Transcript Six Sigma in Healthcare

Six Sigma in Healthcare:
A prescription for change?
Carolyn Pexton
October 24, 2007
CAHPMM Annual Conference
Objectives
• Articulate the case for organizational
transformation in healthcare
• Acquire high-level understanding of Six Sigma
and related change management methods
• Learn from case study examples
• Know the keys to a successful deployment
2
The Need for Change in
Healthcare
A Perfect Storm
• Patient safety and quality
concerns
• Demographic changes
• Rapidly changing technologies
and treatment
• Digital transition
• Workforce issues
• Financial constraints
• Rising consumerism
• Un and Under-insured
• Leadership challenges
Time cover story - May 1, 2006
Q: What Scares
Doctors?
A: Being the Patient
“To a large extent, health care systems were not designed
with any scientific approaches in mind. Too often there are
long waits, high levels of waste, frustration for patients
and clinicians alike, and unsafe care. A bold effort to
design health care scheduling systems, process flows,
safety procedures, and even physical space will pay off in
better, less expensive, safer experiences for patients and
staff alike.” – Don Berwick, IHI
The high cost of poor quality:
New payment rules from CMS
• Along with human suffering, treating medical errors
such as hospital-acquired infections come with a
high financial cost.
• Roughly 1 in 10 Americans will acquire an infection
as a result of their hospital stay, and this stay will
be lengthened in order to provide appropriate
treatment.
• Hospitals will no longer be reimbursed by CMS for
certain errors and the additional resources they
require.
Change is imperative!
Centers for Medicare and Medicaid Services (CMS), HHS CMS-1533-FC, Medicare
Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal
Year 2008 Rates.
Technology alone isn’t the answer…
Simply overlaying 21st century
technologies on top of 20th
century workflow will not yield
the necessary cost, quality and
efficiency benefits.
Hospitals must also redesign
processes and address the
human side of change.
Overcoming the barriers
1. Culture
• Overcome resistance
• Shape common goals
2. Alignment and accountability
• Ensure clear linkage between
improvement initiatives, performance and
strategic goals
• Develop consistent management
structure
3. Control
• Put mechanisms in place to monitor and
maintain results long-term
Getting there from here
• Transformation in healthcare
won’t happen without
transparency.
• Transparency can’t happen without
culture change.
• Culture change won’t happen without a
bold vision, a common toolset and
unwavering commitment.
Six Sigma Background
and Basics
Where did Six Sigma Come From?
• Initially developed at Motorola in
the 1980s to improve processes,
meet customer expectations and
maintain market leadership
• During the first five years, even suppliers were
required to participate in the process
• Six Sigma was adopted by Allied Signal and GE
and further developed into a true management
system
• Success led to global deployment across a
variety of companies and industries – including
healthcare!
What does Six Sigma mean?
The term “Sigma” is a measurement of how
far a given process deviates from perfection
– a measure of the number of “defects”. Six
Sigma correlates to just 3.4 defects per
million opportunities.
A quality improvement methodology that
applies statistics to measure and reduce
variation in processes.
A management system that is
comprehensive and flexible for achieving,
sustaining, and maximizing success.
ZB
DPMO
2
308,537
3
66,807
4
5
6
6,210
233
3.4
Key Concepts
Critical to Quality (CTQ): Attributes most important to
the customer
Defect: Failing to deliver what the customer wants
Process Capability: What your process can deliver
Stable Operations: Ensuring consistent, predictable
processes to improve what the customer perceives
An Enabler for Cultural Change
Patient’s View
of “Registration”
How does the customer view my
process?
What does the customer look at to
measure performance?
Registration
Time to
drive to
facility
Time to
Park Car
Lobby
Time
Walk to
Procedure
Area
Hospital’s View
of “Registration”
Procedure
Time
Six Sigma illustrated
Target
Customer
Specification
3s
w i d e
6.6% Defects
BEFORE
3s
v a r i a n c e
Target
Customer
Specification
AFTER
6s
No Defects
6s
slim variance
Patients don’t feel the averages, they feel the variability
How good are we today?
Statistically...
Six Sigma refers to a
process that produces
only 3.4 Defects Per
Million Opportunities
Sigma
Level
2
3
4
5
6
DPMO
308,537
Goal
66,807
6,210
233
3.4
~93.3%
“Good”
99.99966%
“Good”
How good do we need to be?
