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USING SIX SIGMA FOR PROCESS IMPROVEMENT IN HEALTHCARE
Is 99% Good Enough?
Three hospital campuses
Six Sigma In Healthcare
380 acute care beds
110 long-term careBowling Green
Scottsville
Franklin
Full range acute & tertiary • Open Heart Surgery• Cancer Treatment• Neonatal Intensive Care• Psychiatric Services• Home Health• Emergency Medical Services• Managed Care• Primary Care Walk-in Clinics• OP Rehab Center• Physician Practices• Free Clinic • Long Term Acute Care Hospital• Health and Wellness Center
Six Sigma In Healthcare
Introduction
In late 1997, President and Chief Executive Officer of Commonwealth HealthCorporation, (CHC), attended a conference and listened with interest as General Electric’s CEO spoke of his vision for GE as a World Class Six Sigmacompany. This innovative approach to quality and error reduction was at thispoint already receiving high marks for its transformational abilities at all levelsof corporate enterprise. Later conversations between the two leadersrevealed a shared passion for excellence and commitment to quality. Thisinitial encounter soon led CHC to embrace this vision of quality atCommonwealth Health Corporation.
Six Sigma In Healthcare
+ =
Six Sigma In Healthcare
CHC VIDEO
Six Sigma In Healthcare
What is Six Sigma?
Measure Measure of Quality:of Quality:Expresses how close a process or service comes to Expresses how close a process or service comes to meeting its customers’ expectation.meeting its customers’ expectation.
Method Method for Continuous Improvement:for Continuous Improvement:
Uses a rigid framework to approach process Uses a rigid framework to approach process improvement.improvement.
MindsetMindset for Culture Change:for Culture Change:When successful, Six Sigma fundamentally changes When successful, Six Sigma fundamentally changes the culture and operating philosophy of the company. the culture and operating philosophy of the company. It becomes “the way to do our job”. It becomes “the way to do our job”.
Six Sigma In Healthcare
Z or Sigma Level
Sigma Level Defect Rate Defects per Million
2 30.8% 308,5373 6.7% 66,8074 0.62% 6,2105 0.0233% 2336 0.00034% 3.4
By using the Sigma level to express how good a process is, we are able to compare dissimilar processes. Example: Radiology report turnaround time is at 2 sigma while an ambulance’s arrival on the scene is 4.3 sigma.
Is 99% Good Enough?
Six Sigma In Healthcare
99% Good (3.8 Sigma) 99.99966% Good (6 Sigma)
200,000 wrong drug 68 wrong prescriptionsprescriptions each year each year
5,000 incorrect surgical 1.7 incorrect surgical operations each week operations each week
50 newborn babies dropped One newborn baby droppedat birth each day every 2 months
Six Sigma In Healthcare
What Makes Six Sigma Different?
•Methodology is robust
• Process is measured using the customer’s specification rather than internally established thresholds
•Analysis is data driven
•Improvements are statistically valid
•Improvements are tested and proven
•Processes are controlled
•Project framework is rigid
Six Sigma In Healthcare
Culture change
• Traditional Beliefs:– Quality costs money– Inspection and rework
can capture defects– Quality of output is
enough– Control the worst case
and the average– 99% defect free is good
enough– Documentation can
control quality
• Six Sigma Beliefs:– Poor quality is extremely
expensive– Defects must be
prevented– Quality must be built into
the process (Sony TVs)– Variability is the enemy– Need to achieve 3.4
defects per million– Mistake proof to sustain
quality
Six Sigma In Healthcare
Strategic Alignmentto Driving Results & Leverage Resources
Organizational Dashboard for Success
Six Sigma In Healthcare
• Customer Satisfaction
• Quality of Service
• Efficiency
Measured by Press Ganey Scores
Measured by Timeliness (a rolled “z” score)
Measured by Operating Margin(cost per unit produced at departmental level)
Action Plan
Six Sigma In Healthcare
– Customer Service/Satisfaction Reduced Wait Times Meeting Service Expectations
– Delivered Quality of Care Reduced Medical Errors Increased Safety Use of Appropriate Technology
– At Lower Cost Increased Productivity Decreased Cost
Functional Structure
Six Sigma In Healthcare
PR
ES
IDEN
T A
ND
CEO
Hospital CEO &
Sponsor
EVP &Sponsor
EVP &Sponsor
Press Ganey Score & Target
Timeliness Z Score & Target
Cost Efficiency & Target
MasterBlack Belts
MasterBlack Belts
Brown BeltsBrown Belts
Cha
mpi
ons
& S
pons
ors
Cha
mpi
ons
& S
pons
ors
Green BeltsGreen Belts
