Improving Healthcare at. Lean Six Sigma

(1)

Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare

Improving Healthcare at

Presbyterian Healthcare Services Using Presbyterian Healthcare Services Using Lean Six Sigma

(2)

Learning Objectives Learning Objectives Learning Objectives Learning Objectives

y Why we need to improve our processesy p p

y What is Lean Six Sigma

y Why do we need to have Lean Six Sigma

y Presbyterian Process for Improvement

C S di

y Case Studies

(3)

What you will gain What you will gain What you will gain What you will gain

y Introduction to Lean Six Sigmag

y What it takes to implement successful Lean Six Sigmaea S S g a

y How to sustain the gains from the improvement

improvement

(4)

THE BURNING THE BURNING THE BURNING THE BURNING PLATFORM

PLATFORM

(5)

Costs and Spending Costs and Spending Costs and Spending Costs and Spending

Health Care Cost in the United States

$2.3 Trillion 1980 1990 2008

$714 Billion

$253 Billion

Health Care Spending

KaiserEDU.org : Health Policy Explained – US Health Care Cost

http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx

(6)

What’s driving Healthcare Reform?

What s driving Healthcare Reform?

y Technology & Prescription Drugsgy p g

y Chronic Disease

y Aging of the Population

y Administrative Cost

(7)

What are the Major Proposals to What are the Major Proposals to Contain Cost?

Contain Cost?

y Investment in information technology

y Improving Quality and Efficiency

y Adjusting Provider Compensationj g p

y Government Regulation

y Prevention

y Increasing Consumer Involvement in purchasing

p g

y Altering the Tax Preference for Employer- sponsored insurancep

(8)

What do we all see as Customers What do we all see as Customers of Healthcare?

of Healthcare?

y Clinical Issues

L ED

◦ Long waits in ED

◦ Wrong Surgeries

◦ Prescribing wrong medicine and dosagePrescribing wrong medicine and dosage

y Financial Issues

◦ Incorrect Billing of charges

◦ Timely filing issues; denials from payers

◦ Inaccurate charges for procedures

◦ Poorly developed and inefficient processes

◦ Multiple handoffs and rework adding increasing cost

(9)

What’s really driving cost in What’s really driving cost in Healthcare

Healthcare

y Inefficient processesp

y Lack of communication

y Processes developed over time

y Band-Aid approach to fixing problems

C l b il d il

y Complex processes built around silos

(10)

WHAT IS LEAN SIX WHAT IS LEAN SIX WHAT IS LEAN SIX WHAT IS LEAN SIX SIGMA

SIGMA

(11)

DMAIC Methodology DMAIC Methodology DMAIC Methodology DMAIC Methodology

Define

Control

Improvement Control

Measure

Analyze Improve

Used to reduce defects or improve a current process

(12)

LEAN Methodology LEAN Methodology

Define

LEAN Methodology LEAN Methodology

Control

Define Value

Improvement

Process Measure

Value

Improve

Process-Flow Analyze Process-Flow Process Flow

Used to reduce waste or shorten cycle times

(13)

DMADV Methodology DMADV Methodology

Goal:

D l i

DMADV Methodology DMADV Methodology

Verify

Define

Developing a process that provides the

Customer the products and services

h b h i Verify

Measure

Design

that best meets their expectations.

Analyze Design

y

Used to create a new process

(14)

Lean Six Sigma Methodology Lean Six Sigma Methodology Lean Six Sigma Methodology Lean Six Sigma Methodology

Define V l

LEAN LEAN

Lean Improvement Control

Process Measure

Value Value

Improve Process-

Flow

Analyze Process-

Flow

DMAIC

DMAIC DMADVDMADV

Define C t l

DMAIC DMAIC

V if

Define

DMADV DMADV

Improvement Improve

Control

Measure

Verify

Design

Measure

Design

Analyze Improve

Analyze Design

(15)

Define:

Define: Scoping the Project Scoping the Project Define:

Define: Scoping the Project Scoping the Project

y Finding the Scopeg p

◦ Charter

◦ SIPOC

◦ Process Mapping

y Capturing the Voice of the Customer Capturing the Voice of the Customer (VOC)

◦ External view of our process and issuesExternal view of our process and issues

◦ Talk to our customers to understand their pain points

pain points

(16)