The Classical View of Quality
The Six Sigma View of Quality
“99% Good” (Z = 3.8s)
“99.99966% Good” (Z = 6s)
20,000 lost articles of mail per hour
Seven lost articles of mail per hour
Unsafe drinking water almost
15 minutes each day
One minute of unsafe drinking water
every seven months
5,000 incorrect surgical operations
per week
1.7 incorrect surgical operations
per week
2 short or long landings at most
major airports daily
One short or long landing at most
major airports every five years
200,000 wrong drug prescriptions
each year
68 wrong drug prescriptions
each year
No electricity for almost
7 hours each month
One hour without electricity
every 34 years
The DMAIC
Methodology
Define
CTQs
... define the problem, clarify
and relate it to the customer..,
Practical
Problem
...measure your target metric
and know your measure is good...
Statistical
Problem
…look for root causes and
generate a prioritized listing of them.
Statistical
Solution
... determine and confirm the
optimal solution ...
Practical
Solution
…be sure the problem doesn’t
come back… sustain it
Sample fishbone diagram – poor xray quality
1.
Form cross-functional team
2.
Construct cause-and-effect
diagram, listing potential
causes on each branch
3.
Prioritize causes on each
branch – select important
causes and ignore trivial
ones
4.
Conduct detailed analysis
and develop an action plan
5.
Follow up until action is
completed and results are
verified
6.
If results are unsatisfactory,
use statistical tools (such as
Regression Analysis) to
further analyze the problem
Key roles and responsibilities
Champions/Sponsors: Trained business leaders who lead the
deployment of Six Sigma in a significant business area
Master Black Belts: Fully-trained quality leaders responsible for
Six Sigma strategy, training, mentoring, deployment and results
Black Belts: Fully-trained Six Sigma experts who lead
improvement teams, work projects across the business
and mentor Green Belts
Green Belts: Fully-trained individuals who apply
Six Sigma skills to projects in their job areas
Team Members: Individuals who
receive specific Six Sigma training
and who support projects in their
areas
Translating Goals into Results
The Big Ys
Clinical excellence
Patient safety
Financial results
Patient satisfaction
Physician/staff
satisfaction
Community service
ALL DRIVEN BY
PROCESSES
Linking Projects to Healthcare “Y”s
World Class
Team
CTQ’s
Clinical Quality
Growth
Excellent
Service
Top Financial
Performance
Quality
Measures
Reimbursement
Productivity
Core Measures
Performance
(CHF)
Accuracy of
Patient Info
Nursing
Documentation
Discharge
Process
Lab TAT
Medical
Necessity
Validation
Pain
Management
ICU
Throughput
Radiology TAT
On Base
Implementation
Appropriate
Placement
Communication
of Quality-Public
Certifications/
Accreditations
ICU Clinical
Effectiveness
Reconciliation
of Patient
Medicine
POS
Collections
Patient
Classification
Process
Cath Lab
Scheduling
System
Reduce FPC
No Shows
Patient Flow
Wait
Times/Delays
PACU/ED
Admit to Bed
Perioperative Service Needs
Performance
Metrics
Core Business
Metrics
First Case Start
Time
• Quality
• Capacity
• Net Revenue
Room
Turnover Time
Room
Utilization
Patient Safety
Critical
Factors
Project
Solutions
• Preop delays
• Surgeon NA
• Anesthesia NA
• Equipment/
Supplies NA
• Lean Preop Process
• Staffing/anesthesia time
• Preference Cards
• Equipment
replenishment
• Staff roles
• Setup/Cleanup
process
• Communication
• Work-Out: Work Process,
Roles, Responsibilities,
Communication
• Kaizan Event: TAT
• Block Time
Allocation/Util
• Case Time Alloc
• Add-on Mgmt
• Scheduling Guidelines
• Level Loading Blocks/
Cases across days/time
by clinical service
• Match sched to staffing
• New guidelines: Add-ons
• Anesthesia Time
• Right Side
• Instrument Counts
• Process for identifying,
reporting, taking
corrective action
The Ultimate Goal
Patient
Safety
Becoming a Better Healthcare Provider
Patient
Satisfaction
Business
Processes
Tools
Physician –
Staff
Satisfaction
Hospital
Management
Processes
Community
Relationship
Clinical
Care
Processes
Projects and Work-Outs
Financial
Viability
Performance Excellence
Outcome
It’s really not about projects – they are a means to an end!