Change AgentsChange Agents
Project Profile: Radiology Staffing Efficiency
Six Sigma In Healthcare
Baseline: .3 SigmaDPMM = 382,000
Critical X: Staff Schedule
Controlled Process:1.15 Sigma
DPMM = 125,000
Operational Problem: LaborCosts Too High in Radiology
Defect: Occurs any Time Staffing Exceeds Labor Resources RequiredFor Exam Volume
Improvements: •Staff Used CAP &
Work-out™ to Redesign Schedule
•14 Positions Eliminated•1st Yr. Savings $860,000
Six Sigma In Healthcare
Financial Returns
50%
60%
70%
80%
90%
100%
Radiology Cost Per Procedure
Senior Management’s Involvement
Six Sigma In Healthcare
•Created Vision Statement•Identified CTQs•Attended CAP/Workout Training•Attended Greenbelt Training provided by GE•“Shadowed” Greenbelt Projects•Participate in Formal Reviews by Greenbelts•Driven from “top-down”
Key Learnings
Six Sigma In Healthcare
•Commitment is Critical•Ideally From the Top•Watch for & Address the “Holdouts”
•People Selection•Best & Brightest
•Project Selection•Tied to Strategic Objectives
•Financial Results & Validation•Challenging, Challenging, Challenging
•Culture Change vs. Quality Tool
Define
Problem Statement
As employers continue to pass more of the cost to their employees through larger deductibles, higher co-pays, lower percentage of reimbursement, etc., reducing the loss that results from the patient’s portion not being paid becomes increasingly important.Measuring the length of time involved from point of service until payment is received on the self-pay portion of the patients bill on commercial accounts.
Measure
Scope of Problem
Total
1
Characteristic
1.357
1.357
ZBench
1.500
1.500
ZShift
556922
556922
PPM
0.556922
0.556922
DPO
0.557
DPU
5121
5121
TotOpps
1
Opps
5121
Units
2852
2852
Defs
Report 7: Product PerformanceDefect: any length of time greater than 104 days
ZST = 1.36
DPPM = 556,922
Analyze
Root of Problem
107 36 39 99125139141142147272345459801
4 1 1 3 4 5 5 5 510121628
100 96 95 94 90 86 81 76 71 66 56 44 28
2500
2000
1500
1000
500
0
100
80
60
40
20
0
Defect
CountPercentCum %
Per
cen
t
Cou
nt
Pareto Chart for Location
Emergency Room charges account for 40% of the defects.
Analyze
Root of Problem
Mood Median Test: stacked versus subs
Mood median test for stacked
Chi-Square = 10135.57 DF = 4 P = 0.000
Individual 95.0% CIs
subs N<= N> Median Q3-Q1 ---------+---------+---------+-------
Amt. of 4531 590 1.0 1.0 +
Coded Bi 3221 1900 3.0 2.0 +
coded lo 74 5020 20.0 7.0 +-)
coded ty 1787 3334 7.0 4.0 +
Primary 3970 1151 2.0 2.0 +
---------+---------+---------+-------
6.0 12.0 18.0
Overall median = 3.0
There is a statistical difference in the medians based on location (Emergency Department).
Improve
Pilot
POINT OF SERVICE COLLECTIONS INITIATIVEEMERGENCY DEPARTMENT
Modified ED patient flow processes to ensure all eligible patients are routed through a formal “checkout” after being treated and discharged by clinicians. Developed job description for Financial Counselor position. Interviewed and hired a Financial Counselor. Developed training schedule, which started on March 21st. Went through a very extensive training schedule including tutorials on collection techniques and role-playing. Training with CFM, Hillcrest Credit Agency, Patient Registration, and Six Sigma representatives. Hours for the position are Sunday through Thursday, 1:00pm through 9:00pm. Comprehensive education and dialogue took place prior to rolling out the new processes to secure buy-in and compliance from staff. Developed a new policy and procedure for post dated checks which allows us to collect money while ensuring the post dated checks are not deposited before the agreed date. This new policy allows for a check to be written with a payable/deposit date up to 5 days from the time of service.
Improve
Pilot
POINT OF SERVICE COLLECTIONS INITIATIVEEMERGENCY DEPARTMENT
Developed a comprehensive reference manual for the Financial Counselor. Developed a patient education leaflet to distribute to all patients at time of registration. Murray Raines reviewed prior to implementation. Developed standardized cash collection procedures and forms. Developed necessary tools for ongoing performance analysis. These include sample scripting, payer matrix, key metrics to be completed daily, and monthly trend analysis. Will use the monthly trend analysis to benchmark progress against goals, highlight shortcomings and target interventions. Financial Counselor scripts have been developed specific for self-pay patients as well as insured patients with co-pays.