Define:

Define: Right Players on the Project Right Players on the Project Define:

Define: Right Players on the Project Right Players on the Project

y Oversight – Boards and Committeesg

y Leadership – Champions

y Ownership – Process Owners

y Ownership Process Owners

y Work – Team Members F ili Bl k B l

y Facilitators – Black Belts

(17)

Define:

Define: Capturing the Voice of the Capturing the Voice of the Customer

Customer

y Who is the Customer?

y What drives the Customers to have

difficulties with our products/processes?

y Where are the pain points in the process?

y How inefficiencies causes customer l i t ?

complaints?

y Translation of Key Issues to Critical to Quality

Quality

y Understanding of what we should be measuring

measuring

(18)

Measure:

Measure: Understanding Baseline Understanding Baseline Data

Data

y Using Data to make Decisionsg

◦ Stop using gut feel and anecdotes to make decisions

◦ Review the numbers to help truly identify problem areas

◦ Understand baseline to determine if changes make a difference

◦ Capture current performance levels

(19)

Measure:

Measure: Understanding the Basic Understanding the Basic Formula

Formula

Y = f(x) Y = f(x)

Process Process Input x₄

In-Proce In-Proce In-Proce

Step 1

Output Y

p ₄

Input x₅

ess x1 ess x2 ess x3

Step 2 Step 3 p

Step 4 p

Input x₆

7 8 9

Input x 7 Input x 8 Input x 9

Y

Y == f(xf(x₁₁) ) + + f(xf(x₂₂) ) + + f(xf(x₃₃) ) ++……+ + f(f(xx_n_n))

(20)

Measure:

Measure: Using Root Cause Using Root Cause Analysis Tools

Analysis Tools

y Use basic tools that have been around since for over 100 years

◦ Process Mappingpp g

◦ Cause and Effect Diagram

◦ Pareto Analysisy

◦ FMEA

(21)

Other Tools in the Toolbox Other Tools in the Toolbox Other Tools in the Toolbox Other Tools in the Toolbox

Lean Toolbox Six Sigma Toolbox

y Ohno Circle Ch

y 8 Waste Reduction

y 6S

y Group Huddle

y Charter

y SIPOC

y Process Map

y Pareto Analysis

C d Eff (I h k D )

y Value Stream Map (VSM)

y Product Process Flow (PPF)

y Full Work Analysis (FWA)

y Group Technology

y Cause and Effect (Ishikawa Diagram)

y FMEA

y Histogram

y Barrier Analysis

y Mistake Proofing

y Changeover

y Capacity and Labor Review

y Line Balancing

y Brainstorm/Affinitize

y Measurement System Analysis (MSA)

y Box Plots

y Basic Statistical Graphs

y Standard Work

y Kanban & Point of Use

y Video Analysis

y Visual Controls

y Process Capability

y Hypothesis Testing

y Design of Experiments (DOE)

y Pugh Selection Matrix

y + Others ^y Quality Function Deployment

(22)

Analyze:

Analyze: What Xs will make a What Xs will make a difference to the Y

difference to the Y

y Understand the affects of each root cause

y Understand the affects of each root cause (X) on the output (Y)

U b i d l i l

y Use basic data analysis tools

y Use statistics to test hypothesis

y Drive decision making using analysis tools

y Eliminate the Xs that don’t make a difference

(23)

Analyze:

Analyze: Understanding the Cause Understanding the Cause for Poor Performance

for Poor Performance Y

Y = =

^f(xf(x

88))

f(xf(x 66)) f(xf(x 44))

f(xf(x 33)) f(xf(x 22)

Y Y = =

(x(x 99))

)) f(xf(x 77)) f(f(

f(xf(x 55

f(xf(x 11))

Y

Y == f(xf(x₁₁) ) + + f(xf(x₅₅)) + + f(xf(x₇₇)) + + f(xf(x₉₉))

(24)

Analyze:

Analyze: Identifying the Critical Xs Identifying the Critical Xs Analyze:

Analyze: Identifying the Critical Xs Identifying the Critical Xs

Define

Understand _Define

• What’s the problem?

• What’s the customer telling us?

