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Lean Six Sigma Strategic Deployment: An Art or a Science …?

Mariano Garrido-LopezShelly Phinney

Truman Medical Centers, IncKansas City, Missouri

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Agenda

• Organizational ProfileOrganizational Profile

• TIP Program: Lean 6 Sigma Strategic TIP Program: Lean 6 Sigma Strategic Deployment at TMCDeployment at TMC

• TIP: Setting up the InfrastructureTIP: Setting up the Infrastructure

• Project Selection and PrioritizationProject Selection and Prioritization

• Case Study: Revenue Cycle End-to-End Program - Genesis & Deployment

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Organizational Profile

• Multi-campus health care system- 2 acute Multi-campus health care system- 2 acute care hospitalscare hospitals

349 licensed beds annually349 licensed beds annually 17,325 admissions annually17,325 admissions annually 75,785 patient days annually75,785 patient days annually 3,458 births annually3,458 births annually 80,879 emergency department visits annually80,879 emergency department visits annually 291,595 outpatient visits annually291,595 outpatient visits annually 1 campus-based long-term care facility with 212 1 campus-based long-term care facility with 212

licensed bedslicensed beds

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Organizational Profile

• TMC Behavioral HealthTMC Behavioral Health 1,712 inpatient admissions 1,712 inpatient admissions 149,352 outpatient visits149,352 outpatient visits

• Truman Care Home Health ServicesTruman Care Home Health Services

• Staff/physicians Staff/physicians 3,727 employees3,727 employees 448 medical staff- employees and contracted 448 medical staff- employees and contracted 321 medical/dental residents321 medical/dental residents

TMC Innovation Process (TIP)(TIP)

Lean Six Sigma Strategic Deployment

Vision

Mission

Values

Strategy

Lean6 Sigma

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A Multi-faceted Transformation

Clinical CareClinical Care ImprovementImprovement

Operational Operational Performance Performance ImprovementImprovement

Strategy Strategy DevelopmentDevelopment

Leadership Leadership Systems and Systems and

CultureCulture

Organizational Transformation

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Organizational Philosophy

TTMCMCIInnovationnnovation

PProcessrocessTIP represents a change in the way we

improve and manage complex processes.

TIP provides the catalyst for CULTURE CHANGE in our organization.

TIP encompasses not only how we work but what we do to improve the patient’s experience.

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The Leadership Challenge

Creating a top-level strategic framework for implementing and sustaining business improvement efforts

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Administrative(Easy)

Basic Management(Re-Focus)

Enterprise Change(Difficult)

Results“Long term success is

More than simply training”

TrainingTrainersToolsMaterialsEvaluation

DeploymentProjectsMetricsReviewExpansion

IntegrationStrategyGoalsCulturePerformance

Year 1 Year 2 Year 3

Full Integration Drives Results: At Kick-off

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Full Integration Drives Results: Current Plan

Administrative(Easy)

Basic Management(Re-Focus)

Enterprise Change(Difficult)

Results

“Long term success isMore than simply training”

TrainingTrainersToolsMaterialsEvaluation

DeploymentProjectsMetricsReviewExpansion

IntegrationStrategyGoalsCulturePerformance

Year 1 Years 2-3

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3. People

1. Processes 2. Tools

4. Governance

TIP: Setting up the Infrastructure

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Processes

• Strategic Planning: Identification of high level strategic initiatives

• Corporate-wide strategic initiative prioritization and selection

• Resource Allocation Process• Project Portfolio Selection• Project Scoping Stage• Project Approval Process• Financial Certification Process• Project Closure Process• Post-implementation Process

Project Closure Process

Meeting with MBB

Meeting with VP COEFOE &

ES

Presentation to BAC

Required Items:- Project Control Plan- Financials- Supporting Documentation

OK to Proceed?

YES

OK to Proceed?

YES

Complete Required Actions

as Outlined by MBB

NO

Complete Required Actions as Outlined by VP

COEFOE/ES

NO

Required Items:- Project Control Plan- Financials/KPIs- Supporting Documentation- If approved to close, ES will sign off on project at this point

Required Items:- Presentation to BAC – 20 minutes w/ 10 minutes for Q&A- Presentation to include (use of key team members to present is recommended):

+ 1 slide - High Level 4 Blocker (will detail the CBI, KPIs, etc.)+ 1- 2 slides – KPI Report Out (use charts, etc. to show improvements made to the KPIs)+ 1 – 2 slides P&L overview+ 1 – 2 slides Control Plan+ 1 – 2 slides on Highlights from the project and Key Learnings

