Miami Children s Hospital: a decade s worth of growth in just three years

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1 GE Healthcare CASE STUDY Performance Solutions: Strategy and Leadership Miami Children s Hospital: a decade s worth of growth in just three years THE ORGANIZATION Miami Children s Hospital (MCH) is South Florida s only licensed freestanding specialty hospital exclusively for children. Founded in 1950, the 289-bed hospital treats about 137,000 patients annually in more than 40 pediatric specialties and subspecialties. RESULTS Almost three years 990 days without a never-event Operating margin has grown significantly, rising from 2.6% in 2006 to 4.6% in 2010 Patient volumes have grown by 10 percentage points or more across the board Reached gold standard patient, employee, and medication staff satisfaction ratings How operational rigor and leadership development can drive quick, substantial improvements to quality of care, financial performance, and customer satisfaction In 2008, the MCH board appointed Dr. M. Narendra Kini as President and Chief Executive Officer with the mandate to build on the hospital s reputation for clinical excellence and pediatric care leadership. I was given the challenge to transform Miami Children s from a very good community hospital to a Top Ten pediatric institution, says Dr. Kini, who had previously served as Executive Vice President of Clinical Operations Improvement at Trinity Health, one of the largest healthcare systems in the United States. At that time, the hospital s market share was starting to decline due to increasing competition and a cultural mind-set focused more on maintaining the status quo than on moving forward, says Senior Vice President, Chief Information Officer Ed Martinez. Our management processes had become stale. From operations to budgets to productivity, everyone was just doing what they knew, he says. To achieve the needed transformation, Dr. Kini envisioned and implemented a three-prong approach: cultural change, process improvement, and a stronger operational structure. And today, constituent engagement is continuing to make each of these approaches successful and sustainable. From physicians to board members to management, every key stakeholder knows well his or her role in guiding or engaging in these efforts.

2 GETTING STARTED The first step was to define the hospital s desired culture and create a foundation for change that would unite the 650 affiliated physicians and 3,000-plus employees who worked there. The result was The MCH Way a set of cultural values and guiding principles that identified the hospital s priorities (advanced care, world-class service, patient-centered care, digitized environment) and the behaviors needed to achieve them (collaboration, accountability, passion, integrity, respect). TURNING VALUES INTO ACTIONABLE STRATEGIES We quickly realized that to execute The MCH Way, we needed a formal operating mechanism that would ensure that these priorities and behaviors were embedded in the organization and pursued with rigor and accountability, says Dr. Kini. To that end, he asked the GE Healthcare Performance Solutions team to help MCH implement a variation of the GE operating cycle, an organizational infrastructure that systematizes strategic planning, budgeting, operating mechanisms, performance management, and human resources planning. Prior to the operating cycle, goals were not well-defined. Each department essentially wrote its own. Now our goals are more strategic and tied to the organizational alignment, says Nikole Sanchez-Rubiera, BSN, MSN, MBA, Vice President of Transformation. Now, a set of well-aligned expectations are developed in the beginning of the fiscal year, coached and realigned through the year, and evaluated at year-end to create accountability. These operational and strategic goals are half of the overall evaluation, with the other half being The MCH Way, the values; reinforcing the message of how employees interact between themselves and the patient is as important as what they are focused on getting done. Outcomes are measured against these two factors and are commensurate with how rewards and recognition are assigned. Our system demands accountability from employees but rewards them for performance, says Dr. Kini. The hospital now has one-year and three-year strategic plans, each tied to a distinct set of operational dials that reflect the key performance measures for the hospital: growth, financial performance, customer service, and quality and safety of care. Aligned to those dials are distinct high-level strategic initiatives designed to transform the organization, known in MCH parlance as Blue Chips. The Blue Chips are driven by executables, or discrete performance improvement activities that will move the organization closer to each Blue Chip goal. Each executable has key metrics and connects with supporting programs intended to improve the metric. See the figure on the following page for an example of how MCH is applying this process to drive quantifiable quality and safety improvements. The graphic illustrates the strategic programs and tactics aimed at standardizing care on evidence-based practices just one track of performance improvement activities taking place concurrently at MCH from 2010 to 2012.