In simple terms…
• Listen to the customer
• Define their expectations
• Measure how many times we get it wrong
• Fix it
• Prove the fix is real and meaningful
• Make it stick !!!!!
Related Methodologies and
Change Management
Techniques
Large scale
improvements
require precise
coordination and a
common
“cadence”
to advance
smoothly
62% of initiatives
fail due to lack of
leadership
commitment
Change Acceleration Process (CAP)
Leading Change
Creating a Shared Need
Shaping a Vision
Mobilizing Commitment
Current
State
Transition
State
Improved
State
Making Change Last
Monitoring Progress
Changing Systems & Structures
Stakeholder Analysis
Change Acceleration Process
Stakeholder Analysis
Names
Dr. XYZ
Influence
loop
Dr. R
Steps:
r 3/96
Strongly
Against
Moderately
Against
Neutral

Moderately
Supportive
Strongly
Supportive
x

1. Brainstorm key stakeholders by name
Plot where individuals currently are with regard to desired change ( = current).
2. Plot where individuals need at the minimum level to be (X = desired) in order to
successfully accomplish desired change-identify gaps between current and desired.
3. Indicate how individuals are linked to each other, draw lines to indicate an influence link
using an arrow (  ) to indicate who influences whom.
4. Plan action steps for closing gaps with influence strategy.
UCSS
36
Exercise: Stakeholder Analysis
Take home assignment for your current project:
1. Brainstorm key stakeholders by name
2. Plot where individuals currently are with regard to
desired change ( = current).
3. Plot where individuals need to be at the minimum
level (X = desired) in order to successfully
accomplish desired change-identify gaps between
current and desired.
4. Indicate how individuals are linked to each other,
draw lines to indicate an influence link, using an
arrow to indicate who influences whom.
5. Plan action steps for closing gaps with influence
strategy.
Change Acceleration Process
Stakeholder Analysis
Names
Steps:
r 3/96
Strongly
Against
Moderately
Against
Neutral
Moderately
Supportive
Strongly
Supportive
1. Brainstorm key stakeholders by name
Plot where individuals currently are with regard to desired change ( = current).
2. Plot where individuals need at the minimum level to be (X = desired) in order to
successfully accomplish desired change-identify gaps between current and desired.
3. Indicate how individuals are linked to each other, draw lines to indicate an influence link
using an arrow (  ) to indicate who influences whom.
4. Plan action steps for closing gaps with influence strategy.
UCSS
36
Work-Out
Typical Session
Kick-Off
Ground Rules,
Introductions,
Roles, etc
Brainstorm
Issues/Barriers
Define the Problem
Mission
Categorize
Issues/Barriers
Prioritize
Categories
Define “Headers”
for Categories
2 10
Develop
Action Plans
Assess
Potential Solutions
What:
Who:
When:
9
4
Share
Action Plans
Resources
Brainstorm
Potential Solutions
6
Report-Out
Action Plans
What is Lean?
The relentless pursuit of the perfect process
through waste elimination…
We Spend 75-95% of Our Time Doing
Things That Increase Our Costs and
Create No Value for the Customer!
In healthcare, Lean is about shortening the time
between the patient entering and leaving a care
facility by eliminating all non-value added time,
motion, and steps.
Lean Thinking Process
The 5 steps to Lean Thinking …
Define value from the customer’s
perspective and express value in
terms of a specific product
1
Specify Value
The complete elimination of
waste so all activities create
value for the customer
2
Map the
Value Stream
3
Establish
Flow
5
Work to
Perfection
Nothing is done by the upstream process until the
downstream customer signals the need
Map all of the steps…value added
& non-value added…that bring a
product of service to the customer
4
Implement
Pull
The continuous movement of
products, services and information
from end to end through the process
What are your customers willing to pay for?
Project funnel and tool selection
Voice of
Customer
Best practice, patient satisfaction
results, benchmarks, suggestions,
complaints
Opportunities
Inefficient processes, waits, rework,
errors, substandard performance
How do you know you have a problem?
Scoping
Low
Hanging
Fruit
Is data available?
What is expected performance or CTQ’s?
Projects
What is payback/benefits of project?
Priority
Setting
Mgmt
Engineering
Study
Lean
CAP
Do you have the appropriate sponsor?
