Transcript Document

"Tools to Help You Achieve a Higher Say/Do Ratio"
Using Dashboards to Measure and Improve Service Levels, Cost per Case, and Supply
Expense Metrics
3rd Party Decision Support to Manage Information on Physician Preference Items to Drive
Decisions
Alignment with Internal and External Benchmarks to Target and Reduce Costs
“It is not the strongest
of the species that
survives, nor the most
intelligent, but the
one most responsive
to change.”
—Charles Darwin
“Without being disrespectful, I consider the U.S. healthcare delivery
There
are virtually no
performance
measurements and
no standards.
system the largest cottage industry in the world.
Trying to measure
performance … is the next revolution in healthcare.”
Richard Huber, former CEO, Aetna
“Some grocery
stores have better
technology than
our hospitals and
clinics.”
—Tommy Thompson, former
HHS Secretary
Source: Special Report on technology in healthcare, U.S. News & World Report
Adaptation
Four key concepts can help business leaders move
away from prediction and guesswork and toward
continuous adaptation
— and without risking sudden organizational
upheaval.
Business Behaviors
Need to Change
Our Business Environment
Change and Adaptation is Required
Even in the face of such volatility, some companies
continue to prosper. What’s their secret?
Increasingly, they have one characteristic in
common: They have developed the capacity to
respond to change. In fact, they are systematically
adaptive in their infrastructures, processes and
mind-sets. Consider these examples:
Dell Computer leverages an adaptive
supply chain to lower fixed costs while
responding to and profiting from
increases in demand — maintaining its
position as a leading PC maker in the
process.
GE Capital creates or sells off business
units based on market conditions,
incubating new units until they reach a
minimum profit threshold.
Wal-Mart has built a private exchange
for tier-one suppliers to exchange realtime information about sales within each
store worldwide, enabling greater
transparency and responsiveness.
Nokia has created an internal division
whose mission is to facilitate business
opportunities among company divisions
and partners, unlocking value in the
extended supply chain.
Why Measure?
To:
Not to:
• Identify ways to improve
• Cause Change
• Track performance
improvements
• Focus efforts on “right
things”
• Communicate strategies
and direction
• Recognize/ reward
•
•
•
•
Threaten
Inhibit change
Reduce risk-taking
Make comparisons
between like units
• Protect one’s backside
© N³
Measure the “right things”
Traditional Measurements
• Focus on costs and
control
• Top-down driven (nonparticipative
• Perpetuates “turfism”
Desired Measurements
• Effectiveness
– Doing the right things
– Quit doing wrong things
•
•
•
•
Efficiency
Support strategic initiatives
Simple
Involve employees in the
development
• Reduces “turfism”
© N³
Measurements -#1 Critical Success Factor
 You can get everything else right, but if you deploy a poor set of
measures (or none at all), any positive change accomplished will
soon be undermined by ineffectiveness and inefficiencies.
 There is no more powerful means of communicating that things
are going to be different from this point forward than to reshape
what is being measured.
 A goal-focused measurement system is the best vehicle for
institutionalizing targeted changes in the management process and
galvanizing management action.
Excerpts from “Better Change”
Price Warehouse
© N³
MEASUREMENTS
“The Purpose of collecting data is not to put
everything into neat figures, but to provide
a
basis for action”
K. Ishikawa
“What gets measured gets done”
Tom Peters
“ Tell me how you measure me and I’ll tell
you how I’ll behave. If you measure me in
an illogical fashion, do not complain about
illogical behavior”
Eliyashu M. Goldratt
Author of “The Goal”
© N³
MEASUREMENTS
“The Purpose of collecting data is not to put
everything into neat figures, but to provide
a
basis for action”
K. Ishikawa
“What gets measured gets done”
Tom Peters
“ Tell me how you measure me and I’ll tell
you how I’ll behave. If you measure me in
an illogical fashion, do not complain about
illogical behavior”
Eliyashu M. Goldratt
Author of “The Goal”
© N³
“Operations is
policy.”
—Fred Malek*
*Andy Pearson. Al McDonald. Jack Welch(?). U.S. Grant. Horatio Nelson.
“Execution is
the job of the
business
leader.”
—Larry Bossidy & Ram Charan/ Execution:
The Discipline of Getting Things Done
“Execution is a
systematic
process
of rigorously
discussing hows and whats, tenaciously
following through, and ensuring
accountability.”
—Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done
SUPPLIES EXPENSE
INFORMATICS
MODEL
EDUCATION OF
THE BOARD OF TRUSTEES
Resource Management Update
May 24, 2004
1. Recap of June 24,2002 Presentation
2. Where we are NOW
3. What are we doing about it
June 24, 2002
Top Level Supply Chain Performance Indicators
Aggregate NwH performance against the better performing
hospitals for Total Supply Expense as a % of Net Patient
Revenue :
FY 03 Requested $$ NWH performance is projected at 14.55%,
versus the Better Performing Hospital’s 14% The potential
annualized savings yield should be $ .879 million.
Aggregate NwH performance against better performing hospitals
for Supply Expense per Adjusted Discharge (CMI Adjusted,
including drugs) SEADC:
FY 03 Requested $$ NWH performance is projected at $787
versus the Better Performing Hospitals $750 per SEADC.
The potential annualized savings yield should be $ .95 million.
June 24, 2002
NWH Performance to Benchmarks
We are good, but we can improve
What Do We Need to Do
UPDATE 5.24.04
Use existing and new reporting tools for targeting and trending
Expanded Access/Training to Meditech Materials Management
COMPLETED
Supplies expense by product by EOC trending
Identify highest use/highest cost supplies determine if opportunities for
cost reduction exist
COMPLETED
Review, track and report on existing and new cost reduction
programs for expected performance
IMPLEMENTED
Embrace and report on Partners Contracting
IMPLEMENTED
Value Analysis progresses to Supplies Formulary Process
NOT IMPLEMENTED
May 24, 2004
NWH Performance to Benchmarks
Actual Performance, New Tools in Place
Source:
Supplies Expense as a % NPSR
Supplies Expense per Adjusted CMAD
May 24,2004
NWH Performance to Benchmarks
OKAY, but A lot of Pick and Shovel Work Required
NEED TO KEEP DIGGING
Source
Major Expense Drivers
Variance Analysis
FY 04 YTD Top 99 Items for Perioperative Services
35 pacemakers not planned
21% growth in ortho implants
April 2004 Top 99 Items for Perioperative Services
No apparent dissonance on supplies consumption
Trend seems in line with activity
TSI puts OR supplies
expense variance in
perspective
Resource Management
Progressive Processes (manage concurrently)
Sustain the Gain (continuous measurement)
Focus on effective process and
product selection & utilization will
generate the most sustainable
opportunities for resource
management.
Improve/Maintain
Optimum Product
Pricing thru
Contracting with
PHS
Effective Product and
Process Standardization
PHS/NWH (where applicable)
and NWH
21
Technology Arms Race 2004
The Arms Race
1950’s and 1960’s
NUTS AND BOLTS
Supplies Expense Focus
85% of Non Salary Expense for a Nursing Unit is Supplies Expense
Add a graph
Developing a Supplies Expense Metrics Tool
Review of 52 Supplies Expense EOCÕ
s
Breakout of Costs
Department Review of Trended Supply $$ Activity
Department Specific Trend Activity
Used My Supply Lines to Confirm Trend Across
THIRD PARTY DECISION SUPPORT
CONSULTANTS
DATA MANAGERS
NOT FOR PROFIT FIRMS
Capital Equipment Planning Requires Attention
To Multiple Processes
Forecasting
Time
People
Process
Research
Best Pricing
Utilization
New Technology
“Actual Need versus Want”
Scope
Technology
Resources
Equipment
Management
Long Range Planning Built on Productivity
versus Reactive Fact Based Forecasting
Transformation Continuum
Accenture Value:
IT
• End-to-End Product Knowledge
• Clinical Background & Experience
• Relevant Peer Insights
• Structured Approach
• Credibility and National Perspective
• Current Benchmarking for Equipment Cash Flow
Pricing and Trends
Improvement
Integration
Interfaces
Upgrades
Accurate Budgets
Information Flow
Appropriate Selection
Anticipated Repairs and Replacements
Acquisition Assistance
Revenue Enhancement
50
Graphs of Quoted Prices
and Discounts of
comparable purchases.
