How lessons learned in manufacturing help healthcare organizations trim the fat.
Once in a while, the signposts we should follow are far away from the well-trodden path. And sometimes, inspiration comes not from our own business, but from someone else’s. Such is the case with the application of Lean management and Six Sigma in healthcare organizations.
Lean management seeks to identify wasteful practices, reduce costs, and increase process speed. A separate but complementary methodology, Six Sigma, uses a data-driven approach to eliminate defects and variations with focus on the customer experience. These philosophies were not born of health care and were not generally adopted by healthcare organizations until the past decade. The Institute for Healthcare Improvement was the first to produce a white paper on Going Lean in Health Care in 2005. Health care’s first provider-sponsored projects were conducted at SSM Health and Intermountain Health about 10 years ago.
Both Lean management and Six Sigma methodologies come from the world of manufacturing; specifically, from the manufacturing of cars. Healthcare revenue departments and finance teams can effectively apply both techniques to improve quality, reduce costs, and spur improvements in patient satisfaction.
The Skinny
While the goal of lean management is to drive out waste, Six Sigma keeps organizations in check by focusing on customers, working to eliminate defects and variations in processes and results. Originally two different methodologies, Lean and Six Sigma were rivals until it was discovered they work better together than apart. Then they were combined to form Lean Six Sigma.
“Little things are important,” says Brian Unell, vice president, revenue cycle at Piedmont Healthcare in Atlanta. “Sometimes it can feel like there is no owner of the process or that the rules are unclear. Lean is set up to address small, specific items. People see they can make a difference, and it inspires them.”
For example, one area that can be improved with Lean Six Sigma is the unauthorized disclosure of patients’ health information. Information is inadvertently sent to wrong addresses through human mistakes, medical record errors, or data-entry snafus. Unauthorized patient information disclosures commonly occur when medical record information requests are fulfilled.
Through Lean Six Sigma, hospitals can define unauthorized disclosures as customers would see them—patient information breaches, no matter how small. Even though these errors are only one piece of the health information puzzle, they represent consequences for individual patients. Every mistake, no matter how small, impacts a person.
Lean Six Sigma in Auditor Requests for Medical Records
Hospitals receive thousands of medical record requests every quarter from health plans, payers, and auditors. According to the American Hospital Association’s first quarter 2016 RAC Trac report, an average of 2,176 medical records per hospital were requested by RAC auditors in Region A during the fourth quarter of 2015. With so many requests for information, human error enters the equation.
Lean management and Six Sigma can reduce occurrences of unauthorized disclosures to auditors and other requestors by encouraging hospitals and health systems to first look at all factors related to disclosures and then optimize internal quality assurance processes.
In addition, hospitals should analyze Lean Six Sigma data and make decisions based on that data, with the end goal of reducing errors and increasing customer satisfaction. The best way for hospitals to avoid making wrong moves (e.g., laying off staff to eliminate cost without conducting analysis beforehand) is to follow Lean Six Sigma recommendations and make decisions based on what the data reveals by staff member, type of information request, requestor/auditor, and delivery method. For example, the data could reveal huge variation in productivity across staff members. Reducing the variation will improve the productivity average as a whole, avoiding the need to lay off staff.
Lean Six Sigma is not just about reducing labor costs and staff; it is about improving processes to mitigate the risk of future errors and support patient satisfaction through more consistent, standardized outcomes.
Case Study: Lean Management in Revenue Cycle Processing
Another important aspect of Lean management is velocity. Lean management measures process velocity—how responsive particular processes are to customer demands. For example, a long lead time, or the amount of time spent from scheduling a patient service until those services are delivered, results in slow velocity. “In health care, people perform according to how their specific processes are designed, but there may be errors in these processes,” Unell says. “Errors are caused by bad processes, not bad people.”
Piedmont Healthcare began a quality process improvement program two years ago. The program targeted vice presidents, executive directors, and directors to participate in the Six Sigma Black Belt Program, which runs over six-month periods and includes eight to 10 days of education, examining stats, tools, and background. Attendees learn about the seven types of waste—transport, inventory, motion, waiting, overproduction, overprocessing, and defects—along with project management tools, Myers Briggs personality types, negotiation, simulations, queuing theory, batch versus real-time processing, and identifying bottlenecks. Participants are required to execute and present projects at graduation ceremonies, which are regularly attended by Piedmont’s CEO. These projects have realized millions of dollars in savings.