Work-Out
Tool
Selection
Six
Sigma
DMAIC
CQI
Team
Synergistic Tools and Processes
 Change Acceleration Process (CAP) – a
process that proactively plans for change
acceptance for successful implementation
 Work-Out - a process that promotes rapid
problem solving via involvement and
accountability
 Lean - an improvement methodology focused
on eliminating waste through detailed analysis
of workflow in relation to time
 Six Sigma – an improvement methodology
driven by the statistical analysis of data
to identify causes of unwanted variation and
defects
Healthcare Case Study
Examples
Healthcare Project Examples
•Improving process/safety for medication administration
•Reduction in Blood Stream Infections in ICU
•Reducing ventilator acquired pneumonia
•Emergency Department Patient Wait Time
•Improved Patient Throughput in Radiology
•Reduction in Lost Films
•MR Exam Scheduling Improvement
•Staff Recruitment and Retention
•Operating Room Case Cart Accuracy
•Physician (Professional Fee) Billing Accuracy
•Appointment Backlog for Hospital-Based Orthopedic Clinic
•Quality of Care and Satisfaction of Families in Newborn ICU
Pioneers in Six Sigma for
Healthcare In March 1998, John C. Desmarais,
Commonwealth Health Corporation's
President and Chief Executive Officer,
introduced CHC to Six Sigma, a quality
initiative program developed by Motorola
and perfected by General Electric.
• By the end of 2001, over 2000 employees had attended at
least one full day of Six Sigma awareness training,
• Initial projects generated annualized savings of $276,188 in
billing, decreased annual radiology expenses by $595,296,
and reduced errors in the MR ordering process by 90%.
• Within 18 months, CHC had increased efficiency, improved
the patient experience, eliminated over $800,000 in costs
and reenergized the culture.
Commonwealth Health Corporation web site – www.chc.net
Case Study: Improving ED
Throughput
Project Title: ED Throughput
Project Scope:
In Scope - Treat to Street pts, Staffing patterns (ED MDs
& RNs), Equip’t, FTEs, Registration, Lab, X-R.
Out of Scope - ED Admits, ED Hold Hours, Bed Control,
Housekeeping, Transport to Floor, MR, US, CT, Pharm.
Customer(s):
Patients, Physicians
Potential Benefits:
Project Description :
• Decrease LWBS
• Increase patient satisfaction (Press Ganey #s)
• Reduce ED LOS (Soft Dollars)
PS - Moving “Treat-to-Street” patients through the ED
takes too long. PD - One-third of our patients wait
longer than 60 minutes to be seen by a physician.
Alignment with Strategic Plan:
• Customer Service
• Growth
• Efficiency
Measure
What is the Right Y (CTQ) to Measure? How will it be measured?
 Y = Door to Doc Time. From the time a patient enters through the door until the physician
enters the exam room to assess the patient, measured in minutes.
What is our goal?
 We will improve the average ED Throughput Time for Treat and Street Patients by 40%.
This will reduce the weighted average Door-to-Doc time from 65 minutes to 40 minutes.
 We will improve our throughput yield of patients seeing a physician within 60 minutes
(USL) from 67% current to 80%. This reduction in our defect rate of 13% represents over
7,500 customers.
What are the specification limits? (LSL, USL) What is the Target?
 Based upon our VOC data, we have set a USL of 60 minutes and a Target Mean of 40
minutes.
Analyze
Value Stream Map Opportunities for Performance Improvements:
Door-to-Doc Subcycle
Triage
Front
Desk / QR
Fax
written
report/ED
X-Ray –
In ED
EKG, Draw
Blood, UA,
Order X-Ray,
administer Pain
med
Portable
2- RNs
1 Tech
Team Area
Patient Flow
ED
Waiting
Room
Call critical values
Treatment
People Flow
Tube/blood
(RN, MD, etc.)
E-Info Flow
MD
Other Flow
(blood, etc.)
