Establishing the Need for Cost Savings and Lean...
Transcript of Establishing the Need for Cost Savings and Lean...
I. The world we knew 2000-2010…� Success under the “Old Paradigm”� The need for change and revelations of this
“New Paradigm” � Some Translations for those working in both
Establishing the Need for Cost Savings and Lean Processes:
� Some Translations for those working in both worlds
II. A brief story about finding a change mgmt methodology and stumbling into LEAN
1. Volume, full beds, growth in key units of service (especially high tech and high net $/click) are all good things to pursue
2. Happy & involved physicians create momentum
3. Never quite enough capital for all the new toys & the brick and mortar we need since they toodefine future success
4. Investing in clinical quality and service just makes sense
5. Margin targets of 3-4% should be attainable
6. Inflation of 3-4% in labor & supply expense is our nemesis and those Purchased Services can be volatile
7. We’ve done about all we can with labor efficiencies by simply reducing FTEs; we have to work smarter
Features:
1. Fee-for-service reimbursement rewards volume of services; high occupancy, hospital admissions, specialized (high tech) services for in- & out-pts
2. Siloed provision of services; independence of hospitals, physicians and others in the care continuum (SNF, Nursing Homes, Home Health)continuum (SNF, Nursing Homes, Home Health)
3. Transparency has arrived! Quality outcomes and service scores are readily available to the public, so focus in these areas is critical
4. Financial solvency requires all providers to understand and make efforts to limit provision of uninsured services (within the boundaries set by their unique organizational mission).
2009 Data from 30 Industrialized
Nations
But is it really sustainable?
Yes… the top Magenta colored line
is the U.S.
1. Stronger Primary Care and Care Coordination through Medical Homes and ACOs … plus fewer “under- and uninsured” patients
2. Better access to Community Health Centers for low-income patients3. Improved efficiency through health information technology (EHR
and Health Information Exchanges)4. “Proper” alignment of incentives to promote defined quality
TEN WAYS OUR HEALTH SYSTEM IS EXPECTED TO CHANGE UNDER THE “AFFORDABLE CARE ACT”
outcomes5. More support and information during hospital discharges6. Fewer hospital-acquired infections7. Additional information available re: quality of MDs, hospitals,
nursing homes, health plans8. Increased choice of insurance plans, including non-profit plans9. Rewards for private insurance plans that provide high quality care10.Lower Health Insurance premiums (compared to the trajectory
otherwise)
1. Like it or hate it… label it… wish it away? Save your energy! It’s the new reality!
2. Launched an entirely new era for American healthcare
3. The detail will continue to need to be
The 2010 Affordable Care Act:
3. The detail will continue to need to be defined during this decade, but the race is already in motion
4. The big focus is on the uninsured, EHR, and very new incentives
“New Paradigm” characteristics will have to become second nature:
1. No longer “more care = best care”… now Value-based purchasing and bundled payments will reward quality; reduced hospitalization and readmissions… embrace evidence based care!
2. Accountability for patient outcomes requires 2. Accountability for patient outcomes requires coordination of care across settings and types of providers; hospitals and MDs interdependent
3. Reaching out and serving low-income and uninsured communities is the new market growth
4. Learning to live with less inflation means more attention to standardization and waste removal
Some Translations from all that….
• Patient-centered Medical Homes:
• Capital $ being spent to acquire and/or consolidate medical practices, and on out-pt construction• New designs for those practices… different flow, more attention to match scale (MD #s) with on-site ancillary services, different hours, often very different appointing services, different hours, often very different appointing methodologies for MD visits• FP, IM, and Mid-Level Practitioners are in demand!
• Integrated acute and post-acute care under global fees: • Transitions without “drops” or readmissions• Much greater attention on care coordination (ALOS, sub-acute beds with lower staffing standards, continuum partnerships)
More Translations from all that….
• Leaner & Safer Care• The East Coast and Midwest will learn a lot from the West Coast generally and the NW in particular about care management / average length of stay• All hospitals will focus like never before on standardizing care and knowing why any patient or standardizing care and knowing why any patient or MD deviates from patterns• Attention to Infection Control and avoiding HAI Expect a dress code of short sleeves and no ties!
