Advances in Laboratory Medicine How do we guarantee the quality Introduction of Six Sigma in Healthcare System: The Latest Approaches for Healthcare Improvement Dr YK Chan Chairman, Six Sigma Institute Managing Director, SBTI-HK Ltd 2009 1 Contents Why Healthcare Needs Further Improvement? Latest Healthcare Improvement Methodologies Six Sigma and Its Results in Healthcare Application What is Lean? What is Difference Between Lean and Six Sigma What is Theory of Constraints (TOC)? - Results of Integrating Lean Six Sigma and TOC Success Factors for Healthcare Improvement 2
Ir. Dr. YK Chan ( 陈 旭 球 ) Doctor of Engineering (Warwick), Doctor of Management (IMC/SCU) CEng, FIET, RPE, FHKIE, FHKQMA, RQP(MBB) Managing Director, SBTI Hong Kong Ltd. Chairman, Six Sigma Institute 1627A Star House Salisbury Road, Tsimshtsui, Kowloon, HONG Tel: (852) 25812209 Email: ykchan@sbtionline.com.cn Over 30 experience in service and management positions in various industries Registered Master Black Belt and Certified Black Belt Trainer Led and completed 47 Six Sigma Projects Trained over 1,000 Six Sigma professionals including Champion, Black Belts, Green Belts and Lean Leaders Consultancy services to organizations in both servicing and manufacturing industries Principle Consultant/tutor of the following hospitals: Princess Margaret Hospital - Sanatorium & Hospitals Queen Elizabeth Hospital - Caritas Medical Centre Yan Chai Hospital - Tune Mun Hospital Tsuen Wan Adventist Hospita - Kwon On Hospital Pamela Youde Nethersole Eastern Hospital - Member of adjudicatory Panel of three Quality Awards and two Six Sigma awards in HK and China Visiting Professor of Beijing Normal University, China Industrial Fellow of University of Warwick, UK Why Healthcare Needs Improvement 4
Issues in Healthcare The Institute of Medicine (IOM) report To Err Is Human: Estimated that preventable medical errors kill as many as 98,000 patients annually, has highlighted the inadequacies in the care delivery process. The report, however, does not attribute these errors to recklessness or incompetence on the part of caregivers, but rather to the complexity of the care delivery process 5 Issues in Healthcare: Error Rates Healthcare error rate is about 6,210 DPMO (3.8 sigma) ( Just the facts in Health Care, H. James Harrington, Quality Digest, March 2006) Healthcare is now the largest industry of our society - built essentially around a craft model still rooted not in the twentieth or even the nineteenth century, but in the eighteenth Healthcare's Need for Revolutionary Change, Martin D. Merry, M.D 6
What Healthcare Needs Healthcare is often overburdened by inefficiencies, errors, resource constraints and other issues that all lead to dissatisfied patients and staff members Healthcare will desperately need something that can simultaneously improve quality, morale, capacity, waiting time and patient satisfaction. Can any methodology help? 7 What Healthcare Needs The objective of this presentation is to introduce few well-proven approaches to meet these needs. They include: Six Sigma (SS) Lean organization (L) Lean Sigma (LS) Theory of Constraint (TOC) Integration of SS, Lean and TOC (SBTI way) 8
Six Sigma - The World s New Current? Allied Signal 1987 1988~1995 1997 2000 9 Healthcare: Late Adopter of Six Sigma % of Organizations Using Improvement Techniques Manufacturing Healthcare Benchmarking 65.6 % 72.7% TQM 70.3 79.2 Continuous Quality Improvement Team 38.1 29.6 ISO 9000 70.9 6.3 Lean Sigma 33.0 8.4 Baldridge 9.4 7.2 ASQ and Market Probe January 2004 10