• What’s Critical for Quality?

the current problems

Measure

• Where’s the breakdown?

• Why’s the process failing?

Identify Potential (Xs) in all areas that may affect the

• Why s the process failing?

• How well are we doing?

Outcome (Y)

Validated Xs that attribute

Analyze

• Which Xs presents the biggest issues?

• Which Xs really causing a problem?

Validated Xs that attribute for the majority of the problems. What are the few areas that drive the poor performance.

(25)

Improve:

Improve: Develop Solutions to Develop Solutions to Eliminate Failures for Xs

Eliminate Failures for Xs

y Innovate through out of the box thinkingg g

y Shift your paradigm

y Status quo changes must be stopped

y Work with stakeholders to help develop ideas for improvement

ideas for improvement

(26)

Improve:

Improve: Working with Teams Working with Teams Improve:

Improve: Working with Teams Working with Teams

y Help spread process understandingp p p g

y Improve understanding of each other’s work

wo

y Promote team approach to problem solving

solving

y Break down silos across the system U th t ’ ll ti d t di

y Use the team’s collective understanding

(27)

Change Management Change Management Change Management Change Management

y Help with changep g

y Provide the need for change

y Constant communication from Sr

y Constant communication from Sr.

Leadership and through Project Team

y Provide upfront changes to help eliminate

y Provide upfront changes to help eliminate problems

W k ith k t ff i h t

y Work with key staff in each area to promote test of change

(28)

Improve:

Improve: Developing Solutions Developing Solutions Improve:

Improve: Developing Solutions Developing Solutions

y Use the Front Line Staff to identify y solutions

y Conduct pilot testing to test effectiveness Co uct p ot test g to test e ect ve ess of change

y Develop improvements throughout

y Develop improvements throughout testing process

y Implement multiple solutions to fix single

y Implement multiple solutions to fix single problem

(29)

Control:

Control: Sustaining the Gains Sustaining the Gains Control:

Control: Sustaining the Gains Sustaining the Gains

y Monitor and Show Performance

y Elicit improvements from all staff memberse be s

y Develop control plans to help determine actions

actions

y Setup the front line staff to self monitor

(30)

Change Management Change Management Change Management Change Management

y Communicate throughout the system from start to finish

y Change the culture through changing how we manage

y System thinking – identify process that best suits the organization

suits the organization

y Work as a team to eliminate system problems

problems

y Break down barriers

y Resource and supportResource and support

(31)

Why the Methodology Works Why the Methodology Works Why the Methodology Works Why the Methodology Works

y Organization Level

◦ Systematic and structured approach to problem solving and improvement

O i h i l l

◦ Oversight at various levels

◦ Senior management supported

O ti l L l

y Operational Level

◦ Meeting deliverables for tollgates

◦ Operation owned improvements

◦ Official handoff and transition improvements into Operations

into Operations

1 Internal and External Customers

(32)

HOW DO WE IMPROVE?

Presbyterian’s Quality Infrastructure for Sustained Improvements

HOW DO WE IMPROVE?

(33)

What is Quality What is Quality

At Presbyterian At Presbyterian

What is Quality What is Quality

Quality Means Quality Means

Having Excellent

Services Free of Deficiencies

What customers and What customers and

t k h ld t

t k h ld t How they expect it How they expect it d li d

d li d stakeholders want

stakeholders want delivereddelivered

(34)

The Value of Quality The Value of Quality

Quality of a System Impacts the Bottom Line

The Value of Quality The Value of Quality

Excellent

Services Free from

Deficiencies

Customers Expect

Services Expect Deficiencies

Market Leader

Fair Price

Faster Cycle Times

Lower Costs

Less Rework

Lower Total Cost Higher

V l

Improved

Total Cost

Volume Margins

(35)

Quality at Presbyterian Quality at Presbyterian

y Our quality initiatives allow us to deliver:

Quality at Presbyterian Quality at Presbyterian

q y

◦ Improved patient safety

◦ Improved patient satisfactionp p

◦ Improved patient access

◦ Improved outcomesp

◦ Improved financial returns

◦ Decreased length of stayDecreased length of stay

◦ Lowered supply costs

(36)