3 OPERATIONAL Quality and Safety To establish and maintain world-class pediatric standards of care by ensuring an error-free care environment BLUE CHIPS Evidence-based standardized practices Blue Chip #2 Blue Chip #3 Reduce Hospital Acquired Infections (HAIs) Executable 2-A Executable 3-A Appropriate Hand Hygiene Executable 2-B Executable 3-B PROGRAM Develop standardized care protocols for top 15+ diagnoses Eliminate preventable events Executable 2-C Executable 3-C Prevent medication errors METRIC Clinical Excellence Index

4 Other hallmarks of the MCH operating cycle include: Quarterly and annual strategic operating reviews Capital budgeting process built into the operating cycle Physician-led service line reviews, backed by the administrative director, in which future clinical environments and technology needs are forecast In the past we always had a plan, but did the everyday employee know what the plan was? says Jackie Gonzalez, ARNP, MSN, CNAA, BC, Senior Vice President, Chief Nursing Officer and Patient Safety Officer at the hospital. The operating cycle has allowed employees to come together around the plan, understand it and drive toward it. We have our pillars, we have our dials that we shoot for, we have our Blue Chips and programs. Everybody understands the model and that, more than anything, has helped the organization move forward. The operating cycle helped us determine priorities and establish milestones for every quarter to make sure we met those objectives, says Nikole Sanchez-Rubiera. Before, the hospital was like a mom-and-pop shop. Today, it s run like a corporation. MOVING THE METRICS When the magnitude of the improvements made by Miami Children s in the areas of quality, financial performance, customer satisfaction, and growth are considered in total, we have compressed what should have been a ten-year journey into three or four years, says Dr. Kini. Quality improvement: Our greatest improvement has been in quality, says Dr. Kini. The hospital developed a weighted index comprising 23 clinical measures of quality that are constantly being monitored and measured, such as BSI, SSI, and medication errors. By heavily weighting never-events like wrong-site surgeries and medication errors, we are trying to reduce variations in care that compromise patient safety, he says. The hospital has gone almost three years 990 days without a never-event. This accomplishment is due, says Dr. Kini, to Lean-ing out key processes and implementing checklisting practices to catch potential errors in the emergency department (ED), operating rooms (ORs), and intensive care units (ICUs). We quickly realized that to execute The MCH Way, we needed a formal operating mechanism that would ensure that these priorities and behaviors were embedded in the organization and pursued with rigor and accountability. M. Narendra Kini President and Chief Executive Officer Miami Children s Hospital

5 Financial improvement: According to Senior Vice President, Chief Financial Officer Pedro Alfaro, Miami Children s operating margin has grown significantly, rising from 2.6% in 2006 to 4.6% in i In comparison, a recent Standard & Poor s survey found that stand-alone, not-for-profit hospitals and health systems reported a 2.4% median operating margin in As MCH enters the fourth quarter of 2011, the operating margin is around 5.1% a particularly significant accomplishment, says Dr. Kini, for a hospital whose volume comprises over 65% Medicaid patients. Our goal is to achieve an A+ rating from the credit rating agencies, says Alfaro. Using tools like Lean, we are continually driving our quality index and creating value for our customers and our payers from a quality perspective. I am a firm believer that if we improve our quality and our service, our margin and market share will show it. Customer satisfaction improvement: We have made quantum leaps in customer satisfaction, says Dr. Kini. Hospitality is a new concept in healthcare, and replacing the word patient with customer has been a challenge. But now all employees are told on day one that they are here to serve customers. The hospital s goal is to have at least 95% of patients respond optimally when asked if they would recommend the hospital a rating considered the industry gold standard for healthcare satisfaction. At present, satisfaction ratings in the ED, inpatient and outpatient services, and ambulatory surgery are at or within one or two percentage points of that goal. In addition, internal customers are expressing satisfaction with the hospital s transformation, with 95% (medical staff) and 94% (employees) responding affirmatively to Would you recommend? Growth improvement: From patient volume to the depth and reach of its educational programs, MCH s footprint has expanded dramatically. Patient volumes have grown by 10 percentage points or more across the board inpatient, outpatient, ED, surgery, and other areas, says Dr. Kini. MCH now offers the largest pediatric education program in Florida and is on track to be the largest pediatric teaching facility in the southeastern U.S. by CREATING A DEEP BENCH OF TALENT Another factor in Miami Children s success was aligning the organization s four drivers of success quality, financial performance, service/market share, and customer satisfaction to management and employee performance, says Michael Kushner, Senior Vice President and Chief Talent Officer. We decided recently to make people our fifth pillar, he says. The organization is now seeing the value that human resources and talent management can bring to the table. We decided recently to make people our fifth pillar, he says. The organization is now seeing the value that human resources and talent management can bring to the table. From a human resources perspective, MCH instituted a formalized structure for: Evaluations and calibration Peer groups come together on a regular basis to discuss the performance, progress, and development needs of employees on their teams. The calibration sessions brought healthy discussion and openness to management, says Michael Kushner. Michael Kushner Senior Vice President and Chief Talent Officer Miami Children s Hospital