What s the Trend of Adopting the Proven Approach? % of organizations that are Very Likely or Highly Likely to Adopt Six Sigma in next 12 months Manufacturing Healthcare 52.0% 61.9% ASQ and Market Probe January 2004 For large healthcare organizations, Six Sigma is the 2 nd most likely initiative to be pursued in 2005 Economist Intelligence Unit (EIU) in collaboration with Celerant Consulting, 2005 The typical healthcare Six Sigma project has delivered an average of USD$500,000 in annual saving Creative Healthcare Dec, 2004 11 Champion Hospitals in HK Leading Hospitals: Sanatorium & Hospital Princess Margaret Hospital Tuen Mun Hospital Implementing Hospitals: Queen Elizabeth Hospital Pamela Youde Nethersole Eastern Hospital Caritas Medical Centre Tsuen Wan Adventist Hospita Kwon On Hospital 12
What is Six Sigma? 13 What is Six Sigma? Six Sigma can be defined by four distinct characteristics: A successful business strategy for all industries A comprehensive philosophy about operational excellence A fact based supported by statistical data analysis for decision making A statistical measure for determining process capability (6 Sigma = 3.4 defects per million opportunities) Focus on improving business processes that maximizing business success 14
GOAL EFFECT 90.00 83.67 77.33 71.00 64.67 58.33 52.00 C- C+ C+ A- A+ C- PRODUCTION DAYS TEAM RESULTS Process Improvement Framework DMAIC DEFINE MEASURE ANALYZE IMPROVE CONTROL Charter team, map process & specify CTQs Measure process performance Identify & quantify root causes Select, design & implement solution Implement improvement and ongoing control 1. IDENTIFY OPPORTUNITIES Process Flow Analysis Benchmarking SURVEY Pareto Analysis YES NO A B C D 3. ANALYZE CURRENT PROCESS Process Flow Analysis Analyze Available Check Sheet Data HISTORY CHECK SHEET REPORT 5. IDENTIFY ROOT CAUSES & PROPOSED SOLUTIONS Brainstorming Why-Why Diagram Cause & Effect Diagram 6. PRIORITIZE, PLAN AND TEST PROPOSED SOLUTIONS Design of Experiments PRIOR OPERATION A B C D Level Loading Pull System 1 2 3 30 NEXT OPERATION 8. MEASURE PROGRESS & HOLD GAINS Trend Chart SPC Nominal Group Technique 2. FORM TEAM & SCOPE PROJECT Identify Customers and Requirements Establish Process Boundaries 4. DEFINE DESIRED OUTCOMES FOR IMPROVED PROCESS Define Performance Measures Agree on Goals Process Redesign 7. REFINE AND IMPLEMENT SOLUTIONS Brainstorming Force Field Analysis 9. ACKNOWLEDGE TEAM AND COMMUNICATE RESULTS REPORT Tree Diagram GANTT Chart Training & Procedures CTQ = Critical To Quality 15 Sigma Levels Performance Level SIGMA % Yield DPMO World-class 6 99.99966 3.4 Excellent 5 99.9767 233 Good 4 99.3790 6,210 Fair C 3 93.3 93.3 66,807 Cost of Quality % <1% of revenue 5-15% of revenue 15-25% of revenue 25-40% of revenue Non-competitive 2 69 308,537 Poor 1 31 691,462 Source: Introduction to Six Sigma by Mikel J Harry 16
Alarming Defect Rates Source: Patrice L. Spath,, The Missing Partner in Patient Safety, Quality Management Conference March 5, 2004 17 Why Six Sigma in Healthcare? Because 4 Sigma is not good enough! 18
Sample Six Sigma Projects & Results HCFA Revenue Maximization; USD$2,203,000 CT Throughput; USD$1,702,000 Increase Authorized Collections in Cath Lab; USD$559,000 Surgery Utilization; USD$544,000 Documentation of Complicating Conditions for Spinal Fusion; USD$407,000 Transcription Reverse Re-engineering; USD$408,000 Long Stay Observation Denials; USD$346,000 Medical Equipment Defects, Closet Orders; USD$253,000 Mammography Turnaround Time; USD$137,000 Accounts Payable Optimization; USD $117,000 Professional Billing Client Patient Statements; USD$116,000 But save lives is our most important objective 19 What is Lean? 20