- Support documentation- Project Binder – just so that the BAC sees all of the work that went into the project.- Celebration Breakfast (include key members of the project team)

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Tools

• Strategic Domains (Business Drivers)

• Strategic Roadmap • Capacity Planning

– Time tracking and capacity planning template

• Project Scoring Template• Project Scoping Template• Financial Certification:

Project Profit and Loss Statement

• Project Control Plans / Internal Audit

0%10%20%30%40%50%60%70%80%90%

100%

Jan Mar May July September November

Months

Shelly PhinneyContact TMC!Migration

EDThroughput

Coding

POSCollections

Referrals

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TIP Project Cost/Benefit Analysis

Concept Projected Impact

Actual Impact to Date

Benefits

Total Revenue Growth

Total Expense Reduction

Total Benefits

Project Expenses

Total One-Time Expenses

Total On-going Expenses

Total Project Expenses

Gross MarginGross Margin

Total Cost Avoidance

Gross Margin Impact Gross Margin Impact with Blue Dollarswith Blue Dollars

Tools (Cont.)

Fix Minimize StandardizeMeasure &

Monitor Communicate Audit

Technical 5-S 5-S Standard Work Control Chart/SPC Visual Control Visual Control

Poka-yoke Visual control 5-S Visual Control Training Supplier Audits

Mistake proofing Variable control Training Process Specs Supplier SpecsFinancial Monitoring

Training Celluarization Checklists Metric Board Metric Board Operational audits

AutomateProcess Control Standard (PCS)

Handouts and Flyers

Repair/replace

Software SOP's

Physical controlsProcess Control Standard (PCS)

Variable elimination

Behavioral Feedback Flow Production Repetition Rewards Rewards Rewards

Job Improvement Bonuses Standard work Feedback Feedback Feedback

Standard training Accountability Walk the Talk Be present

Task certificationCommunication boards

Best practicesExplain the change

Organizational Work RulesLead time reduction

Training Education MBO's Regular

Clearly defined roles and responsibilites

Inventory Education Training Education Education

Follow the $$$$$ WasteProcess change policy

TS Guide Commitment

Pay for skills AccountabiityFormal periodic reviews

Expectations

Directed awards

Speak the "language"

Sources of Variation:

Control Methods

Types of Control

Man, Material, Mother Nature, Methods, Measurement, Maintinance, Machine

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People

Leadership/Executive Sponsors

Master Black Belt

Black Belt Green Belt

L6S ProjectTeam Members

Process Owners/Team Leaders

L6σ Projects: Key Stakeholders

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C.N.O.

C.I.O.

C.F.O.

C.M.O.

C.O.O.Lakewood

C.O.O.Hospital

Hill

CenterOf

Excellence

L6σ Deployment Structure

People (Cont.)

1 Master Black Belt8 Black Belts

15+ Green Belts

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Governance The Business Advisory Council (“BAC”)

• Made up of “C” level Executives• Drives Strategic direction• Focuses on high-impact change targets• Conducts on-going rigorous reviews• Prioritizes initiatives at the enterprise level• Sponsors initiatives as a Team• Solicits Opportunities for Improvement• Communicates TMC’s Continuous Improvement Philosophy• Establishes / Secures Support & Involvement for

Continuous Improvement• Drives toward execution of timelines• Ensures Sharing of Best Practices

Project Selection and Prioritization at TMC

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TIP Program Launch: Alignment to Strategic Domains

• Umbrella Concept: Total Customer Experience

• TMC 2005-2006 Strategic Domains (The Y’s):– Patient Flow– Patient Safety– Capacity Improvement (Bed Capacity, Provider availability)– Revenue Cycle– Workflow Optimization– Supply Chain

• Leadership Development Opportunities• Charter specific projects in each domain

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Focus on the “Big Y’s”

Source: Motorola University Six Sigma Training

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Linking Projects, Process and Results through an integrated process

Business Advisory Council representing key functions

Develop and deploy a Business Balanced Scorecard Process

Goal:Align Six Sigma initiatives to business strategies using the Scorecard Process as a framework, create relevant, “Line of Sight” improvement targets, stretch goals and appropriate measures.

Source: Motorola University Six Sigma Training

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Business Strategy Focused Project Selection

Voice of Customer

“Plan the Business”

“Plan the Business”

“Run the Business”“Run the Business”

Strategic Plan

PROJECT RESULTS

Tools & Methodology

Pro

cess

Sco

reca

rd

Project Selection(Prioritization Criteria)

BusinessObjectives

Business Measures

CEO Scorecard

Business UnitScorecard

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Implementing our Strategy

Position

TMC for

long term

success

Quality / Safety

Operational Excellence

People Focus

• Comply with National Patient Safety Goals

• Reduce agency cost and overtime

• Build Management Talent

Goal Strategic Priorities

Tactics/Initiatives (examples)

….. …..

