Five Why’s Root Cause Analysis and Validation
Lukas Gorny
Grand Canyon University
BUS-470
August 15, 2020
Five Whys Root Cause Analysis
Defined Problem: The company is losing revenue and potential clients.
Why is the company losing revenue and potential clients?
· The company is losing revenue because of lower demand in services due to COVID-19 and because the competition is offering Telehealth services, which this company does not have.
Why is that?
· Many people don’t feel comfortable going to a clinic in person and prefer using online services. There is also a lot of competition in the market that offers Telehealth services which makes clients choose the competitor over this company. Also, because Telehealth services are improving, are more accessible, affordable, and because of the competitive market, patients have more providers to choose from.
Why is that?
· Is it a safer to use Telehealth Services than meeting with a counselor in person. As a result of COVID-19, there was a need and increase in people seeking and requiring mental health and substance abuse treatment. With telehealth, clients are able to safely seek or continue treatment. It is also a more convenient alternative during as well as after the COVID-19 pandemic to connect.
Why is that?
· Because the majority of the states were on lock down, many services didn’t operate as usual. Transportation services were limited, people were scared to leave their house, and the risk of potential exposure made people stay home and seek other alternatives to connect with counselors.
Why is that?
· Because of safety reasons and because some people do not like face to face meetings, especially because there is a lot of shame and guilt associated with admitting that there is a problem. Online services would have allowed the company to market to that segment of the population which would have benefited the company during and long after the COVID-19 pandemic.
Why is that?
· Telehealth services are less expensive and insurance companies are starting to cover the cost. Also, there is an increased demand because people’s schedules do not always allow them to travel to a physical facility. Furthermore, sometimes people cannot travel because of personal reasons, or they are intoxicated, or have too much anxiety to travel.
Finally, validate the root causes (or causes) of the problem. Validation of root causes requires collecting data and reviewing reporting or survey results. The validation phase separates the “noise” from real root causes of the problem. Noise is considered any item of low impact and low volume; however, it may be a recent event that individuals considered when brainstorming, like system downtime.
In the United States, the mental health and substance abuse industry is estimated to be $18.7 billion by the end of 2020. In March of 2020, demand went up by 50% when people were mostly looked up under stay at home orders. This resulted in approximately 8.4 million (8.3%) of 100.9 million ED visits in the U.S. during this time period were for psychiatric or substance use-related diagnoses (Gramigna, 2020).
CNBC reported that virtual health-care interactions were on pace to top 1 billion by the end of 2020 (Coombs, 2020). The demand for substance abuse and mental health counseling has been increasing steadily over the last couple of years but has really picked up stem during the pandemic. Many companies were able to quickly adopt to switch to online counseling via Telehealth Services.
By the company not being able to offer Telehealth services, it saw a decline in inpatient activity which resulted in a revenue loss. The loss of revenue could potentially result in cost cutting measures which would most likely affect the workforce, which is already strained. Telehealth Services will provide the company with the opportunity to provide mental health and substance abuse treatments remotely, thus generating revenue for the company and mitigating the loss of revenue during the pandemic.
Even after the pandemic, it is estimated that revenue for mental health and substance abuse disorder services will be around $240 billion by 2026 (K, 2020). It is therefore important that the company’s leadership takes into consideration the external, internal, and revenue factors when considering whether to start to offer Telehealth services to new and existing clients.
References
K, S. (2020). Telehealth Services and Mental Healthcare. Retrieved from https://start.askwonder.com/insights/one-questions-break-internationally-usa-how-people-using-telehealth-service-uj9wmzu7v
Gramigna, J., MA. (2020). ED visits for mental health have increased significantly in past decade. Retrieved from https://www.healio.com/news/psychiatry/20200813/ed-visits-for-mental-health-have-increased-significantly-in-past-decade
Coombs, B. (2020). Telehealth visits are booming as doctors and patients embrace distancing amid the coronavirus crisis. Retrieved from https://www.cnbc.com/2020/04/03/telehealth-visits-could-top-1-billion-in-2020-amid-the-coronavirus-crisis.html
