improving healthcare productivity - j.o.p consulting quality and productivity concerns us healthcare...

Copyright © 2012 JOP Consulting

Improving Healthcare Productivity

What are Leading Hospitals doing to Improve Productivity

and Financial Success while improving Clinical Outcomes

Applying lessons learned from High Technology (even

though 3 of 4 Implementations don’t meet expectations!)

R6

Copyright © 2012 JOP Consulting 2

High Technology Industry

What can we learn from ‘Best In Class’ High

Technology Companies?

Can we apply those lessons to

improve Productivity, Clinical Outcomes

and Patient Loyalty?


Today – Increasing Financial Pressure

“President Obama wants to move from a

fee-for-service system … to one that rewards

disease prevention” 1

“Obama on April 14th 2011 outlined a plan to

cut $480 billion by 2023 from the US

Governments health care programs for

the elderly…”

“Moody’s Investor Service downgraded slightly more not-for-profit hospitals and systems

for the first 3 months of the year, a trend that’s expected to continue…” 2

“There is a general consensus that widespread adoption of electronic health records will

result in increased efficiency and improved patient care” 3

1. Wall Street Journal. April 16, 2011

2. Modern Healthcare. April 15, 2011

3. American Journal of Managed Care, Dec 2010


Costs, Quality and Productivity Concerns

US healthcare costs doubled from 1990 to 2001 and are projected to

double again by 2012.1

Chronic conditions account for 78% of healthcare spending and will

increase significantly over the next 30 years.2

America’s Best Hospitals ratings focus on Reputation, Mortality, Safety

and other criteria, but not Process Improvement.3

The Baldrige Award criteria addresses only part of the Productivity / Cost

concerns.4

1. Mulheron J. NGA Issue Brief: Creating Healthy States: Building Healthy Worksites. Washington, DC. February 25, 2006.

2. Anderson G, Horvath J. The growing burden of chronic disease in America. Public Health Reports. 2004;119:263-270.

3. US News & World Report. Top 100 Hospital Assessment

4. Baldrige Assessment. JOP Consulting


Government Involvement is Increasing


Assessment of High Technology

2) Information

transparency

4) Performance and

consequence

management

5) Customer

feedback loops

1) Quality strategy

3) Integrity and

cross-functional

accountability

6) Risk management

and failure

prevention

7) Quality processes

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√ = strong capability

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

Automotive Hi-tech Aerospace

√

√

√

√

√

√

√

√

√

CAPABIILITY

Source: McKinsey/Pearson Analysis, 2005

CALL FOR DETAILS !

http://g.msn.com/mh_mshp/?http://www.microsoft.com&&HL=Microsoft+Banner+Image&CM=Masthead&CE=h

http://www.sap.com/index.epx

http://www.ibm.com/us/


None of the 17 medical centers listed by U.S. News & World Report on its “Best Hospitals Honor Roll’ this year are on the Joint Commission’s list that received at least a 95 percent composite score for compliance with treatment standards.

33% of score is Reputation

Reputation and performance on

important measures of quality do not

always correlate.

Dr. Mark R. Chassin, President

Sept 14, 2011


Patient Satisfaction

Culture

Leadership

Capability C/I Tools

Measurements

Organization

Capabilities Impact Outcomes

Strategy

Revenue, Cost and

Quality Optimization


Assessment of Healthcare 2003 – 2009 Baldrige Award Winners

2) Strategic

Planning

4) Measurement

System

5) Patient Loyalty

1) Leadership

3) Organizational

Culture

6) Continuous

Improvement

Program

√ = strong capability

CAPABIILITY

Baptist

Hospital

Robert

Wood

Johnson

Univ.

Bronson

Methodist

Hospital

North

Mississippi

Medical

Sharp

Healthcare

Mercy

Health

System

Poudre

Valley

Health

System

Heartland

Health

Atlantic

Care

2003 2004 2005 2006 2007 2007 2008 2009 2009

Source: Baldrige Award Reports

CALL FOR DETAILS !


Key Messages

• Leadership has emerged as a

critical necessary driver for success.

• Few companies operate an end-to-

end integrated quality

management system/methodology.

Those companies outperform

their competitors in financial and

customer satisfaction performance

• Leading companies have developed

strong capabilities in select

quality areas, but still have

improvement potential along other

quality excellence attributes. A ‘high

technology’ leader may not yet exist.

Copyright © 2012JOP Consulting

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Measurement Hierarchy - do you need one?

Measurement System

It’s a structured way to measure the business

Ties the business goals to the process goals

Goal:

Better Care

Better Health

Improve Visibility

Accountability

Rigorous

Financial (P&L) improvement


Productivity

Leadership

Culture

Process

Measurement

Analysis Structure

Dependent Variables

Independent Variables

FINANCIAL SUCCESS

PATIENT LOYALTY


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“The difficultly in defining quality is to translate future

needs of the user into measurable characteristics, so

that a product can be designed and turned out to

give satisfaction at a price that the user will pay.”