Process Excellence Process Excellence Process Excellence Process Excellence

Through different types of projects Process Excellence helps drive quality

i t t P b t i

Different

improvements at Presbyterian

Tools for Different

Goals

Lean Six Sigma (DMAIC)

Design for Six Sigma

Successful projects require

(DMAIC) g

(DMADV)

Successful projects require involved leaders and engaged

front-line staff

(37)

Project Identification

^&^&

Prioritization Prioritization Project Identification

Project Identification

^&^&

Prioritization Prioritization

(38)

Financial Acceleration Committee Financial Acceleration Committee FACT Process

FACT Process

(39)

FACT Responsibilities FACT Responsibilities FACT Responsibilities FACT Responsibilities

Finance

Finance Process Process ExcellenceExcellence Business Business UnitUnit

• Verify logic data • Coach and guide S b i

• Verify logic, data, assumptions are valid

• Identify specific

• Coach and guide Business Unit on which systems they need to use to pull

• Submit requests for data from systems

• Calculate Identify specific

resource for specific follow-up tasks

• Provide training /

need to use to pull data

• Assist Business Unit on defining

• Calculate business case

• Present logic and calculations to g

education

• Update PE / BU on PHS financial

g Project Y

• Guide BU through decision tree

calculations to FACT

practices

• Standardize forms and business case

lid ti

• Review calculations, provide suggestions validation

(40)

PEP Oversight

(41)

Physician Engagement

(42)

Physician CMEs

(43)

Post

Post--Deployment Deployment Post

Post Deployment Deployment

Three meetings after close of PEP:

• Business Acceptance Audit

• Business Acceptance Meeting

• 2nd Business Audit

G l f P t D l t ti it Goal of Post-Deployment activity:

• Ensure process changes are being sustained

• Verify measures are still meeting expectations

• Confirm continued management attention and executive oversightg

(44)

Post

Post--Deployment Deployment Post

Post Deployment Deployment

(45)

Project Oversight

(46)

Engage Leadership and Teams Engage Leadership and Teams Engage Leadership and Teams Engage Leadership and Teams

y Champion Perspective

S L d h f ll d

◦ Senior Leaders that fully support projects and teams

◦ continue to drive for perfection and out of the p box thinking

y Process Owners

◦ Empowered to take on initiative and make

◦ Empowered to take on initiative and make decisions based on sound evidence

◦ Has full stake in the process and results y Front Line Staff

◦ Developing front line staff for continual improvements

improvements

(47)

DOOR TO BALLOON DOOR TO BALLOON

Case Study

DOOR TO BALLOON DOOR TO BALLOON CYCLE TIME

CYCLE TIME

(48)

Restoring Blood Flow in a Coronary Restoring Blood Flow in a Coronary A

A

Artery Artery

100% Blockage in a g Blood Flow is Restored with Coronary Artery a Balloon and Stent

(49)

Improve State Performance Evaluation Improve State Performance Evaluationpp

(50)

An Individual Case Control Chart (I Chart) An Individual Case Control Chart (I Chart)

Pre-Improve Phase Improve Phase

I Chart of Door-to-Balloon Times (through 9-30-08)

Blue Line =

350

em 300

Pre Improve Phase Improve Phase

1

90 minute Upper Spec Limit

250 200 -Balloon Tim 150

1 1

After the Improve Phase

100 50 0

Door-to

_X=62.8 UCL=117.1

LCL=8.6

90

6 2 2

2

Median Time went from

63.0 to 62.8 min

08/28/08 07/09/08

04/25/08 03/04/08

12/29/07 10/18/07

07/07/07 05/28/07

02/27/07 01/01/07

0

Percent within 90 minutes went from 94 6% to from 94.6% to 86.5%

(51)

PHYSICIAN BILLING PHYSICIAN BILLING

Case Study

PHYSICIAN BILLING

(52)

Goal Statement Goal Statement Goal Statement Goal Statement

y Y1: Decrease the Billing WIP AR by 50% g y from average of $2,983,350 to $625,000 by 12/31/2009y

y Y2: Increase clean claim rate for both

y Y2: Increase clean claim rate for both Primary and Secondary Billing by 10%

from 86 75% to 95% by 12/31/2009 from 86.75% to 95% by 12/31/2009

Data as of 7/17/2009

(53)