Improve
Pilot
POINT OF SERVICE COLLECTIONS INITIATIVEEMERGENCY DEPARTMENT
The newly designed process includes the nurse bringing patients to the checkout desk after treatment. We are currently working with the nursing staff to increase compliance of routing patients to the financial counselor desk. Careful scripting has enhanced customer interactions. The first full week of implementation was April 3rd and to date, we have had no official complaints.
Improve
Results
Total
2
1
Characteristic
2.342
3.402
1.828
ZBench
1.500
1.500
1.500
ZShift
200000
28571
371429
PPM
0.200000
0.028571
0.371429
DPO
0.029
0.371
DPU
70
35
35
TotOpps
1
1
Opps
35
35
Units
14
1
13
Defs
Report 7: Product Performance
Totals Dollarscollected duringthis time frame
$1,613
$9,141
7 Weeks (35 days)Prior to Pilot
7 Weeks (35 days)During Pilot
Improve
ResultsChi-Square Test: GOOD, BAD
Expected counts are printed below observed counts
GOOD BAD Total
1 22 13 35 (Before Pilot)
28.00 7.00
2 34 1 35 (After Pilot)
28.00 7.00
Total 56 14 70
Chi-Sq = 1.286 + 5.143 +
1.286 + 5.143 = 12.857
DF = 1, P-Value = 0.000
P value of 0 indicates a statistical difference in the number of days that money was collected prior to and after the pilot. The same 7 week time period was used (35 days).
Improve
Results
Chi-Square Test: Re-Measure Pass, Re-Measure Fail
Expected counts are printed below observed counts
Re-Measu Re-Measu Total
1 37 3304 3341 (BEFORE PILOT)
122.69 3218.31
2 209 3149 3358 (AFTER PILOT)
123.31 3234.69
Total 246 6453 6699
Chi-Sq = 59.846 + 2.281 +
59.543 + 2.270 = 123.941
DF = 1, P-Value = 0.000
P value of 0 indicates a statistical difference in the number of patients that money was collected from prior to and afterthe pilot. The same 7 week time period was used (35 days).
Improve
Results
Identifying incorrect information given at time of registration and making corrections (re-scanning correct insurance card, etc.), reducing re-work and increasing turn around time on payment.
Continuing to work on clinical compliance (24 hour mandate should show marked improvement).
With relatively little investment, the analysis suggests potential increases in POS annual cash collections in the ED by approximately $203,712.
During this 35 day time frame, promissory notes amounting to $11,716 have been signed at POS. No attempts made at POS previously.
Deter future unnecessary visits to the Emergency Room.
Control
Results
Sample Size Required To Statistically Confirm PPM Reduction
DPPM p(d) ZST
Process performance (Before change) --> 371,429 37.1% 1.8
Process performance (After change) --> 28,571 2.9% 3.4Opportunities on each unit: --> 1
Confidence --> 95.0%
TOP's UnitsSample size required to distinguish between processes --> 20 20
Control
Financial ResultsFinal Cost Savings and Cost of a Defect
p(d) ZST
Original Defect Rate --> 37.1% 1.8
New Defect Rate --> 2.9% 3.4
Reduction in the Rate of Defects --> 92.3%
Cost of a Defect from R2 --> $1,504,099 <-- Enter Cost of a Defect from your R2
Cost Savings from reduced defects --> $1,388,401
Other Costs associated with your Project -->
Total Final Cost --> $1,388,401 <-- Report this in your R4
Current Cost of a Defect --> $115,698 <-- This is what remains as a Cost of a Defect
Finalized cost based on a 92.3% reductionin the rate of defects = $1,388,401
Control
Sustaining Success
Presented findings to stakeholders and corporate sponsors.
Met with Director/Supervisor of ER registration and turned project over. Reviewed re-measure dates and procedures for collecting and monitoring.
Developed procedure for collecting data and updating dashboards.
Provided dashboards and training/instructions for updating and distribution.
Leveraged learnings in Outpatient setting.
Completed project binder.
Control
Transfer the Learnings
Based on the success of the Emergency Department project, we started a similar project in the Outpatient areas and are currently transferring those learnings to our Scottsville and Franklin hospitals for their Emergency Departments and Outpatient areas.
Prior to the project, there was virtually no point of service collection. We now collect more that $10,000 in the ED most months at our Bowling Green location. In the Outpatient areas, we previously collected about $5,000 in a three-month period. After applying the same methodology, monthly collections for outpatients have increased to $50,000 each month.
The Point of Service collection projects are in the pilot phase preparing for implementation. We anticipate equally good results in those locations.
Six Sigma In Healthcare
QUESTIONS?
THANK YOU!