• Right care instead of More Care… • Do we really need that next wing or tower?• Have we truly optimized the scheduled use?• Is the care delivered as efficiently as it can be?
� Decreased hospital admissions for the same population served = need for allies/partners
� Decreased length of stay for each admission
� No readmissions allowed… without penalty
� Real attention to hand-offs across continuum
� Decreased capital spend on traditional Hospital brick and mortar projects... w/ some exceptions
� Big spending shift to practice acquisitions, re-design of out-pt spaces, EHR, and anything that promotes efficiency and cost reduction
� We are still very much living in the “Old Paradigm” (volume good, high tech good, more care is better…)
� But medical necessity isn’t always clear …
� There are only so many dollars to go around� There are only so many dollars to go around
� We have to resource the “New Paradigm”
� We have to educate ourselves and our partners about the cultural and motivational changes
� We have to embrace the tools/techniques that will sustain us during and after paradigm shift
� A short story about my journey with Sisters of Providence finding a workable Change Mgmt process …workable Change Mgmt process …
� And stumbling into this thing called “LEAN”
CAP Coaches and Work-Out (W0) training for 23 Change
2004
CF (48) CAP Coaches and WO training, GB/BB DMAIC training (9), Master Change Facilitators (MCF) (4) Training, 1st Lean Training at PSPH, & 1st Kaizen Event; Lean for CFs and Belts,
Intensity of Change
High 2005 & On…
Master Black Belt Training (MBB), Lean/Six Sigma for Leaders, CF WO and CAP Training and GB DMAIC Training; Lean Kaizens, Value Stream Mapping and 1st Flow Kaizen at PSPH
Providence Health System Task Force → GE2001
2002 Washington Region Kick-Off of Operational Excellence
2003
CAP Coaches and Work-Out (W0) training for 23 Change Facilitators (CF). Start of Six Sigma projects and DMAIC Training for 5 Green Belts(GB) and 2 Black Belts (BB), Work-Out For Leaders and CAP For Leaders presented to 32 Senior Leaders in Washington Region
Intensity of Change
Time
Low
Root Cause Analysis (RCA) / Failure Mode & Effects Analysis (FMEA)
In the 1990’s we used PDSA / Rapid Cycle for QI and PI work
2000
Defects: Re-sticks, med errors
Overproduction: Blood draws done early to
accommodate lab
Inventories: Patients waiting for bed assignments,
lab samples batched, dictation waiting for
transcription
Movement: Looking for patients, missing meds,
missing charts or equipment
Excessive Processing: Multiple bed moves, re-
testing
Transportation: Moving patients to tests
Waiting: Inpatients waiting in ED, patients waiting
for discharge, physicians waiting for test results
Under-utilization: Physicians transporting patients
Q
Complexity/Scope of Change
Small Large
Work-Out Six SigmaLean(Waste
Medium
Q
A
TechnicalSolution
CulturalAcceptance
ChangeAccelerationProcess
Work-Out(Expert-Driven)
Leader Decides
(Reduce Variation)
Six Sigma(Waste
Elimination)
ReevaluateReevaluate
RecallRecall
RedesignRedesign
RedoRedo
RepeatRepeat
RemakeRemake
RemeasureRemeasure
RedesignRedesign
RetestRetest
RetypeRetype
RepeatRepeat
ReissueReissue
RejectReject
ReworkReworkRecheckRecheck
ReviseRevise
ReturnReturn
ReshipReship
Goal is to eliminate sources of waste
1. Waste Elimination = Efficiency
2. Value Stream Mapping = See the entire process, not islands
3. 5 S’s = The building blocks of Lean
4. Material Presentation = Eliminate the need to search
5. 7 Flows of Production = Process synchronization
6. Level Loading = Smooth out production
7. Standard Work = Cycle time control
Some Tools In The Lean ToolkitSome Tools In The Lean Toolkit
7. Standard Work = Cycle time control
8. TAKT Time = Level output
9. Stop at Abnormalities = Machines shut down to prevent waste
10. Pull Production = Inventory control
11. Kan Ban = Visual signal to do something
12. Continuous Flow = Work done as unit moves down the line
13. 3 P’s: Production, Prep = New process development
& Process
� Represents the entire continuum of the patient or product’s experience (in case of Supply Chain) from start to finish
� Documents people, information and material � Documents people, information and material flows
� Identifies pain points (bottlenecks)
� Determines which OE tools are best suited to improve the segments of process flow and patient experience
GE Performance Solutions – Customer Kaizen Summary Sheet
Project Participation
• Number of Participants = 12
• PA participation = 8
• GE participation = 2
• Number of Teams = 2
• Team Leader = Bharat Monteiro
• Consultant = N/A
Project Participation
• Number of Participants = 12
• PA participation = 8
• GE participation = 2
• Number of Teams = 2
• Team Leader = Bharat Monteiro
• Consultant = N/A
Date: 10 –25-04 Customer: Site:
Before After
“So…Can you give us a proposal for an
organization-wide deployment of Lean?