What is Lean in Healthcare In healthcare, Lean is about shortening the time between the patient entering and leaving the care facility by eliminating all non-value added, time, motion and steps Fixing healthcare from the Inside, Today Harvard Business Review (Sept 2005) We Spend 75-95% of Our Time Doing Things That Increase Our Costs and Create No Value for the Customer! 21 Lean Improvement 22
Patient Length of Stay 23 Healthcare Lean System Just In Time Operate with the minimum resource required to consistently deliver Just what is needed In just the required amount Just where it is needed Just when it is needed People Supplies Equipment Standard Work Standard Work In Process Visible Operational Availability Produce to takt time One piece flow Pull system production Jidoka One-by-one confirmation to detect abnormalities. Stop and respond to every abnormality. Separate equipment work from human work. Enable equipment to detect abnormalities and stop autonomously Leveled production (Heijunka) Cost reduction through the elimination of muda (waste or non-value added) 24
Results of 175 Rapid Process Improvement Weeks at Virginia Mason Medical Center 25 A Powerful Union 26
Lean & Six Sigma Powerful Improvement Approaches Lean Goal Create flow, increase process speed Focus Use VSM to identify & eliminate waste Method Kaizen events and teambased Lean Projects Lean Reduces Non-Valued Steps Six Sigma Goal Improve process capability on critical customer requirements Focus Use DMAIC w/ statistical tools to eliminate variation and defects Method Management engagement, dedicated Champions and Black Belts Six Sigma Improves Capability of Value-Added Steps 27 What is Theory of Constriants? 28
Constraints Management All systems have a constraint; the constraint is the weakest link in the process. Any improvement in the constraint s performance translates directly into improved overall system performance. Any improvement in a non-constraint resource or process step does not improve system performance. 29 Hillcrest Surgery Case Study Set-up Procedure Clean-up Clean-Up Turnover Pt. InAnesth. Time InductionFirst In Out Cut Close Pt. Out Pt. In Standard Times Established. Working To Streamline the Process. (Work Just Starting in This Area) Average Gain from No Override Avg. 28 Mins. Realized: 50% Improvement (From 42 to 21 Mins) Metric Baseline After Cancellation Rate (No shows) 3.1% 2.4% Cancellation Rate (Day prior) 2.6% 2.4% Room Turnover Time Pt Out To Room Ready 42mins >25mins 21mins ~4mins Scheduling Accuracy (Std Dev) 22.55mins 11.19mins Scheduling Accuracy (Mean Deviation) 24mins 6mins 30 30
Integration of Lean and Six Sigma with TOC Simplify the complex Standardize & sustain gains Align TOC and Six Sigma Lean Identify projects Elevate throughputs Focus on systems Focus on Waste & Responsiveness TOC Focus on Bottle Necks for throughput improvement Six Sigma Focus on Defects & Variability Enabling process capabilities Timely access to quality data Dramatic Improvement 31 Example A global electronics manufacturer with 21 plants, 45,000 employees. Management wants to find a new process improvement methodology which would help them achieve maximum cost savings and quality benefits. They decided: 11 plants applied six sigma 4 plants applied lean 6 plants applied integrated TOC, Lean and Six Sigma. Over the more-than-two-year study, the plants completed 101 projects. 32