Unell was part of the inaugural Black Belt class and helped pilot a Green Belt Program, which is designed for middle management and staff members. Green Belt projects focus on one or more of the seven types of waste.
Unell’s team focused on Black Belt and Green Belt revenue cycle improvement initiatives.
“It was very helpful,” Unell says. “One Green Belt project focusing on improving the experience for oncology infusion patients found that a step in the same revenue cycle process was repeated three times—once at the [non-employed] MD office, a second time in our consolidated pre-registration environment, and a third time in the department.” The team found this using a Lean Six Sigma concept called “going to the gemba”—a Japanese term for “real place.” This is typically the most valuable and informative part of each project.
“Using sticky notes to identify each step in the process, the notes originally took 20 feet of space,” Unell says. Through this technique, the team conducted a root-cause analysis to identify duplicate efforts within the revenue cycle process. “We trimmed the sticky notes listing from 20 feet to 8 feet, reducing the process by 60 percent.”
A similar effort was launched for therapies and treatments provided by Piedmont Healthcare for the neighboring Shepherd Center. Atlanta’s Shepherd Center, one of the nation’s top rehabilitation hospitals for spinal cord and brain injury, is attached to Piedmont’s main campus. As such, many Shepherd patients are brought to Piedmont for diagnostic tests and surgical procedures. Billing between the two entities was complicated and duplicative.
After completing the gemba process, time spent by Piedmont staff on processing the Shepherd patients’ bills dropped from 20 hours a week to six. A Green Belt Program for inpatient admission notification also has been implemented. The goal is to improve compliance by 10 percent.
“Our executive director of preservice currently has a Black Belt project to reduce the number of calls to one of our major referrers,” Unell says. “While it is still underway, initial results show a 40 percent reduction in daily calls, saving time for both Piedmont Healthcare and physician office employees.”
For Piedmont Healthcare, all of these projects engaged not only departments, but also key stakeholders, who invested resources to improve the process. “In most instances, there was initial skepticism from these outside entities, but after going through the project, these leaders not only talk about the improved business results, but they also will tell you how beneficial it has been for them, their teams, their knowledge of the hospitals process, and, most important, the significantly improved relationships between team members,” Unell says.
5 Best Practices to Consider
Many hospitals already use Lean Six Sigma. The framework is well known and recognized. Black Belts, Green Belts, and chief experience officers already are in place throughout most health systems. Learning from their experiences, revenue and finance executives new to Lean Six Sigma should consider the following five best practices for their teams.
Milestones. Lean Six Sigma is a journey that begins with certification. The first step is to hire at least one certified Black Belt. The Black Belts are then aligned to specific departments or problems. Assignments shift as Lean Six Sigma processes continue to be established and improved.
Scorecards. Scorecards keep track of weekly performance data. They are multilayered documents that are continually used, updated, and improved to peel back the layers of a specific problem. Team members use scorecards to work toward matching patient and family experience to expectations—always moving from reactive to proactive.
Continual training. To remain Black Belt and Green Belt certified, teams need ongoing training. Black Belts initially become certified by completing a project that gives the organization back $1 million in savings, as mentioned above. The Black Belt leader must continually improve, overseeing projects that result in $500,000 in savings every year.
Measure. Data capture and analysis are key components of a successful Lean Six Sigma program. Dive into the data: Is the root cause one staff member, one type of patient or interaction, or one location or hospital? All relevant information must be plugged in and analyzed.
Early warning system. Use Lean Six Sigma methodologies to analyze data trends from customer scorecards and create an early warning system to alert staff to the most important patient satisfaction concerns.
“If you use the right tool, you should come up with the proper solution to fit a specific problem,” Unell says. “Just because you see something sticking out of the wall doesn’t mean a hammer is always the best tool to use.” Lean Six Sigma initiatives help organizations find the right solutions, through technology, staffing, or process improvement, to reach each corporate goal.
As the healthcare industry transitions from rewarding for volume to rewarding for value, Lean Six Sigma processes can optimize customer value for every encounter and patient, every time. Executive leadership must already be engaged and convinced. Lean Six Sigma is a cost center, but there are tremendous bottom-line savings and ROI that results from patient satisfaction and customer retention.