- St. Peter Hospital COO
After
Value Improvement Process
GE Performance Solutions Kaizen Template Rev. 0, June 9, 200412
Kaizen Impact Summary
Date:Kaizen # 01-2004 10/25/2004
IMPACT
1:Safer Work
Environment
2:(1800) Sq. Ft.
-25.74%
3: 67% increase
All 17 items closed
AFTER
St. Peter Hospital - Supply Distribution
Reduction in Sq. FootageDescription:
15.4 mins. per unit
(10 boxes)
9.2 mins. per unit
(10 boxes)
17 opportunities for
resolution
BEFORE
6994 Sq. Ft. 5184 Sq.Ft.
L E A NE N T E R P R I S EL E A NL E A N
E N T E R P R I S E
GE Performance Solutions
Sq. Footage
Safety, Health & Regulatory
Throughput
� Once a Value Stream is mapped …
� A portion of the Value Stream might be targeted for 3-5 day “point Kaizen” event with front-line staff
� Improvements are made then and there!
� Kaizen events have specific measurable � Kaizen events have specific measurable objectives (usually 1 main and several other supplemental objectives)
� Resolve safety issues
� Reduce wait times
� Improve throughput
� Increase efficiency
� Reduce space used by / for that function
Day One: Leader’s Meeting.
Battle of the Best Kaizen: Thomas Risse vs Jim Leonard. “My Kaizen is better than your Kaizen.”
Loading Dock/Receiving
Linen
Kaizen Impact – Supply Chain
Warehouse
EquipmentStorage
Distribution/Clean Supply
PSPH Lower Level Floor Plan
. . . Any process or value stream
After
Before
Wait / Waste . . .
Work . . . Value Add Time
Lead Time / Cycle Time
• Reduced cycles• Better delivery• More capacity• Better quality
Improved customersatisfaction
Increased process velocity, reducedwaste, improved customer experience
AfterWait / Waste . . .
Non Value Add Time
Lean attacks waste here
• Better quality• Productivity
� Operating Room Turn Around Time� Reduced “Patient Ready” time by 21%� Reduced clinician travel distance by 54%� Reduction in lead time for surgical materials requests from 10 days to 4 days
� 90% reduction in cycle time to stock surgical case cart
� Internal Supply Distribution Cycle Time� Reduced space utilized by 26%� Improved throughput from Dock � Distribution by 67%� Improved throughput from Dock � Distribution by 67%� Identified and resolved 17 Safety and DOH violations
� Central Sterile Processing Cycle Time� Reduced travel distance for picking case carts by 80%� Eliminated need to restock 57,000 CSP items
� Medical records� Reduced total processing time by 4012 hrs. / year (70%)� Reduced file clerk travel distance 2344 miles/ year (82.5%)� Identified and resolved 12 safety issues
� Emergency Room� Reduced 96% in ED caregiver travel� Reclaimed 107 sq. ft. in the ED
“Discovery consists in seeing what everyone else has seen, and
thinking what no one thinking what no one else has thought.”