Percentage of Contribution to Savings Realized 4% 7% 89% 33 A Case Example: Outpatient Blood Draw Case The laboratory outpatient blood draw department of Community Hospital has three registration offices and three blood draw stations, as shown in the floor plan below:. 34
Exercise: Outpatient Blood Draw Case The process is staffed by a receptionist, two registrars, and one phlebotomist; it is open from 6:30 a.m. to 3:00 p.m. The staff gets two fifteen-minute breaks and takes a half hour lunch. Patients are seen on a first come, first-served basis. Although the department opens at 6:30 am., fasting patients begin to arrive at 6:00 a.m. so they can get in and out quickly. On any given day, the number of patients waiting for the department to open ranges from 0-12, the number of patients waiting for registration ranges from 0-20, and the number of patients waiting for phlebotomy ranges from 0-6. 35 Out patient Blood Draw Case The department processes 100 patients a day, and the process cycle times are as follows: Reception 1 minute, 30 seconds (90 seconds) Registration 4 minutes (240 seconds) Phlebotomy 3 minutes (180 seconds) 36
Out patient Blood Draw Case This department has been targeted for improvement because of the rise in patient complaints related to waiting. Some patients have waited more than an hour to be registered and have their blood drawn. Doctor's offices have been complaining about the poor turnaround time from order to results. The Laboratory director has put in a request for an additional phlebotomist to eliminate the waiting problem. If you are the CHE, do you approve this request? 37 Let s assess the current situation 38
Example of flow, sequencing, and inventory 0-12 0-20 0-6 Reception Registration FIFO FIFO FIFO Takt Time = 270 sec Cycle Time = 90 sec No. of People = 1 Takt Time = 270 sec Cycle Time = 240 sec No. of People = 2 Phlebotomy Takt Time = 270 sec Cycle Time = 180 sec No. of People = 1 Take Time = working hours/ No. of patients = 450 mins/ 100 = 45 mins or 270 secs 39 Load Chart Takt Time = 270 No of Staff = Total Process time / Takt Time = 510/270 = 1.98 staff 40
Questions: Can you justify an additional staff? 41 Another Solution Better Scheduling + Multi-Skilling 42
Load Chart 300 250 200 150 Takt Time = 192 Column2 100 50 0 Reception Registration Blood Draw 70% patients are coming in the morning: Takt = 225/70 x60 = 192 sec 43 Two Possible Solutions 1. Better scheduling 2. Staff arrangement to suit demand No of staff in the morning = 510/198 = 2.57 say 3 staff Takt time in the afternoon = 225/30 x 60 = 450 sec No. of staff in the afternoon = 510/450 = 1.13 staff say 2 staff Can we solve the problem? 44
Variations Counted 45 Case Example: Better Use Data to Enhance MRI Capacity 46
Problem of Variations The mean for an MRI may be 26.5 minutes with standard deviation of 15.6 minutes and range of 2 minutes to 72 minutes, indicating a fairly wide dispersion. With such a high variance, using the mean of 26.5 minutes for scheduling, performance evaluation or process improvement will produce marginal results. 47 Frequency Histogram for Stratification 48
Figure 2: Cumulative Frequency with Strata Map 49 Normal Probability Plot of MRI Use 50