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>

<

>

<

Mandated(CEO, Legal/Regulatory/

Compliance, …)

ProjectSelection

(TMC-wide)

Project Submissionby Functional Area

(MBB’s aligned)

Non-Mandated

Project Funnel …

Projects Selected

ResourcesAllocated

ResourcesAllocated

Project ScoringFinancials Risk

25% 25% 15% 0% 20% 15%

ROIQuality of Care / Patient Safety

Operational Excellence

RegulatoryCustomer Intimacy

Complexity, Resource

Availability, Scope/Timing, …

0.1 = Low 0.5 = Medium

1.0 = High

0.1 = Low 0.5 = Medium 1.0 =

High

0.1 = Low 0.5 = Medium 1.0

= High Yes / No

0.1 = Low 0.5 = Medium

1.0 = High

- 0.1 = Low- 0.5 = Medium

- 1.0 = High

Strategic

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Inter- and Intra-Prioritization

Inter-Prioritization:• Project Selection

across the organization

• Investment decisions and resource allocation

• Competing priorities – scoring model (multi-criteria: financials, strategic fit, project risk)

Intra-Prioritization:• Prioritization within a

Program or Project• Identification of quick-

wins• Action item selection

based on: – Effort level– Return on investment– Frees up resources– Timing, …

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Black Belt Training Projects

Assigned by Leadership based on alignment to strategic domains– 3 were Clinical in Nature:

• Bed Availability• Agency Reduction• Use of Constant Observation

– 3 focused on Revenue Cycle:• Coding• Reduce DNFB (Discharged but not final billed) • Collections

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Early Benefits of Lean Six Sigma at TMC

• Monthly agency staffing costs reduced by 50%• Monthly constant observation costs reduced by 68.4%• Discharge time reduced by 79.7%• Reduced cycle time in the Financial Counseling Center (FCC) for interviewing inpatients by 50%

CASE STUDY:Revenue Cycle End-to-End

Program -Genesis & Deployment

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Revenue Cycle Training Projects: Lessons Learned

• Too large in Scope

• Ambiguous parameters and undefined goals

• Data- Difficult to locate / understand

• Complex and disparate systems

• Long learning curve and a Long Road!

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Revenue Cycle Training Projects: Examples of Achievements

• Decreased number of denials for specific service areas by 71%

• Eliminated NVA database in the FCC

• Reduced DNFB by 20.3%

• Reduced average A/R aging by 9.9%

• Increased Revenue Capture and Collection in LDRP

• CDM reviewed/revised in LDRP

• Served as catalyst for future “Revenue Cycle” initiatives throughout the organization

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Revenue Cycle End-to-End: Project Selection and Prioritization

Top-Down: • Genesis of this initiative: the Revenue Cycle

Training Projects (alignment to strategic domains)Bottom-Up:• Identification of “Gaps” in the Value Stream • Program-level brainstorming session (TIP Team and

SME’s)• High level Project Scoping (Concept level)• KPI’s / Data Analysis• End-to-End Process Flow• Grouped common ideas into themes

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Revenue Cycle End-to-End

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Then we…

• Had Revenue Cycle SME’s group and rank projects

• Created an over-all Program Scoping document, which included a well-defined critical business issue and key performance indicators

• Created a Program “Road Map” comprising seven Projects

• Received Business Advisory Council (BAC) endorsement to proceed

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Revenue Cycle Program “Road Map”

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– Identified project inter-dependencies– Identified list of resources– Prioritized Projects based on:

Level of effort Economic return Quick wins versus long-term gains Corporate-wide reach Resource availability

– Received Direction and Support from BAC – Kicked off projects!!!!

Lastly we…

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Donald M. Berwick, MD, MPP, FRCPPresident and Chief Executive Officer

Institute for Healthcare Improvement (IHI),

“If you get it right 90 percent of the time, that’s terrific. Well, if my car starts nine

out of ten times, or if I have nine out of ten parts correct on my TV, that’s not terrific. That’s broken. We have to raise the bar in

terms of expectations about what excellence really is. If you are not

approaching perfection, you are not providing adequate care……. I think this idea of raising the bar on the standard of

care needs to become prevalent. Healthcare organizations should become

impatient with themselves about their performance.”

Thank You!Q&A