - a) p. Thus, the joint probability of a type I error is much larger: (1 - a) p [Alt, 1982; Alt, 1984; Jackson, 19851. Multivariate quality control (or process monitoring) originally developed by Hotelling (1947) applied his procedures to data on allied bomb sites during the second World War. Subsequently, others (Hicks, 1955, Jackson, 1956, 1959, 1985, Crosier, 1988, Hawkins, 1991, 1993, Lowry

d.,1992,

Lowry and Montgomery, 1995,

Pignatiello and Runger, 1990, Tracy, Young and Mason, 1992, and Alt, 1985, among others) produced application in a wide variety of management settings where two or more variables interrelate. In these setting, the size of the databanks is in millions of individual records on hundreds of variables. Monitoring and quality control and improvement methods of the univariate type are either ineffective or misleading in these environments. Hence, in recent years the implementation of multivariate process monitoring procedure rapidly developed.

In another example, a production manager interested in monitoring camshaft

production example a sample of size 5 for twenty days for three correlated variables ( i.e., length, raw material supplier 1 and raw material supplier 2) through a period of days. You randomly sample five items each day to and measure the effects. Because length of the camshaft and raw materials supplies are correlated, one creates a Hotelling T2 control to monitor the measurements for the three variables (i.e., length, supplier 1 and supplier 2. By creating T2 control chart to monitor the mean measurements for the three variables simultaneously. Insert Figure 2 here

In Figure 2, the multivariate control contains only one control limit although the
median line is printed in this version. The T2chart shows two out-of-control points: 8 and 14 Point 8 is out of control due to length and Suppler 1. Point 14 is out of control due to Supplier 2. At this time, the quality manager needs to investigate what special causes may have affected length and supplier 1 in one sample and supplier 2 in another sample. If the quality manager printed three univariate control charts, no points would have been out of control. The obvious advantage of multivariate monitoring is easily withy the above results. Insert Figure 3 Here You will note from figure 3, that no points are out of control. This is the multivariate form of the S chart. You can use it to simultaneously monitor the process variability of two or more related process characteristics. For example, we can monitor the length of the camshaft and at the same time monitor the data from suppliers 1 and 2.

By so doing, we determine if these variables jointly remain constant of the course of the production or service process. If we choose to analyze the same data to control the mean and variation in the length variable for the camshaft the results follow: Insert Figure 4 here The mean and standard deviation charts drawn by customary methods appear in Figure 4. The mean chart shows an out-of-control signal at point 8. However, the standard deviation chart shows no point out-of-control. Although not shown here the Range chart also does not show out-of-control signals. How do we interpret the various results of the four control charts drawn by both the univariate and multivariate methods? The univariate results indicate one out-ofcontrol point in the mean only at point 8. The multivariate methods indicate that at point 8, the camshaft length variable is out of control and so is the variable for supplier 1. Hence, we associate the out-of-control signal in the mean length at point 8 to the out-ofcontrol signal for supplier 1 at the same point. In addition, there is an out-of-control signal emanating from supplier 2. We locate thep-values for the out-of-control signals at the bottom of Figure 2 and that these are very small probabilities (.0002 to .0299). Besides the "six sigma control" tests described here, there are many other tests for special causes associated with these control charts. At this point, you can conclude that multivariate quality control does provide additional evidence necessary for management to control and improve the quality of processes. This paper discusses the control chart that use vector autoregressive (VAR) models and combines Alwan and Roberts's residual chart and traditional Multivariate

Hotelling T~ chart to monitor multivariate serially correlated processes. The scheme can be viewed as a generalization of Alwan and Roberts's special cause approach to multivariate cases. The guideline and procedures of the construction of VAR residual charts are detailed in this paper. Molnau g t a. (2001) produces a method for calculating
average run length (ARL) for multivariate exponentially weighted moving average charts

(2001). Mastrangelo and Forrest (2002) simulated a VAR process for statistical process control (SPC) purposes. However, the general study on VAR residual charts is heretofore not reported. Although most of the methods used in this paper on VAR model estimation and its approximation to vector autoregressive-moving-average(ARMA) models exists in the literature of econometrics and mathematical statistics. A general consideration and summarization for control chart construction using this model does not appear in SPC research, so this paper should be still useful for multivariate quality control practice.

Additional Commentary and Conclusion

The conventional multivariate control charts describe by example above assume the in-control samples are independently and identically distributed (i.i.d.) over time while the variables are correlated, that is, they follow an i.i.d. multivariate distribution. When each variable is normal, these variables have a multivariate normal distribution. For the individual measurements (sample size r =l), the distribution of Phase I follows Beta distribution (see Tracy

al. 1992; Weirda 1994; or Sullivan and Woodall 1996). As

long as the assumption fit the physical applications of quality control and improvement, the multivariate method will provide managers with more informative and better results when monitoring output of processes.

