Improving Healthcare at. Lean Six Sigma

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1 Lean Six Sigma in Healthcare Improving Healthcare at Presbyterian Healthcare Services Using Lean Six Sigma

2 Learning Objectives Why we need to improve our processes What is Lean Six Sigma Why do we need to have Lean Six Sigma Presbyterian Process for Improvement Case Studies

3 What you will gain Introduction to Lean Six Sigma What it takes to implement successful Lean Six Sigma How to sustain the gains from the improvement

4 THE BURNING PLATFORM

5 Costs and Spending Health Care Cost in the United States $2.3 Trillion $253 Billion $714 Billion Health Care Spending KaiserEDU.org : Health Policy Explained US Health Care Cost

6 What s driving Healthcare Reform? Technology & Prescription Drugs Chronic Disease Aging of the Population Administrative Cost

7 What are the Major Proposals to Contain Cost? Investment in information technology Improving Quality and Efficiency Adjusting Provider Compensation Government Regulation Prevention Increasing Consumer Involvement in purchasing Altering the Tax Preference for Employersponsored insurance

8 What do we all see as Customers of Healthcare? Clinical Issues Long waits in ED Wrong Surgeries Prescribing wrong medicine and dosage 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 Healthcare Inefficient processes Lack of communication Processes developed over time Band-Aid approach to fixing problems Complex processes built around silos

10 WHAT IS LEAN SIX SIGMA

11 DMAIC Methodology Define Control Improvement Measure Improve Analyze Used to reduce defects or improve a current process

12 LEAN Methodology Define Value Control Process Improvement Measure Value Improve Process-Flow Analyze Process-Flow Used to reduce waste or shorten cycle times

13 DMADV Methodology Goal: Developing a process that provides the Customer the products and services that best meets their expectations. h b h i Verify Define Design Measure Design Analyze Used to create a new process

14 Lean Six Sigma Methodology LEAN DMAIC Define Control Process Improve Process- Flow Define Vl Value Lean Improvement Analyze Process- Flow Measure Value DMADV Define Control Improvement Measure Verify Design Measure Improve Analyze Design Analyze

15 Define: Scoping the Project Finding the Scope Charter SIPOC Process Mapping Capturing the Voice of the Customer (VOC) External view of our process and issues Talk to our customers to understand their pain points

16 Define: Right Players on the Project Oversight Boards and Committees Leadership Champions Ownership Process Owners Work Team Members Facilitators Black Belts

17 Define: Capturing the Voice of the Customer Who is the Customer? What drives the Customers to have difficulties with our products/processes? Where are the pain points in the process? How inefficiencies causes customer complaints? lit? Translation of Key Issues to Critical to Quality Understanding of what we should be measuring

18 Measure: Understanding Baseline Data Using Data to make Decisions 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: Understanding the Basic Formula Y = f(x) Process Input x 4 Step 1 In-Proce ess x 1 In-Proce ess x 2 In-Proce ess x 3 Input x 5 Step 2 Step 3 Step 4 Output Y Input x 6 Input x 7 Input x 8 Input x 9 Y = f(x 1 ) + f(x 2 ) + f(x 3 ) + + f(x n )

20 Measure: Using Root Cause Analysis Tools Use basic tools that have been around since for over 100 years Process Mapping pp g Cause and Effect Diagram Pareto Analysis y FMEA

21 Other Tools in the Toolbox Lean Toolbox Ohno Circle 8 Waste Reduction 6S Group Huddle Value Stream Map (VSM) Product Process Flow (PPF) Full Work Analysis (FWA) Group Technology Mistake Proofing Changeover Capacity and Labor Review Line Balancing Standard Work Kanban & Point of Use Video Analysis Visual Controls Six Sigma Toolbox Charter SIPOC Process Map Pareto Analysis Cause and Effect (Ishikawa hk Diagram) FMEA Histogram Barrier Analysis Brainstorm/Affinitize Measurement System Analysis (MSA) Box Plots Basic Statistical Graphs Process Capability Hypothesis Testing Design of Experiments (DOE) Pugh Selection Matrix + Others Quality Function Deployment