51
National Analysis by Category
52
Savings by Supplier
53
PERFORMANCE REPORTING
THE GROUND TRUTH
Dashboard monitored daily; big leap above 50th percentile in
courtesy of staff cleaning
November 2003 thru Dec
2003 performance on
cleanliness has improved
from the 23rd percentile to
projected 40th percentile
December 2003 performance
surpassed MA peer group mean
in almost all categories; 1st time
in Calendar 2003 standard room
score was greater than the mean
score. 31st percentile to >50th
percentile movement
Transport Stats thru April 2004
Efficiency Model for Staffing Determination
Model assumes 465k cleanable square feet
1,000 sq feet cleaned per productive hour for clinical space and 1,400 sq feet cleaned per productive hour for office space
62.62 Productive FTE’s Required (does not include 2.8 FTE’s for SSA)
Using an 11% PET backfill calculation, FTE requirement is 69.51 +
2.8 for SSA, this totals
ABC Model
Activity based model for staffing
developed based on detailed analysis
and requirements to establish and
maintain a clean environment
SSA workload included
Productive FTE’s required total 72.53;
Using an 11% PET backfill calculation,
the total FTE requirement is 80.5
Summary of ABC Model by Position
Bed Turnover
Housekeeping
• Instant notification
of
patient departure
• Visualization of
entire
enterprise
• Fast means of
tracking
workflow
• Easy view of staff
productivity
Action OI data compares productivity of the 158 and
164 job codes (approx 45 FTE's would match their
data)
Based on those two job codes, we are performing 50%
better than top 25%ile. We are at 2.91 hrs per adj
discharge, 25th%ile is 4.41 hrs per adj discharge.
Top 2%:5%
Benchmarking Performance Action OI
Current FTE run rate is in the 90th percentile based on clinical activity
Real World Dashboard
GEMS 25
Mission & Deliverables
Create a digital nervous system whereby information needed for business decisions is available realtime and on-line.
3 CTQ’s
• Global Consistency
• Weekly Rigor (Roadmap to be Daily)
• Automated (Drill-down capability)
How do we know if we’ve won?
•
•
•
•
•
3 Day Close!
One Set of Numbers
Operating Meetings Leverage the Web
Information Available on “Pull” Basis
People Like to be at Work
Decisions Made Easy
General Electric Company Confidential and Proprietary Information
E-Training, Communication, & Documentation
GEMS 25
The GEMS 25 Vision
Productivity
Process
Content
WHAT IF Wizards
Data Mining
Dashboards/
Metrics
Analysis
Partnering &
Decision Making
Alerts
Reporting
Packages
My
GEMS 25
Reporting
GEMS 25 Data mart
Aggregated measures and hierarchies data
Measures Library
Standardized definition of each measure
and library of business rules
General Electric Company Confidential and Proprietary Information
GEMS 25
To Webify or Not to Webify
Follow-on
• Simplify some more
• Automate ==> REAL-TIME
• Add Drillable layers
What’s not Allowed:
• Webify Gen 1 and walkaway
• Webify with no Six Sigma Rigor
• Launch with bad data
Impact on GEMS
Why?
• Fast communication
• Peaks interest
• Gen 1 easy to do
• Creates High Level design upfront
Low
Identify =>Webify=>Simplify
High
“Quick Hit” approach -
Easy
Ease of Implementation
Hard
• Quick Hit - Launch & Learn
• Simplify and Automate
• Each Metric has a Staff Sponsor
Change the Way We Think ... Launch & Learn
General Electric Company Confidential and Proprietary Information
GEMS 25
eFinance Transformation
Five Processes Account For 59% Of
Total Finance FTEs
Staff Time Allocation
By Category
22%
41%
11%
Medical Systems’ Spends 70% of our
Decision Support in Data Collection vs.
Analysis
General Accounting
Business Performance
Reporting
Accounts Payable
Allocation of Decision
Support time
Top Decile
Medical Systems
32%
29%
Data
Collection/
Compiling
Business Performance
Analysis
Budgeting
Analysis
71%
68%
Other
10%
7%
9%
GEMS 25 Enables:
• Self Service and Drill Down Capability
• Capacity for Value-added Analytical Activities
• Finance to Become a Better Strategic Business Partner
General Electric Company Confidential and Proprietary Information
GEMS 25
Organization Needs Vary … Drive Culture
General Electric Company Confidential and Proprietary Information
GEMS 25
Organization Needs Vary … Drive Culture
General Electric Company Confidential and Proprietary Information
GEMS 25
Managing Information
How will you lead your business?…the Ys
What are your critical few?…the Xs
Where do you get your data?…Operating Mechanisms
“The Web”, digital cockpit, Quickplace, email
When do you need it?…Timing
Daily, Weekly, Monthly, Quarterly
How Can the Right Visibility Make You a More Successful Leader?
