casestudy bgu en 20111221

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Katrein Aßmann

Bert Hoffmann

“This project shows once again that

substantial positive effects can not only

be achieved for the service providers but

that the application of lean methodology

can optimize resources successfully inthe administration of hospitals, too.”

Every Day Counts –

Effects Caused by Applying Lean Administrationto Hospitals

Key data BGU Ludwigshafen

The BGU Ludwigshafen is a tertiary care

hospital with 440 beds. It is operated

by the Heidelberg Association for

Therapy and Treatment under the

German Employer’s Liability Insurance

Association. This registered society

joined the Clinic Association of statutory

accident insurance (KUV) in September

2011. The nation-wide merger of the

operators of nine Trauma centers and

two hospitals for occupational diseases

as well as the operator of the statutory

accident insurance providers in the KUV

takes account of increasing economic

pressure and competition. The KUV now

represents facilities with revenue of

some one billion euros that are medically

and economically of major importance

in special treatment sectors. More than100.000 patients are treated as

inpatients and more than 300.000 as

outpatients every year ¹.

The BGU Ludwigshafen is specialized

in inpatient as well as in outpatient care

of emergency trauma cases. 31.000

surgical procedures were carried out

and 21.500 injured patients were treated

as outpatients in 2010. The annual

report states 11.516 fully inpatient cases

for 2010 ².

The BGU Ludwigshafen is not only a

centre for traumatology. It acts as a

service provider with proven expertise

in the whole rehabilitation process for

statutory accident insurers as well ³.

Initial Situation

Five employees were trained as Lean

project managers and seven employees

were trained as project staff in

Lean Management at the Stryker

LeanAcademy in May 2011. The Stryker

LeanAcademy was founded in 2006

by Dr. med. Hank Schiffers and is

specialized in Lean Management

solutions in the health care sector as

well as in the cross-functional training of

hospital staff. A so-called value stream

team, comprising employees along the

whole process of accounting, was put

together for this training. This team

comprised employees of the interfaces:

ward, pharmacy, doctors, organization

controlling, controlling, IT, laboratory

as well as from the divisions: Admission

of patients, medical controlling,performance accounting and financial

accounting.

The approach according to the Lean

methodology was largely unknown

territory for project team members.

For many team members it was the first

time working together on a problem

consequently with colleagues of

different occupational background and

across divisions.

Lean Methodology

The Lean methodology was developed

in the 1950s by Toyota to optimize

processes in the automotive industry.

Essential approaches include process

Results

• Cash flow increased by €2 million

• Discharge to invoice reduced by

11 days (statutory health insurance)

and 12 days (private health insurance),

respectively

• Quality of invoices, measured by

queries resulting in corrected

invoices, kept constant

• Cash outstanding improved by 50 %

• Response- and wait times decreased

in the overall documentation, coding

and settlement processes

• Predictability of human and financialresources significantly improved

• Implementation of internal lean

projects reduces cost-intensive

external consulting

Authors

Ursula Lang**, Katrein Aßmann*,

Sabine Frank**, Bert Hoffmann*,Dr. med. Hank Schiffers, MBA,

Alexander Conz, MD, MBA

* Stryker GmbH & Co.KG,

* * BG-Unfallklinik Ludwigshafen

Christoph Bendick

Commercial Director since Oct. 2011

“I am especially impressed that this

project is not only the achievement of

physicians, the nursing department or the

administration. The collaboration of staff

across all departments has made thisproject a success. I would not have

thought these results to be possible.”

¹,², ³ cf. Annual Report 2011



optimization in small, quick steps

implemented by the local employees

and the consideration of all processes

from the customers perspective. To

this end, the individual process steps

are analyzed in a structured way and

divided into value-added and non-value-

added activities.

This approach and staff training in

theory and practice based on a

specific project is a major investment

in building internal expertise in process

optimization.

Ursula Lang

Head of Department of

Patient Services and Finances

“The project was great fun. We had

some really tough wrestle. At the

beginning of the project, I could not

imagine achieving such sustainable

and significant results with the Lean

methodology. The approach to

reorganization and the plurality of

the project team have made this result

possible.”

By the follow-up project and an on-site

coaching led by Mrs. Assmann theefficiency could be increased significantly

within the first five months. Initial

expectations were exceeded by far.