MRI Use Control Chart 51 Success Factors for Deployment of Lean Sigma in Hospital Uncompromising top management support and commitment Formation of Lean Sigma infrastructure and the appropriate training Project selection and the associated financial returns to the bottomline Effective communication at all levels Developing organizational readiness Effective leadership Motivated Staff 52
Make It Happen Deploying Six Sigma needs a big change to the hospital for goods Will equip the hospital with common breakthrough improvement framework and cultivate a fact base data driven decision making culture Will substantially strengthen the competitiveness of the hospital and its ability for rapid growth Need someone to lead why not You! 53 Want to Learn More? 1 st Healthcare Improvement Conference Hong Kong University of Science and Technology Sunday, 21 March 2010 10 hospitals form Hong Kong, USA and China as well as worldclass consultants in healthcare improvement $3,500 (40% off to reserve your seats by giving your name card from normal fee of $3,500 to $2,100) Only for participants of this seminar! 54
Other Related SBTI Programmes Course Duration Course Fee Theory of Constraint Management for Healthcare 2 Days (0900-1700) $3,500 Fundamental Lean Sigma for Managers 1 Day (0900-1700) $1,350 Lean for Healthcare 3 days (0900-1700) $4,750 Healthcare FMEA 2 Days (0900-1700) $3,500 A3 Problem Solving Approach 2 days (0900-1700) $3,500 Lean Sigma Green Belt for Healthcare 6 Days (0900-1700) $9,750 Lean Master 6 Days (0900-1700) $9,500 Lean Sigma Black Belt for Healthcare 18 Days (0900-1700) $45,000 55 Thank you! For more info: Tel: 2581 2209 ykchan@sbti.com.hk 56
Introduction to Service Providers - A Team of World-class Experts We served over 100 hospitals worldwide! 57 SBTI s Offices and Its Services SBTI 是 全 球 领 先 的 管 理 及 六 西 格 玛 咨 询 公 司, 是 六 西 格 玛 管 理 方 法 论 的 鼻 祖 及 全 球 技 术 研 发 服 务 机 构 SBTI 享 誉 全 球, 客 户 遍 布 美 洲 欧 洲 和 亚 太 地 区 客 户 行 业 涉 及 航 空 汽 车 电 子 通 讯 化 工 机 械 食 品 医 疗 健 康 运 输 物 流 等 SBTI 有 超 过 160 个 签 约 客 户 来 自 财 富 500 强 企 业, 其 中 已 有 45 家 客 户 在 SBTI 的 帮 助 下 成 为 行 业 标 杆 企 业 SBTI 在 全 球 主 要 发 达 国 家 中 均 设 有 分 公 司 SBTI 在 亚 太 地 区 的 中 国 和 韩 国 设 有 分 公 司 SBTI-China 在 中 国 上 海 北 京 香 港 特 别 行 政 区 广 州 深 圳 长 沙 和 台 北 共 设 有 7 个 分 支 及 服 务 机 构 58
SBTI Teams and Functions 59 SBTI 咨 询 顾 问 团 队 : 专 业 + 敬 业 权 威 的 业 界 精 英 Stephen Zinkgraf 博 士 和 他 在 Motorola GE Allied Signal 等 公 司 的 同 事 一 起 创 建 SBTI 的 时 候, 就 已 经 把 全 球 顶 尖 的 管 理 方 法 论 专 家 聚 集 在 一 起, 他 们 大 多 有 着 Motorola AlliedSignal GE Kodak Polaroid Dupont 等 500 强 公 司 企 业 部 门 总 经 理 以 上 的 管 理 实 践 SBTI 专 家 尤 其 具 备 商 业 评 估 流 程 诊 断 变 革 管 理 管 理 体 系 财 务 成 效 等 方 面 的 实 施 优 势, 他 们 中 大 部 分 人 还 是 六 西 格 玛 LEAN 和 KAIZEN 的 权 威 丰 富 的 实 战 经 验 SBTI 遍 布 全 球 100 多 名 管 理 咨 询 和 实 施 专 家 中, 有 30% 以 上 的 人 都 拥 有 博 士 学 位, 具 有 丰 富 的 海 外 ( 实 施 ) 能 力, 他 们 把 积 累 了 几 十 年 在 商 业 管 理 方 面 的 经 验 投 入 到 管 理 方 法 的 实 施 过 程 中, 根 据 不 同 领 域 的 特 点, 将 有 效 的 管 理 工 具 和 调 控 手 段 贯 彻 到 每 一 个 流 程 当 中, 以 达 到 预 期 的 目 的 不 论 资 历 还 是 经 验,SBTI 的 专 家 代 表 了 全 球 六 西 格 玛 及 管 理 咨 询 领 域 的 顶 尖 水 平 SBTI 顾 问 的 行 业 分 布 快 速 的 能 力 提 升 SBTI 具 备 严 格 的 顾 问 业 师 评 价 体 系 及 顾 问 培 养 体 系 SBTI 企 业 大 学 SBTI 顾 问 分 为 十 级 : 高 级 顾 问 (1-5 级 ) 初 级 (6-10 级 ), 根 据 顾 问 的 资 历 和 客 户 评 价 确 定 级 别, 并 制 定 有 明 确 的 激 励 和 晋 级 方 案 SBTI 企 业 大 学 根 据 每 个 顾 问 的 职 能 特 点, 制 定 培 养 计 划, 通 过 一 对 一 的 辅 导 培 养 年 轻 顾 问, 从 而 引 导 顾 问 团 队 快 速 提 升 咨 询 实 施 水 平 SBTI 企 业 大 学 讲 师 团 由 资 深 的 内 部 顾 问 和 来 自 海 内 外 企 业 及 高 校 的 业 界 权 威 组 成, 每 月 一 次 的 集 中 培 训 和 学 习 交 流, 使 得 SBTI 的 顾 问 能 够 10 倍 速 的 提 升 能 力, 将 卓 越 运 营 的 能 力 传 递 给 企 业 60
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