6 Leadership and talent review Utilizing output from evaluations, this process strategically aligns and develops talent to maximize performance development while achieving results and critical outcomes for the organization. One of the goals of the talent management system is to create depth in the organization. We call it the 3D equation: Differentiation + Development = Depth. In the event of turnover in key positions for any department, we are that much closer to seamlessly transitioning to someone else, says Michael Kushner. The talent review tools enable a different kind of conversation, says Jackie Gonzalez. You get feedback from other people who interact with your staff, maybe in a different way. It opens up the dialogue across the organization and you can see where an employee s skill set will best fit. The talent development process at MCH now includes for each member of the management team mentoring, coaching, stretch assignments, moving employees to different units, and other educational measures, according to Magaly Barroso, Director, Talent Effectiveness and Engagement. GE opened up new pathways for us. We now have the talent management systems in place that enable us to make that critical connection between employee development and organizational performance, and tie them both into outcomes. Once the foundation is established, the conversation quickly becomes about identifying the right players for immediate and future challenges while addressing those who cannot make the change or otherwise resist. Change is a journey and it hasn t always been easy, says Dr. Kini. Residual resistance to our new way of operating still exists and has to be managed. In some cases, the difficult decision of replacing individuals who cannot adapt has to be made. The key is identifying the right players who can lead and sustain change, and putting them in the right roles. SAVING MONEY BY REDUCING VARIANCE The rigor and rhythm of the operating cycle was complemented by process improvement efforts. We chose to implement Lean rather than other process improvement variance analysis tools because it is easy to understand and capable of achieving results in short order, says Dr. Kini. The hospital developed its own variation of Lean, called Lean-Next*, which focuses on cascading Lean methodology and practices to all areas of the hospital, developing departmentspecific value stream maps, and engaging front-end staff in the process. Another differentiator to this approach included physician ownership and engagement in both Lean and the operating cycle. Engaging physicians was one of the biggest challenges in the process, says Dr. Kini. When he came onboard, two-thirds of the medical staff were private physicians; today, more than half are employed by the hospital. Physicians are engaged at all levels of planning, from the senior leadership team to strategic planning to operating reviews, he says.

7 Over the last two years, the strategic implementation of Lean at MCH has produced significant savings by reducing operational costs and avoiding unnecessary capital investments. THE FREEDOM TO STRATEGIZE All the pieces are coming together, says Ed Martinez. The GE operating cycle allows us to take strategic risks because we are planning ahead. We can try things, review the results at the quarter, and then readjust our operations to adapt to what s happening. Martinez points to initiatives like implementing an EMR, planning to build a new bed tower, opening clinics in new markets, and using videoconferencing to extend MCH subspecialists service to foreign countries as the kind of strategic risks that the hospital would have hesitated to take before but that are now paying off. In the monthly management meetings, we look at all the metrics and determine as a team how we are going to move them forward. It s created focus on results that we didn t have before, says Michael Kushner. It s the best operating model I ve seen, and the GE team really made it come to life at Miami Children s, says Nancy Humbert, Senior Vice President, Strategic Business Planning, Public Affairs and Hospitality Officer. We ve had a lot of well-meaning consultants who were talented and collaborative, but the GE consultants really know their stuff and were able to transfer that knowledge to us. It s the best operating model I ve seen, and the GE team really made it come to life at Miami Children s. We ve had a lot of well-meaning consultants who were talented and collaborative, but the GE consultants really know their stuff and were able to transfer that knowledge to us. Nancy Humbert Senior Vice President, Strategic Business Planning, Public Affairs and Hospitality Officer Miami Children s Hospital For Dr. Kini, the value is in the disciplined approach to business activities. The operating cycle and our approach to Lean has enabled us to become organized, says Dr. Kini. Instead of managing broken processes, I am freed up as an executive to actually think about the future. I have time to strategize rather than having to worry about execution.

8 About GE Healthcare GE Healthcare provides transformational medical technologies and services that are shaping a new age of patient care. Our broad expertise in medical imaging and information technologies, medical diagnostics, patient monitoring systems, drug discovery, biopharmaceutical manufacturing technologies, performance improvement and performance solutions services helps our customers to deliver better care to more people around the world at a lower cost. In addition, we partner with healthcare leaders, striving to leverage the global policy change necessary to implement a successful shift to sustainable healthcare systems. Our healthymagination vision for the future invites the world to join us on our journey as we continuously develop innovations focused on reducing costs, increasing access and improving quality around the world. Headquartered in the United Kingdom, GE Healthcare is a unit of General Electric Company (NYSE: GE). Worldwide, GE Healthcare employees are committed to serving healthcare professionals and their patients in more than 100 countries. For more information about GE Healthcare, visit our website at *Lean-Next is a trademark of Miami Children s Hospital 2012 General Electric Company All rights reserved. GE and GE Monogram are trademarks of General Electric Company. General Electric Company, doing business as GE Healthcare PS-US-BR