Summary of Project Achievements

The project team started with the overall

analysis of the process from patient

admission to treatment and discharge

through to payment. Approximately 50 %

of all hospital cases were analyzed.

The goal was to reduce the effort for the

billing process as well as the amount of

outstanding invoices in order to minimize

the time between patient discharge and

billing, as well as the optimization of

payment receipt. The date of the

invoice is here defined by the dispatch

of the bill by the hospital to the

Insurance company.

After careful analysis, the following

actions were identified and successfully

implemented from July / August:

• Installation of a work cell to ensure the

prompt and competent processing of

individual invoices as One Piece flow.

Waiting times between the individual

steps are thus reduced by up to 50%

or avoided completely.

• Introduction of a fast path, a so-called

Easy Track, for simple cases

resulting in a significant reduction

of process time.

• The coordination effort and the waiting

time of the remaining cases were

significantly reduced.

Discharge to invoice

reduced by

100

90

80

70

60

50

40

30

20

10

0ø 2010 Oct. 2011

Index

Secondary Process Indicators

Process quality

Percent invoice rework

Throughput

Internal approval time

Cost

Invoicing meetingtarget corridor

Impact on Cash flow

2010 Oct. 2011

Index

100

+2 mio €

Legend

no change improved massive ly improved

100

43,8

56,2

Dr. med. Hank Schiffers, MBA

“I planned this project in close collaboration with the management of the German

BG-Unfallklinik Ludwigshafen in the beginning of 2011. We initiated and accompanied

it to show, due to the expected financial success, that Lean Administration is the

second pillar of Lean Hospital. I congratulate the project team for their excellent

results. It prooves again true; No money – no mission”



• Optimization of the interface

communication to ensure the

uninterrupted processing, the

so-called flowing system, of billing

cases. On the one hand, this was

achieved by improved organizational

processes instead of optimizing

sectors. On the other hand, the

colleagues trained each other and

developed clearly defined

responsibilities (job enrichment),

ensuring a clear and competent

substitution in case of illness or

vacation in order to ascertain

continuous work flow.

• Systematization and structuring of the

suppliers in terms of transfer of billing

data and documentation.

Measurable Success

Significant improvements have been

achieved in accounting. Since

September, the period from discharging

until invoicing, which was identified

as key performance indicator, shows a

good and stable course below the

target value. The development of the

secondary control parameters is

positive, as well.

The overall development of the financialsituation is significantly positive,

showing an increase of 2 million € in

Cashflow with the resulting positive

impact on interest rates, liquidity, etc.

Stabilization and Optimization

of Operational and Organizational

Processes

The optimization phase was followed by

the stabilization phase. By streamlining

the process, now less rework and

search effort have to be conducted. The

introduction of the work cell and the

learning achievements of the staff in

Lean methodology changed the whole

cooperation process. It changed the

employees view of the functions and

divisions as well as the process-oriented

cooperation.

The project team agreed upon a regular

reporting and meetings to review the

project results in the further course.

A process owner was named, who will

be responsible for the continuous andsustainable development of the entire

billing process in the future and who will

be in charge of convoking staff meetings

in case of changes in order to discuss

further problem-solving approaches.

Sabine Frank

Head of Patient Guidance Department,

Provisional Head of Medical Controlling

Department

“None of the participating colleaguescould probably have imagined the

significance of the “accounting process”

before beginning the project. Nobody

could imagine how complex this process

would be. Due to the nature of this

project work, the process was visualized

quickly and vividly depicted. The

participants quickly realized that every

step in the value stream can intervene in

the operations of the predecessor or

successor, and that these processes can

be influenced.”

The Next Steps

The enormous success of the project in

the accounting helped us to the detect

additional optimization potentials and to

use them.

Thus, the project team is able to ensure

the sustainability of the implemented

improvements and to focus on the

process stages of invoicing through to

the receipt of payment on the basis ofbest practice approaches.

VALUE STREAM – OVERVIEW

admissionadmission

diagnosis

preliminary

insuranceapproval

data /

validation

plausibility

checkapproval discharge invoicing

receipt of

payment

The entire process of accounting includes all areas from admission to payment reception

casestudy bgu en 20111221

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