Driving Quality Performance - Chi Solutions, Inc. · Driving Quality Performance Quality Symposium...

©2006 Chi Solutions, Inc. Proprietary and Confidential.

Driving Quality PerformanceQuality Symposium September 27, 2006

Earl Buck

2 ©2006 Chi Solutions, Inc. Proprietary and Confidential.M:PROJECTS/13000/REPORTS/FINALREPORTEXECSUMMARYUPDATE062206.PPT

Leaders of Quality – A SampleBusiness

Lord KelvinW. Edwards DemingJoseph JuranPhilip CrosbyMalcolm BaldridgeTaiichi OhnoJim WomackMikel Harry

Health CareJames WestgardGeorge LundbergJohn Bernard HenryRay GambinoBrent JamesMichael LaposataDennis O’Leary


“Quality” definedQuality is “a state in which the customer and

provider realize value entitlement in every aspectof the business relationship” Mikel Harry, PhD

CustomerNeed P

ProviderService

ValueExchange

Cost

Defects

Time

Price

Quality

Delivery

Product

Service

Capacity

Capability

“We are not in the business of quality,we are focused on the quality of our business”

Creation of VALUE is key


System of Management – Organizational View

Reference: In part from Mikel Harry, Ph.D.

Individuals People Metrics Knowledge, Skills, Commitment, Roles

Efficacy Metrics CTVs, Customer Satisfaction, Yield, On-timeOperations

Financial Metrics Growth, Profit, Market ShareBusiness

Capability Metrics S.D., DPMO, CTQs, Tolerance, VariationProcesses

• “systems approach” requires labs to look beyond our four walls• requires us to consider more than technology, science, analysis• can’t separate quality from financial performance• satisfied people satisfied customers satisfied owners complete value stream


Value =(Quality) (Service)(Financial Benefit) X (People)

Clinical Quality andBusiness Excellence Customer Service

Expense PerformanceRevenue PerformanceMargin ManagementCapital Generation

Work Culture

Internal Focus Customer Focus

Value Focus

Learning and Growth Focus

Value Proposition - Clinical Laboratory ServicesBalanced Scorecard becomes the tool to manage “value”


Total Testing Process – Our historical focus

What Test to Order

OrderIdentify Patient/SampleCollect SpecimenAccession SpecimenTransport Specimen

Prepare SpecimenAnalyze

Release ResultTransmit Result

Interpret Result

Pre-pre-analytic

Pre-Analytic

Analytic

Post-Analytic

Post-post-analytic

Where defects occur?

32-75 %

4-32 %

9-55 %

?Ref: “Patient Safety Hits the Laboratory Industry: Early Findings from the CDC”, Ana K Stankovic, MD, PhD


Quality Focus – Must go beyond walls of lab

“What do I need to maintain my health, diagnose my

illness, or help me get better?”

PATIENT

“What do all these tests mean and why won’t

anyone tell me?”

Post-post-analytic“What do the results

mean?”

Pre-pre-analytic“What to order?”

Pre-analytic Analytic Post-analytic

WITHIN LAB

PROVIDER

Customer?

Payor


Is Quality Really An Issue?In its “The State of Health Care Quality 2005”, the National Committee

for Quality Assurance says“Good news….quality of health care for many Americans

continued to improve in 2004….the improvements of the past decade.…have saved thousands of lives and billions of dollars”

“Bad news….this positive trend ….seriously threatened….workers shifted to new health plans that don’t measure/report on quality….widespread, unexplained variation in clinical practice is contributing to critical ‘quality gaps’….consumers do not have access to the kind of objective information they need to make informed decisions about their care”

Quality GapAvoidable deaths 39-83K/year & avoidable medical cost $2.8-$4.2BSuboptimal care 83.1M sick days & $13.5B lost productivityMajority of Americans still rely on family/friends to determine quality of providers, hospitals, health plans

Artor

Science?


What do other quality groups say?IOM – Institute of Medicine

“Advisor to the nation to improve health”Much work related to health care quality & patient safetyRecent reports or projects

Medication errors, Emergency care, Traumatic brain injury, Childhood obesity, Cancer, Breast Imaging, etc.Adolescent health, Human oocyte donation for stem cell research, medication errors, etc.Nothing focused on clinical laboratory

The only report specific to lab is “Medicare Laboratory Payment Policy: Now and in the Future” published in 2000Does the lack of attention to lab mean there is no perceived problem with lab quality or does it mean we’re not visible/valued enough to be an important focus?