Phone Call
Patient Wait Time
Arr
QR
6.3 min
QR
Triage
11.6 min
Triage
Bed
23.5 min
Current Average Cycle Times
Bed
MD
22.9 min
Lab
Analyze
Statistical Analysis
Door-to-Doc Causes (Xs)
Measurements
Materials
People
G
A
y
it
cu
ge
r
de
en
A
s
th
on
M
ks
ee
W
ys
Da
ts
es
if
Sh
ut
in
M
Triage Sheets
ge
Nurses
Physicians
d
ee
Sp
ce
n
rie
pe
Ex
il
Sk
Supplies
e
rg
ha
r ia
t
I
RO
os
C
e
nu
ve
Re
Financial Metrics
Software
Registration
C
T
T
LWBS
r
ra
k
ED
e)
c
an
in
(F
n
io
ion
is
er
nv
I
yp
H
g
in
ck
ra
an
te
c ia
o
Satisfaction
ist
uic
Q
g
Re
ss
t
n
t ie
Pa
ci
si
hy
P
A
Chart
Patient Attributes
g
Re
Time
Associate Attributes
Door-to-Doc
x
Fa
r
pie
Co
Triage Level
y
Ra
X
b
La
ls
ve
Le
s
rn
tt e
Pa
Ancillary Svcs
Office Equipt
Pyxis
Staffing
EKG
M
ly
th
on
ay
D
of
e
im
T
k
ee
fW
o
ay
s
D
ay
id
ol
H
ly
er
rt
ua
Q
Transportation
Computers (screens)
Seasonality
Env ironment
Advanced Triage
Methods
Dynamap
Machines
Analyze
What X’s (inputs) are causing most of our variation?
Results for: Historical DOE Door to Doctor Time
Factorial Fit: D2D versus Express Care, X-Ray, Bed Open`
Estimated Effects and Coefficients for D2D (coded units)
Term
Constant
Express Care
X-Ray
Bed Open
Express Care*X-Ray
Express Care*Bed Open
X-Ray*Bed Open
Express Care*X-Ray*Bed Open
S = 10.1865
R-Sq = 96.87%
Effect
35.56
36.06
-37.81
33.69
32.56
14.06
5.19
Coef
87.34
17.78
18.03
-18.91
16.84
16.28
7.03
2.59
SE Coef
2.547
2.547
2.547
2.547
2.547
2.547
2.547
2.547
T
34.30
6.98
7.08
-7.42
6.61
6.39
2.76
1.02
P
0.000
0.000
0.000
0.000
0.000
0.000
0.025
0.338
R-Sq(adj) = 94.12%
Analysis of Variance for D2D (coded units)
Source
Main Effects
2-Way Interactions
3-Way Interactions
Residual Error
Pure Error
Total
DF
3
3
1
8
8
15
Seq SS
15979.9
9571.7
107.6
830.1
830.1
26489.4
Adj SS
15979.9
9571.7
107.6
830.1
830.1
Adj MS
5326.6
3190.6
107.6
103.8
103.8
F
51.33
30.75
1.04
P
0.000
0.000
0.338
Improve
What do we want to know?
Screen Potential Causes?
Discover Variable Relationships?
Establish Operating Tolerances?
What X’s (inputs) have we chosen to improve?
1.
Bed Availability
2.
– The Measure Phase data demonstrated that Door-to-Doctor time increased by two to
three times when there is no bed open for the patient.
Ancillary Services
3.
– The data further showed that the time it takes to perform an X-Ray or Lab testing is
statistically significant in relation to Door-to-Doctor time.
Express Care
– Lower acuity patients (i.e. Level 3 / Express Care) wait longer to see a physician than
do higher acuity patients (i.e. Level 1).
Improve
Value Stream Map Key Points / Opportunities for Improvement:
Bedside Registration
Triage
EKG, Draw
Blood, UA,
Order X-Ray,
administer Pain
med
Front
Desk / QR
2- RNs
1 Tech
Patient Flow
Registration
If rooms ful
may reg pt
while
waiting.
Non-value added
step removed
ED
Waiting
Room
People Flow
(RN, MD, etc.)
E-Info Flow
Patient Wait Time
Impacts:
1 – Inc. Patient Satisfaction
2 – Red. time by 8.7 minutes
3 – Red. variability in process
Improve
What is the mean and median of our process? What is the standard
deviation?
 Mean score
 Median
 Standard Deviation
 HI/LO
 Range
Measure Phase
64.3 minutes
38.5 minutes
44.7 minutes
241 / 11 minutes
230 minutes
Control Phase
39.8 minutes
34.0 minutes
27.7 minutes
129 / 4 minutes
125 minutes
+D %
38.1%
11.7%
38.0%
46.5% (HI; outliers)
45.7%
What is our process capability (Z score, DPMO, Yield %)?