In the future, we will observe new developments in multivariate application in

quality control. Newer methods for monitoring variation in output processes include control charts that use vector autoregressive (VAR) models and combine Alwan and Roberts's residual chart and traditional Multivariate Hotelling T' chart to monitor multivariate serially correlated processes. We view this scheme as a generalization of Alwan and Roberts's special cause approach to multivariate cases. The guideline and procedures of the construction of VAR residual charts are detailed in this paper. Molnau et al. (200 1) produces a method for calculating average run length (ARL) for multivariate -exponentially weighted moving average charts. Mastrangelo and Forrest (2002) simulated a VAR process for statistical process control (SPC) purposes. However, the general study on VAR residual charts is heretofore not reported. Although most of the methods used in this paper on VAR model estimation and its approximation to vector autoregressivemoving-average (ARMA) models exists in the literature of econometrics and mathematical statistics. A general consideration and sumrnarization for control chart construction using this model does not appear in SQC research. Most important these applications should be still useful for multivariate quality control practice

References
Alt, F. B. (1 985) "Multivariate Quality Control," in Encyclopedia o f Statistical Sciences, Vol. 6, Johnson, N. L. and Kotz S. (eds.) Wiley Alwan, B.M., and H.V. Roberts (1988). "Time-Series Modeling for Detecting Level Shifts of Autocorrelated Processes", Journal o f Business and Economics Statistics. 6, 1, 87-96 Alwan, L.C. (1992), "Effects of Autocorrelation on Control Charts, "Communications in Statistics-Theoly and Methods, 2 1,4, 1025-1049

Berthouex, P. M., Hunter, E. and Pallesen, L (1978), "Monitoring Sewage Treatment Plants: Some Quality Control Aspects," Journal o f Quality Technology, 10,4, 139-149 English, J.R. and Sastri, T. (1990). "Enhanced Quality Control in Continuous Flow Processes", Computers and Industrial Engineering, 19,258-262 Hotelling, H. (1947) "Multivariate Quality Control," Techniques o f Statistical Analysis, Eisenhart, Hastay, and Wallis (eds.), McGraw-Hill Harris, T. J., and Ross, W. H. (1991), "Statistical Process Control Procedures for Correlated Observations," Canadian Journal o f Chemical Engineering, 69,48-57. Hawkins, D.M.(1991). "Multivariate Quality Control Based on Regression Adjusted for Variables", Technometrics, 33, 1,6 1-75 Hawkins, D. M. (1993) "Regression Adjustment for Variables in Multivariate Quality Control," Journal o f Quality Technology, 25,3,37-43 Jackson, J.E. (1956) "Quality Control Methods for Two Related Variables," Industrial Quality Control, 12,7,4-8 Jackson, J.E. (1959) "Quality Control Methods for Several Related Variables," Technometrics, 1,4,359-377 Jackson, J.E. (1985) "Multivariate Quality Control", Communications in Satistics-Theory and Methods. 14, 110,2657-2688 Lowry, C. A. W. Woodall, CW. Champ and S.E. Rigdon (1992) "A Multivariate Exponentially Weighted Moving Average Control Chart", Technometrics, vol. 34,46-53 Lowry, C. A. and Montgomery, D.C. (1995) "A Review of Multivariate Charts, IIE Transactions, 27,800-8 10 Lu, C.W., and M.R. Reynolds (1999) "Control Charts for Monitoring the Mean and Variance of Autocorrelated Processes", Journal o f Quality Technology 3 l , 259-274 Maragah, H.O., and Woodall, W.H. (1992). "The Effect of Autocorrelation on the f Statistical Computation and Simulation, 40, 1,29-42 Retrospective X-Chart," Journal o Mastrangelo, C.M. and Forrest, D. R. "Multivariate Autocorrelated Processes: Data and Shfi Generation," Journal o f Quality Technology, 34,2,216-220

Molnau, W.E., Montgomery, D. C., and Runger, G.C. (2001) "Statistically Constrained Economic Design of the Multivariate Exponentially Weighted Moving Average Control Chart," Quality and Reliability Engineering International, 17, 1,39-49 Montgomery, D. C. and C. M. Mastrangelo (1991). "Some Statistical Process Control f Quality Technology, Vol. 23. July 1991 Methods for Autocorrelated Data, Journal o
"