Where does the lab fit into this picture?70-85% of all healthcare intervention requires laboratory data or information assess, diagnose, monitor status or healthcare or susceptibility to specific disease

60-65% of clinical data repositories information is comprised of clinical and anatomic pathology data

Pharmacy and laboratory generate the highest number of transactions within healthcare – tremendous focus on pharmacy error today, only incident specific focus on lab industry

Laboratory is mission critical to healthcare, but not viewed that way by our colleagues or the public, and not valued that way

Change is coming…. “recognizing the critical importance of laboratory services, the Joint Commission has designated the laboratory as an ‘essential’ hospital service. This designation has elevated theimportance of the laboratory’s compliance status in determining the overall accreditation status of the hospital”


What about lab quality?Inside the laboratory industry, we’ve become more sophisticated in our quality methods and statistical tools, but still lag behind other industries in our failure ratesPublic events create intense focus followed by government intervention (CLIA88, Corporate Integrity Agreements-90’s, GAO Report 2006)“Hospitals move to cut dangerous lab errors”,

Wall Street Journal, June 20, 2006, Laura LandroGAO Report oversight weaknesses undermine federal standards


JCAHO Comments on Lab Quality“Many clinical diagnoses and most patient clinical management arebased on the results of laboratory tests, yet attention to the level of quality in hospital laboratories is often eclipsed by other quality concerns within the larger organization”

“Organizational leaders…adopt a ‘systems approach’….based on engineering and quality control principles”

“Requires retrospective…..and prospective….analyses to identify and eliminate risks….in processes….before adverse events can occur”

“Safety-focused learning environment…only develops when the organization’s managerial and clinical leaders work collaboratively and deliberatively to create it”

“personnel standards currently required by CLIA are insufficient to adequately protect patients and the public health”

Testimony of Dennis O’Leary, M.D., President, JCAHO before Congress, June 27, 2006


Quality Improvement Opportunity

Do we think there is opportunityto improve on quality in the laboratory industry?

Is there any doubt!!

“The only way to eat an elephant

is one bite at a time”

But … are we making sufficient progress, or do we need a profound intervention to create a quality breakthrough?

00.10.20.30.40.50.60.70.80.9

1

What future action do we take?


Keys to Success: Quality ImprovementRequirements to create quality breakthrough:

1. Driving Need2. Executive Leadership3. Breakthrough Goals4. Defined Resources5. Functional Infrastructure6. Support Systems7. Organizational Will8. Improvement Events9. Capable People10. Compelling Big Ideas11. Implementation Focus12. Operational Freedom

Mikel Harry, PhD


First, “breakthrough” specificsPerformance Improvement – next generation

Real-time information and management reports

People – new skills and responsibilities

Patient outcomes – the need to know the ultimate value we bring to our customers

Balanced Scorecard – a tool to drive the breakthrough strategy

Industry accountability for making necessary improvements


Performance ImprovementAdopt third generation Six Sigma

1st generation = defect reduction2nd generation = cost reduction3rd generation = value creation (incorporates LEAN)

Use LEAN to improve single process elements or work cells via repeated Kaizen events

Use Six Sigma to attack the more complex process issues

Must commit the $$ upfront to get the ROI


LEANCreated by Ohno @ ToyotaFocus is defining value and eliminating both

waste (“muda”) and expenseKaizen event = understand current state, define

future state, improve the processMost times create the performance metric during

this process and monitor improvement after the event over timeRepeat, repeat, repeat – a single Kaizen event will

not improve your laboratory operation significantly


Six Sigma Credo

We don’t know what we don’t knowWe can’t act on what we don’t knowWe won’t know until we measureWe don’t measure what we don’t valueWe don’t value what we don’t measure

-------------------------------------------------------------------Focused on value creation, but heavily dependent on statistical analysisIntent is to reduce variation


Cost of Quality based on performanceThe cost of “quality” activities in any organization inrelation to the prevalence of defects is:

• 3σ = 25-40% of revenue• 4σ = 15-25% of revenue• 5σ = 5-15% of revenue• 6σ = < 1% of revenue

Mikel Harry, PhD

“Methods that provide 6 Sigma performance can be easilymonitored with only 1 or 2 control measurements, whereas methods with 5 Sigma performance require 2 or 3 control measures and methods having 4 Sigma performancerequire 4 or more control measurements”

http://www.westgard.com/essay72.htm

Lab Industry Today?


Move toward “real-time” managementRetrospective management allows too much

opportunity for undetected failure

IT capability today can support the need for data and information feedback quickly

LEAN/Six Sigma requires data

On-line analytic processing (OLAP) cube is Six Sigma tool

Here is an example of a tool that works


MAST - Improving Laboratory Operations Through Reporting

DashboardsService TAT

Sales ProductionManagement

Send-outs

Utilization AM TATModify Behavior

“Management Accountability, Staffing & Service Tracker”


PeopleNew skill sets and expertise are needed in the lab of the future

LEAN/Six Sigma – must educate staff across all levelsMedical Technologist Clinician – working with providers and patients to improve the value of outcome to patientsClinical Laboratory Quality Manager – now a graduate program

Needs a team of dedicated staff and leadershipAutomation Operation and ManagementDatabase management and mining – real-time needs and outcomes

research

A renewed focus on personal accountability is required for work within the lab and work within healthcare

People are the most important asset we have


Patient Outcomes & Lab Services“You don’t know if you’ve created a best practice in your laboratory until you connect that practice with patient outcome”

Lee Hilborne, M.D., Ph.D.