 Z Short-Term Score =
 DPMO =
 Yield % =
1.91s
333,333
66.7%
2.35s
175,000
82.5%
0.44s
<109,523>
15.8%
Control
What are our financial results? How were they calculated?
 Our Financial Impact is $1,120,650 and reflects the improvement in LWBS visits and the
corresponding admissions as well as a conservative (5%) recognition as a result of
throughput improvement.
What is the plan for monitoring/ auditing the process? What is the Control
Plan?
Metric
Target
Values
Measurement
Method
Upper/Lower
Spec Limits
Measurement Definition
Time begins when a patient
crosses the reaches Quick
Registration. This time is
< 60 minutes; completed when a physician
Door to Doctor Time Yield = 80% greets the patient at the bedside. Manual - CDR Web USL = 60 minutes
Patient leaves the ED after at
least completing the Quick Reg
process but before physician
Automated USL = 1.0% of
LWBS%
< 1.0%
performs examination.
ED Tracking
ED visits
Control
Method
Responsibility
Frequency (Who will measure)
Dashboard;
Xbar-R Chart Weekly
Dashboard;
Xbar-R Chart Weekly
Alert Flags
M. Kelly-Nichols
Two out of three weeks where
80% of patients are not seen
by a physician within 60
minutes.
M. Kelly-Nichols
Two out of three weeks where
LWBS % exceeds 1.0%.
Case Study: Linen Utilization
Project Title: Linen Utilization
Project Description: To Identify
opportunities within the organization
which allows for better linen utilization
without compromising quality or patient
care.
Problem Statement: Currently, our linen usage
is higher than what is expected for a facility of
our size and acuity level. We need to look for
ways to better utilize our daily linen supply and
lower our overall pounds per patient day as well
as our cost per patient day.
Project Scope: The use of linen for inpatients.
What is the Right Y (CTQ) to Measure? How will it be measured?
Y = Pounds Per Patient Day of Linen Used
Pounds Per Patient Day of Linen Used by Service Line
What are the data sources? How will the data be collected?
Data Sources include the Linen Distribution Program currently in place, as
well as national benchmark data.
What is our goal?
To reduce the overall linen utilization to between 14 and 16 pounds per
patient day.
High Level Process Map
Step 1
Inventory of linen
is taken in Linen
room.
Step 2
Linen order for the
next day is placed
with Tartan.
Step 7
Secondary
deliveries are made
to units as required
at 12 hour mark.
Step 3
Linen is received
the following
morning.
Step 6
Linen carts are
exchanged for
those already on
Nursing Units.
Step 4
Exchange carts
from previous day
are filled.
Step 5
Linen re-stock
amounts are
recorded in Textile
tracking program.
What is a defect, unit, opportunity?
Defects= Missed Delivery and Stock Outs, and any reading <14 or >18 lbs
per patient day
Units = Pounds per Patient Day
Opportunity = monthly data per unit
What are the specification limits? (LSL, USL)
LSL= 14 Pounds per Patient Day Average
USL= 18 Pounds per Patient Day Average
What X’s (inputs) are causing most of our variation?
Usage variations, training, old behaviors.
Graphical Analysis
Linen Usage by Unit
August 2003
14
.4
13
.3
5
13
.3
5
13
.3
5
13
.2
4
13
.2
4
13
.2
4
8.
74
10
.3
7
10
.5
3
8.
04
9.
1
9.
92
10
.1
3
8.
63
9
9.
66
9.
02
11
10
.7
7
13
10
.7
7
Pounds
15
13
.6
2
15
.3
8
16
.3
2
17
17
.0
7
19
17
.4
1
18
.8
8
19
.0
2
21
7
5
8 S L&D 7 North 7 South 6 North 6 South 5 North 5 South 4 North 4 South
Rehab
SNF
Resp.
Onc
CVDOU DOU
Unit
Avg. lbs/PD
National Avg.