22 Analyze: What Xs will make a difference to the Y Understand the affects of each root cause (X) on the output (Y) Use basic data analysis tools Use statistics to test hypothesis Drive decision making using analysis tools Eliminate the Xs that don t make a difference

23 Analyze: Understanding the Cause for Poor Performance f(x2) f(x4) f(x6) f(x8) f(x3) Y = f(x1) f(x7) f(x5 ) f( (x9) Y = f(x 1 ) + f(x 5 ) + f(x 7 ) + f(x 9 )

24 Analyze: Identifying the Critical Xs Understand the current problems Define What s the problem? What s the customer telling us? What s Critical for Quality? Identify Potential (Xs) in all areas that may affect the Outcome (Y) Measure Where s the breakdown? Why s the process failing? How well are we doing? Validated Xs that attribute for the majority of the problems. What are the few areas that drive the poor performance. Analyze Which Xs presents the biggest issues? Which Xs really causing a problem?

25 Improve: Develop Solutions to Eliminate Failures for Xs Innovate through out of the box thinking Shift your paradigm Status quo changes must be stopped Work with stakeholders to help develop ideas for improvement

26 Improve: Working with Teams Help spread process understanding Improve understanding of each other s work Promote team approach to problem solving Break down silos across the system Use the team s collective understanding di

27 Change Management Help with change Provide the need for change Constant communication from Sr. Leadership and through Project Team Provide upfront changes to help eliminate problems Work with key staff in each area to promote test of change

28 Improve: Developing Solutions Use the Front Line Staff to identify solutions Conduct pilot testing to test effectiveness ect ess of change Develop improvements throughout testing process Implement multiple solutions to fix single problem

29 Control: Sustaining the Gains Monitor and Show Performance Elicit improvements from all staff members Develop control plans to help determine actions Setup the front line staff to self monitor

30 Change Management Communicate throughout the system from start to finish Change the culture through changing how we manage System thinking identify process that best suits the organization Work as a team to eliminate system problems Break down barriers Resource and support

31 Why the Methodology Works Organization Level Systematic and structured approach to problem solving and improvement Oversight at various levelsl Senior management supported Operational Level Meeting deliverables for tollgates Operation owned improvements Official handoff and transition improvements into Operations 1 Internal and External Customers

32 Presbyterian s Quality Infrastructure for Sustained Improvements HOW DO WE IMPROVE?

33 What is Quality At Presbyterian Quality Means Having Excellent Services Free of Deficiencies What customers and stakeholders tkh want How they expect it delivered dli d

34 The Value of Quality Quality of a System Impacts the Bottom Line Excellent Services Customers Expect Free from Deficiencies Market Leader Fair Price Faster Cycle Times Lower Costs Less Rework Higher Vl Volume Improved Margins Lower Total Cost

35 Quality at Presbyterian Our quality initiatives allow us to deliver: Improved patient safety Improved patient satisfaction Improved patient access Improved outcomes Improved financial returns Decreased length of stay Lowered supply costs

36 Process Excellence Through different types of projects Process Excellence helps drive quality improvements at Presbyterian Different Tools for Different Goals Lean Six Sigma (DMAIC) Design for Six Sigma (DMADV) Successful projects require involved leaders and engaged front-line staff

37 Project Identification Prioritization &

38 Financial Acceleration Committee FACT Process

39 FACT Responsibilities Finance Process Excellence Business Unit Verify logic, data, Coach and guide Submit requests assumptions are Business Unit on for data from valid which systems they systems Identify specific need to use to pull Calculate resource for specific data business case follow-up tasks Assist Business Present logic and Provide training / Unit on defining calculations to education Project Y FACT Update PE / BU on Guide BU through PHS financial decision tree practices Standardize forms and business case validation Review calculations, provide suggestions

