Lean Six Sigma Strategic Deployment: An Art or a Science?
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Transcript of Lean Six Sigma Strategic Deployment: An Art or a Science?
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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
32
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