CCU
CSU
ICU
GSH
AVG
Linen Pounds
Per patient Day
22
18
Ancillary Areas,
$138,000.00
16
Scrubs, $125,000.00
20.9
20.75
19 . 7 6
20.37
19 . 7 9
2 0 . 17
19 . 4 2
19 . 4 7
19 . 8 9
18 . 7
14
17 . 17
16 . 1Patient
17 . 1
17 . 0 1
17 . 3
16 . 4 4
Linen, $771,000.00
17 . 3
16 . 1
12
Month
Patient Linen
Scrubs
Ancillary Areas
Ju
l-0
3
A
ug
-0
3
Se
p03
M
ay
-0
3
Ju
n03
pr
-0
3
A
Fe
b03
M
ar
-0
3
03
Ja
n-
ec
-0
2
D
ov
-0
2
N
ct
-0
2
O
Ju
l-0
2
A
ug
-0
2
Se
p02
M
ay
-0
2
Ju
n02
A
pr
-0
2
10
M
ar
-0
2
Pounds per Patient Day
20
Achieved goal of 14 Pounds per Patient Day. Education and focus on Scrubs,
and ancillary usage will contribute to maintaining this goal.
What are our financial results? How were they calculated?
Our Per Patient Day costs for linen have decreased by 20% over 2002. From
an average of 20lbs to an average of 16lbs.
What is the WWW (Who-What-When) plan for turning the project over to the
process owner? What is the plan for monitoring/auditing the process?
The process is a permanent one and will be tracked through reports given to
the units, Executive Sponsor, and the Linen Utilization Committee.
The Linen Utilization Committee will oversee the process and progress.
Case Study: Supply Chain Improvement
Customer Need…
Four hospital system enjoying 50% market
share
Materials management improvements needed
to leverage economies of scale, utilize best
practices, and prevent inefficiencies:
• Pricing structure for orthopedic implants
highly variable
Barry D. Brown Health Education
• Inconsistent orthopedic implant utilization Center at Virtua West Jersey Hospital
Voorhees
• Deficiencies in OR charge master
capture
• Gap in OR supplies between what patient
pays vs. what hospital is charged
• OR “on hand” inventory management
needed
Process Improvement to Reduce Cost
Reduce Costs
Solutions…
• Orthopedic Implant Pricing Cap… Determined actual versus lowest and average
prices to establish a fair cap price.
• Orthopedic Implant Demand Matching… Examined 132 medical records and
compared implants used against widely accepted industry criteria for implant
selection by orthopedist
• Charge Master Review… Reviewed OR charge master systems and identified
opportunities for improvement and standardization
• Price Point Reduction… Identified price reduction opportunities
• OR Inventory Reduction… HISI contracted to conduct physical inventories in
four ORs and two surgical centers
Improve Quality
Results
• Project results along with data shifted purchases to a primary
orthopedic implant vendor, savings of $159,000 were attained.
• Annual savings of $239,400 through demand matching template
at all hospital sites that do hip and knee replacement surgery.
• Patient billing data review in FY2000 indicated potential loss of
greater than $200,000 annually due to missing charges, much of
which was rectified with the corrections in the current charge
masters.
• Project savings attained totaled $63,845 plus shared savings with
orthopedic cap project.
• Conservative inventory reduction by facility: Facility A $187k,
Facility B $92k, Facility C $47k, and Facility D $18k. Represents
an 8% reduction of the $4.1MM of baseline inventory on hand.
Sustainable Results With Bottom Line Impact
Summary, Keys to
Success and Q&A
The Big “Why”
Achieving 35% higher
“take home baby”
rate with increase in
successful
implantation at
hospital in Northeast
Better patient safety
with 91% improvement
in post-surgery
antibiotic use,
delivering annual
savings over $1 million
at hospital in Southeast
Shorter ED wait
times allow 28 more
patients per day to
be seen, with
potential financial
impact over $13
million annually at
hospital in Southern
California
Culture Change
Think about it….
Are the mission, vision and values of your
health system merely bullet points on a web
site, or are they clearly understood and
activated across the organization?
Are people empowered to drive change and
accountable for results?
Keys to implementing Six Sigma in
healthcare
• Gain leadership support and don’t skimp on planning!
• Identify opportunities and define the value proposition
• Ensure strategic alignment with organizational objectives and
incentives
• Develop a business case, identify team leaders and build a
plan for deployment
• Establish measurements and evaluate performance
• Manage change through ongoing communication efforts
• Monitor results and sustain improvement through review and
recognition
…and network with others who have
embarked on similar initiatives!
For more information contact:
Carolyn Pexton
925-275-0726
[email protected]
And visit the iSixSigma healthcare
portal
www.healthcare.isixsigma.com