General Electric Company Confidential and Proprietary Information
GEMS 25
The Contemporary GE Leader
Forward Looking … Action Oriented …
Analytical Self-Service …
Imagine
Real-time monthly pro-forma for the year
Automated e-mail trigger for cost overruns
Predictive Orders and Sales
Spontaneous CSO notification for critical customers
GEMS25 … enabling your future!
General Electric Company Confidential and Proprietary Information
GEMS 25
Observations/Learning's
• CEO needs to stay engaged throughout… “Joe looks at it”
• Need Strong Implementation Leader … Functional
• Identify Critical Few Metrics
• Balance Tops Down with Customer & Organization Input
• Over communicate … create a digitization Vision
• Spotlight leaders that are changing the way they work
• Data integrity is key but operational leaders need to own it
• Will probably take longer than planned… stay the course
Overcome Cultural Barriers with Consistent Commitment, Relevance &
Strong Leadership
General Electric Company Confidential and Proprietary Information
Why are we doing all this stuff?
July 7, 2015
Warming
Smoldering
Igniting
Burning
CMME
The BLUE Line displays the Operating Margin for each Fiscal Year
RED Line is Expense GREEN Line is Revenue, After FY08 the RED line is Above the GREEN Line.
Expenses are greater than Revenue = Burning Platform
Assumptions
$350
$8
$5.38
Milion
MARGIN
$340
$330
$320
$4.67
Million
MARGIN
$6
$4
$2
$ 401k
MARGIN
$0
$310
$300
$290
•The incremental revenue from the 3 big
Payors(Tufts, Harvard and Blue Cross) is $7
million less in FY08 than in FY 07
•Our Payor Mix is changing where more of our
reimbursement will be paid at or below cost.
•Salary rates will still continue to increase due
to labor shortages
($2)
Total operating revenue
Total expenses
($4)
THE BURNING PLATFORM
Operating margin
$ -5.27OUR INTERVENTION
WHAT HAPPENS WITHOUT
!!
($6)
Million
MARGIN
$280
$270
$ -11.72
Million
MARGIN
($8)
($10)
$260
($12)
$250
($14)
FY06
July 7, 2015
FY 07
Budget
FY 08
FY 09
FY 10
Projection Projection Projection
$$SCALE in MILLIONS
Warming
$350
Smoldering
Igniting
Burning
THE BURNING PLATFORM
WHAT HAPPENS WITHOUT OUR INTERVENTION !!
CMME
Assumptions
$340
$330
•The incremental revenue from the 3 big
Payors(Tufts, Harvard and Blue Cross) is $7
million less in FY08 than in FY 07
$320
•Our Payor Mix is changing where more of our
reimbursement will be paid at or below cost.
$310
•Salary rates will still continue to increase due
to labor shortages
Total operating revenue
$300
$290
FY06
FY 07
Budget
FY 08
Projection
FY 09
Projection
FY 10
Projection
Total expenses
$280
$270
Revenue and Expense Lines
Intersect Negatively after FY 08
$260
$$SCALE in MILLIONS
$250
July 7, 2015
Warming
Igniting
Smoldering
Burning
CMME
THE BURNING PLATFORM
WHAT HAPPENS WITHOUT OUR INTERVENTION !!
Operating Margin
•The incremental revenue from the 3 big
Payors(Tufts, Harvard and Blue Cross) is $7
million less in FY08 than in FY 07
$8
$5.38
Milion
MARGIN
$6
$4
$2
$4.67
Million
MARGIN
($2)
FY06
($4)
($6)
($8)
($10)
($12)
($14)
July 7, 2015
•Our Payor Mix is changing where more of our
reimbursement will be paid at or below cost.
•Salary rates will still continue to increase due
to labor shortages
$ 401k
MARGIN
$0
FY 07
Budget
Assumptions
FY 08
Projection
FY 09
Projection
$ -5.27
Million
MARGIN
FY 10
Projection
Operating margin
$$SCALE in MILLIONS
$ -11.72
Million
MARGIN
CMME
The “GAP” is sensitive to early action? The Cost
Management/Margin Enhancement effort is aimed at early
intervention. By achieving our annual margin targets we avoid
the “compounding” effect.
$40.00
$35.00
$30.00
$25.00
The GAP progression without
intervention
$18.43
$20.00
$15.00
$11.61
$11.61
$5.59
$5.59
$5.59
FY08
FY09
FY10
$10.00
$5.00
$0.00
$0.00
FY07
1st yr GAP
July 7, 2015
2nd yr GAP
3rd yr GAP
4th yr GAP