Montgomery, D. C. and J.J.Friedrnan (1989). "Statistical Process Control in a ComputerIntegrated Manufacturing Environment," Statistical Process Control in Automated Manufacturing, edited by J.B. Kates and N.F. Hunele, Marcel Dekker, Inc. Series in Quality and Reliability, New York Pan, X. and J. Jarrett (2004) "Applying State Space into SPC: Monitoring Multivariate Time Series," Journal o f Applied Statistics, 3 l , 4,397-4 18 Pignatiello J. J., Jr. and Runger, G. C. (1991) "Adaptive Sampling for Process Control: Journal o f Quality Technology, 22,3,173- 186 Sullivan, J.H. and Woodall, W. H. (1996) A Review of Multivariate Charts, Journal o f Quality Technology, 28,4,26 1-264 .Tracy, N.D., Young, J.C. and Mason, R.L. (1992). "Multivariate Quality Control Charts for Individual Observations", Journal o f Quality Technology, 24,2,88-95. Wardell, D.G., Moskowitz, H. and R.D. Plante (1994). "Run-Length Distribution of Special-Cause Control Charts for Correlated Processes", Technometrics, 36. West, D., Delana, S. and Jarrett, J. (2002). "Transfer Function Modeling of Processes with Dynamic Inputs," Journal o f Quality Technology 34,3,3 15-321 West, D. and Jarrett, J. (2004), "The Impact of First Order Positive Autoregression on Process Control," International Journal o f Business and Economics, 3, 1,29-37 Wierda, S.J. (1994). "Multivariate Statistical Process Control: Recent Results and Directions for Future Researches", Stastica Neerlandica, 48, 147-168

I
I
I

. .

I
I

Central Line

I ............................................................................

Lower Limit

m
Lower Limit

Central Line

l
Upper Limit

Conclusion: No points out of control.

Figure 2

9
Sam

Test Results for Tsquared Chart of Length,

Point G r e a t e r T h a n UCL

...,Supp2
P-Value

Variable Length

14

SUPP~ Supp2

0.0022 0.0299 0.0002

Figure 3

Note: No points are above the UCL. Since LCL = 0,they cannot be small than the LCL.

Figure 4

Note: The mean chart shows an out-of-control signal at point 8. However, the standard deviation chart shows no point out-of-control. Although not shown here the Range chart also does not show out-of-control signals.

Figure(s)

............................................................................
I I
I
m .

I
I

- - m .
I

I
I

Central Line

...........................................................................
I I

Lower Limit

1
Lower Limit

Central Line

m
Upper Limit

Conclusion: No points out of control.

Test Results for Tsquared Chart of Length, ..., Supp2

Greater Than UCL

Point 8 14

Variable Length SUPP~ Supp2

P-Value 0.0022 0.0299 0.0002

&;
.- >
m+"
"4

,3,-

P&; Y ZYI~,

..

.
< . , S , :

- W

B
9".

Z.

-~eneralized Variance Chart of Length,

&

. ,

;*, <.

: ? ? P ?
r*

...
~

..., Supp2

'

I<

" .

* % . . . , d

bt
_ L

3n
1

ui'L=9.40
<
(

.$

*S

7-

6'0

Q
L

L a3

54-

lS l =L34

ta=o
1

11 same

13
.P l ,
i s

15

.
>

>

17 -. -

19
?

.-.I

Note: No points are above the UCL. Since LCL = 0 ,they cannot be small than the LCL.

Note: The mean chart shows an out-of-control signal at point 8. However, the standard deviation chart shows no point out-of-control. Although not shown here the Range chart also does not show out-of-control signals.

Founded in 1892, the University of Rhode Island is one of eight land, urban, and sea grant universities in the United States. The 1,200-acre rural campus is less than ten miles from Narragansett Bay and highlights its traditions of natural resource, marine and urban related research. There are over 14,000 undergraduate and graduate students enrolled in seven degreegranting colleges representing 48 states and the District of Columbia. More than 500 international students represent 59 different countries. Eighteen percent of the freshman class graduated in the top ten percent of their high school classes. The teaching and research faculty numbers over 600 and the University offers 101 undergraduate programs and 86 advanced degree programs. URI students have received Rhodes, Fulbright, Truman, Goldwater, and Udall scholarships. There are over 80,000 active alumnae. The University of Rhode Island started to offer undergraduate business administration courses in 1923. In 1962, the MBA program was introduced and the PhD program began in the mid 1980s. The College of Business Administration is accredited by The AACSB International - The Association to Advance Collegiate Schools of Business in 1969. The College of Business enrolls over 1400 undergraduate students and more than 300 graduate students.

Mission
Our responsibility is to provide strong academic programs that instill excellence, confidence and strong leadership skills in our graduates. Our aim is to (1) promote critical and independent thinking, (2) foster personal responsibility and (3) develop students whose performance and commitment mark them as leaders contributing to the business community and society. The College will serve as a center for business scholarship, creative research and outreach activities to the citizens and institutions of the State of Rhode Island as well as the regional, national and international communities.

The creation of this working paper series has been funded by an endowment established by William A. Orme, URI College of Business Administration, Class of 1949 and former head of the General Electric Foundation. This working paper series is intended to permit faculty members to obtain feedback on research activities before the research is submitted to academic and professional journals and professional associations for presentations. An award is presented annually for the most outstanding paper submitted.

Ballentine Hall Quadrangle Univ. of Rhode Island Kingston, Rhode Island