40 PEP Oversight

41 Physician Engagement

42 Physician CMEs

43 Post-Deployment Three meetings after close of PEP: Business Acceptance Audit Business Acceptance Meeting 2nd Business Audit Goal of Post-Deployment t activity: it Ensure process changes are being sustained Verify measures are still meeting expectations Confirm continued management attention and executive oversight

44 Post-Deployment

45 Project Oversight

46 Engage Leadership and Teams Champion Perspective Senior Leaders that fully support projects and teams continue to drive for perfection and out of the box thinking Process Owners Empowered to take on initiative and make decisions based on sound evidence Has full stake in the process and results Front Line Staff Developing front line staff for continual improvements

47 Case Study DOOR TO BALLOON CYCLE TIME

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

49 Improve State Performance Evaluation

50 An Individual Case Control Chart (I Chart) 350 I Chart of Door-to-Balloon Times (through ) Pre-Improve Phase Improve Phase 1 Blue Line = 90 minute Upper Spec Limit -Balloon Tim me Door-to UCL=117.1 _ X=62.8 LCL= After the Improve Phase Median Time went from 63.0 to 62.8 min 01/01/07 02/27/07 05/28/07 07/07/07 10/18/07 12/29/07 03/04/08 04/25/08 07/09/08 08/28/08 Percent within 90 minutes went from 94.6% to 86.5%

51 Case Study PHYSICIAN BILLING

52 Goal Statement Y1: Decrease the Billing WIP AR by 50% from average of $2,983,350 to $625,000 by 12/31/2009 Y2: Increase clean claim rate for both Primary and Secondary Billing by 10% from 86.75% to 95% by 12/31/2009 Data as of 7/17/2009

53 Billing Value Stream (Before) Mainframe Manual Processes (Blue) Eliminated Claims in Mainframe System Migrate VSM Current State to MedAssets Eliminated Manual Rework Cycles Manual Process (Orange) Improved Automated Processes Automated Process (Green) Reduced Manual Processing

54 Billing Value Stream (New State) VSM Future State Automated Process (Green) Improved Automation for more payers Improved internal process for non- electronic payers Manual Process (Orange) Further work with MedAssets to reduce manual processes Improve Productivity it and Accuracy Reduce variation through continued standardization

55 Results: Billing WIP Good $6,000,000 $5,000,000 AR EPIC Billing Work In Progress (WIP) Baseline 1 1 Total Unbilled EPIC Billing AR 1 1 Measure Analyze Improve Control Step wise drop in AR Billing WIP Dollars $4,000,000 $3,000,000 Total $2,000,000 1 January 1, 2009 at $5.8M $1,000,000 $0 4/25/2008 6/27/ /29/ /31/2008 1/2/2009 3/6/2009 5/8/2009 7/10/ /11/ /13/2009 _ UC L=$1,054,290 X=$739,826 LCL=$425,362 Sustained Control Phase Last updated on 1/12/2010 Date

56 Results Claims Aging Claims Aging by Dates of Service Physician (EPIC) Billing Process of Days Number Measure Analyze Improve Control Before: Average 95 Days _ UCL=65.17 X=58.43 LCL=51.69 Good /25/2009 6/17/2009 7/9/2009 7/31/2009 8/24/2009 9/16/ /9/ /2/ /24/ /16/2009 1/7/2010 After: Average 58 Days 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 manually and submitted ECT) Total Claim Inventory (Primary/Secondary/Tertiary) 81.7% 97.9% 98.24% 95% 21,586 Claims 3,012 claims 1500 Claims 0 Claims

58 What Have we Learned? Mythology with Tools and Deliverables Senior Management Support and Drive for Improvement pove et Systematic processes across organization for oversight Willing staff to make things happen Follow through h with managing change Celebrate successes

59 Learn More About Lean Six Sigma Books 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 world's greatest manufacturer by Jeffrey K. Liker What is Lean Six Sigma? by Michael L. George, Dave Rowlands, Bill Kastle Websites Stanley Lei s

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