VSM Current State VSM Current State

Billing Value Stream (Before) Mainframe Manual Processes (Blue)

• Eliminated Claims in Mainframe System – Migrate

VSM Current State VSM Current State

to MedAssets

• Eliminated Manual Rework Cycles

Automated Process (Green)

• Reduced Manual Manual

P Processing

Process (Orange)

• Improved Automated Processes

(54)

VSM Future State VSM Future State

Billing Value Stream (New State)

VSM Future State

Automated Process (Green)

• Improved Automation for more payers

• Improved internal process for non- electronic payers electronic payers

Manual Process (Orange)

• Further work with MedAssets to reduce manual processes I P d ti it d

• Improve Productivity and Accuracy

• Reduce variation through continued standardization

(55)

Results: Billing WIP Results: Billing WIP Results: Billing WIP Results: Billing WIP

AR EPIC Billing Work In Progress (WIP)

Total Unbilled EPIC Billing AR

$6,000,000

$5 000 000

Baseline

Measure

Analyze

Improve Control

1 1 1

1

Total Unbilled EPIC Billing AR

Step wise drop in AR

Good

$5,000,000

$4,000,000

$3,000,000

Dollars

drop in AR Billing WIP

$3,000,000

$2,000,000

$1,000,000

Total

_X $739 826 UCL=$1,054,290 1

1

11/13/2009 9/11/2009

7/10/2009 5/8/2009

3/6/2009 1/2/2009

10/31/2008 8/29/2008

6/27/2008 4/25/2008

$0

X=$739,826 LCL=$425,362 1

Sustained Control

Phase January 1,

2009 at

$5.8M

9 11 10 7

8 6

4

Last updated on 1/12/2010 Date

Phase

(56)

Results Claims Aging Results Claims Aging Results Claims Aging Results Claims Aging

Claims Aging by Dates of Service

110 100

Measure Analyze Improve Control Measure Analyze Improve Control

Physician (EPIC) Billing Process

Before:

Average 100

90 80

of Days 70

Average 95 Days

70 60 50 40

Number

_X=58.43 UCL=65.17 LCL=51.69

1/7/2010 12/16/2009

11/24/2009 11/2/2009

10/9/2009 9/16/2009

8/24/2009 7/31/2009

7/9/2009 6/17/2009

5/25/2009

40

30 After:

Average 58 Days

Good

1 1

Date

Last updated 1/12/2010

(57)

$uperior Outcome$

Project Start

January 1, 2009

Project Completion

December 31, 2009

Project Sustainment

May 31, 2010 Goal

Unbilled AR WIP $5.8M $566K $285K ^$600K

Total Days Billing WIP

(Number of Days Revenue on Hold for Billing WIP)

5.9 Days 0.6 Days 0.4 Days ^{0 Days}

% Clean Claims

(Claims with no edits) 87.6% 89.0% 93.0% ^90%

% ECT Claims

(Claims with an edit, fixed ll d b itt d ECT)

81.7% 97.9% 98.24% ^95%

manually and submitted ECT)

Total Claim Inventory

(Primary/Secondary/Tertiary)

21,586 Claims 3,012 claims 1500 Claims ⁰^Claims

(58)

What Have we Learned?

y Mythology with Tools and Deliverablesy gy

y Senior Management Support and Drive for Improvemento p ove e t

y Systematic processes across organization for oversight

for oversight

y Willing staff to make things happen F ll th h ith i h

y Follow through with managing change

y Celebrate successes

(59)

Learn More About Lean Six Sigma Learn More About Lean Six Sigma Learn More About Lean Six Sigma Learn More About Lean Six Sigma

y Books

◦ The Six Sigma handbook: a complete guide for green belts

◦ The Six Sigma handbook: a complete guide for green belts, black belts, and managers at all levels by Thomas Pyzdek, Paul A. Keller

◦ The Toyota way: 14 management principles from the The Toyota way: 14 management principles from the world's greatest manufacturer by Jeffrey K. Liker

◦ What is Lean Six Sigma? by Michael L. George, Dave Rowlands, Bill Kastle

y Websites

◦ www.isixsigma.comwww.isixsigma.com

y Stanley Lei’s Email

◦ slei@phs org

◦ [email protected]