“So who cares about the impact of laboratory testing on patient outcomes? I think patients care….want to get good care….what to pay a reasonable price for it”

David Wilkinson, M.D., Ph.D.

“The Impact of Laboratory Practice on Patient Outcomes”, 1995 Institute: Frontiers in Laboratory Practice Research, David Wilkinson, MD, PhD“Using patient outcomes to screen for clinical laboratory errors”, Winkelman JW & Mennemeyer MA, Clinical Laboratory Management Review, 1996 Mar-AprPatient Safety is one focus of outcomes and a growing body of

knowledge within the lab industry


Balanced ScoreCard - “Cause & Effect”

ProcessCycle Time

EmployeeSkills

CustomerLoyalty

ProcessQuality

ROCE

On-timeDelivery

Financial

Customer

IInternal/Business Process“Quality”

Learning & Growth“People”

ref: Kaplan & Norton


Balanced Scorecard impact on Value Creation

Quality Customer

PeopleFinance

Value Proposition – we must grow this space

Balanced Scorecard forces us to focus on more than finances!

Can “Quality” be astand-alone attribute?


Lab Industry Led BreakthroughAs an industry, we agree there is opportunity for

improvement

Forces outside the industry do not seem focused on the broad need for improvement – other than the government on an interim basis

We have struggled to collaborate within the industry (although we are making progress), so how do we learn to speak with common purpose?

IQLM or some other way?


IQLMInstitute for Quality in Laboratory Medicine

AgendaCreate an independent public-private partnership that speaks broadly for laboratory medicineDemonstrate laboratory’s role in systematic improvements in health carePromote evidence-based laboratory practices that lead to improvements in quality, effectiveness and safetyProvide a forum for collaboration for laboratory and clinical partners in health careSupport research in design and delivery of effective laboratory services

From Presentation at CLMA ThinkLab 06


Keys to Success: Quality ImprovementRequirements to create quality breakthrough:

1. Driving Need2. Executive Leadership3. Breakthrough Goals4. Defined Resources5. Functional Infrastructure6. Support Systems7. Organizational Will8. Improvement Events9. Capable People10. Compelling Big Ideas11. Implementation Focus12. Operational Freedom

Mikel Harry, PhD


Driving Quality Improvement1 - Driving Need

Healthcare quality in the U.S. needs improvementLaboratory industry performance does not equal performance of many in the manufacturing industryWe want to perform better

2 - Executive LeadershipExecutives/leaders can make significant progress in the current healthcare environment

3 - Breakthrough GoalsImprove the performance of the lab industry by 1.5 Sigma in the next 10 yearsImprove your lab organizations performance by 2.0 Sigma in the next 10 years


Driving Quality Improvement4 - Defined Resources5 - Functional Infrastructure6 - Support Systems

--------------------------------------------------------------Must demonstrate early successes with LEAN to show ROI to justify additional resourcesMust change thinking about IT resources to move toward real-time feedback and management reportsMust commit to allowing personnel to focus on improving quality – it cannot be a management program onlyMust spend $$ on needs that may not be considered lab focused today


Driving Quality Improvement7 - Organizational Will9 - Capable People12 - Operational Freedom

----------------------------------------------------------------Leadership must champion the cause and enhance the underlying organizational will to seek the highest level of improvementTrain new experts needed to support this even if there is a staffing issueEmpower those who know the processes best and provide them the time and support to make improvements


Driving Quality Improvement8 - Improvement Events10 - Compelling Big Ideas11 - Implementation Focus

-----------------------------------------------------------------Goal = be the best, exceed patient expectations, know how you impact patient outcomesFocus on expanding your quality tool kit, bring LEAN/Six Sigma to bear, learn from other industries if necessaryDo one improvement exercise, then repeat on a continuing basisQuality improvement becomes the number one goal for your organization and drives all else


Application of Breakthrough Strategies

The four case studies being presented this afternoon willdemonstrate how leaders in our industry have appliedstrategies that are creating breakthrough impact fortheir organization………………

Thank you!

[email protected]

Driving Quality Performance - Chi Solutions, Inc. · Driving Quality Performance Quality Symposium...

Documents

Transcript of Driving Quality Performance - Chi Solutions, Inc. · Driving Quality Performance Quality Symposium...