W. Edwards Deming Out of the Crisis


15 15

Conflicting Metrics must be resolved Improving a Hospital Metric can Negatively impact the Surgeon or cause Patient Delay

Pre-Surgical

Test

Same Day Admit

OR PACU Discharge

* Sterile Processing Department (SPD) analysis part of OR

PST

o Increase Staff

and Process

Steps to

Assure Chart

Completeness

o OR TAT

Reduced

o Accept Ratio

Same Day

o Staffing

o Dr. and

Patient

Approvals

o Anesthesiolog

ist Review

and Approval

OR

o Surgeon Productivity

o Anesthesiologist

Performance

Measure

o Hospital Productivity

o SPD

o Block Schedule

Management

PACU

o Flex Staffing

saves Money

o Negative

impact on

OR TAT

Discharge

o Staffing

o Computer

Systems


Behavior of the Organization

Organization = Employer Created Environment

#1 goal is to ____________

Environment = Created by Employee Attitudes

#1 goal of people is to protect their own ‘Value

System”


The obscure we eventually see. The

completely obvious, it seems, takes longer.

Edward R. Murrow

American Journalist (1908- 1965)


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Ad-hoc Problem Solving Dilemma

Poor problem definition

You don’t find and work on root causes

Right People

But wrong tools are used

Right Tools

But wrong people are engaged

Right People, Right Tools

But no time is allocated

No accountability

No tie to Organizational Goals


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Pick the right tools to build your Measurement System Pick the RIGHT tool for the Job!

Data

defined and

collected –

analyze and

filter data

Perform

partitioning

and create

heat maps

Perform

root-

cause

analysis

Solution

generation

Selection

solutions

Fact

database

complete

Hypotheses

of potential

root causes

Root causes

isolated,

prioritized and

documented

Develop

rollout

plan

Implement

solutions

Roll-out

ready

Implementation

complete with

initial feedback

captured

Solutions

developed

and validated

Solutions

deployment

plan complete

1 2 3 4 5 6 7

High impact

tools

Events

database

Process

Maps

Activities

tracking

tool

VoC

Map of

system

functions

and

interactions

Cause and

effect

5-whys

Interaction

analysis

FMEA

Fault tree

DOE

Catalogue

of solutions

Updated

FMEAs

Solutions

assessment

and roll-out

priority

Project plan

Resource

map

Performance

scorecard

Tools


20 20

Quality Measurement Recommendations

Create a Hierarchy of Metrics for your Organization

Restructure the Quality Metrics around Value Streams

Generates more visibility

Easier to see ties cross-department relationships

Improves Accountability

Restructure the Quality Metrics around Business Goals

Ties your efforts and the Organizations together

Leadership visibility and Funding opportunities

Centralize your Project Tracking

Purchase Project Tracking SW or Create Internally based on your needs

Consider the Baldrige Framework

Eliminate Unnecessary Reports

That do not tie to the Quality Hierarchy

That don’t help facilitate continuous Improvement


Conclusions

Customize to fit the culture.

Top-Down and Bottom-Up to be most effective.

Prove your results. Finance is a core team member.

Cross-Functional Projects

Over-communicate the wins and the mission.

A strong infrastructure is a must.

Self Inspect – What can we do better?

There are more than just financial benefits…measure them.


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Appendix


References How to Prevent Lean Implementation Failures: 10 Reasons Why Failures

Occur. ISBN: 0966290674 Larry Rubrich

Industry Week Reported that 72% of the 884 U.S. companies responding to their survey

were in various stages of implementing an improvement strategy such as Lean or World

Class manufacturing, Agile manufacturing, Six Sigma, TPS, Theory of Constraints, or others.

Of these companies, 75% reported that they had made no or just some progress toward their

World Class manufacturing goals. Only 2% of the companies reported achieving World Class

manufacturing status.

Lean Six Sigma at the Cross Roads. The Conference Board Study.

iSixSigma Magazine. 2008, Volume 4, Issue 6

Maintaining Lean Six Sigma Relevancy, Resiliency and ROI during a

Recession. Webcast Crescenzi, Pearson. Sep 2010

Where Process-Improvement Projects Go Wrong. Chakravorty. Wall Street

Journal, Jan 2010.

10 Ways to Failure for a New Six Sigma Deployment. G. Ranjan. iSixSigma

Magazine. March 2011

Reasons for Six Sigma Deployment Failures.. Marvin Wurtzel. Fellow of the

American Society of Quality. Jun 2008

Using Lean Sigma to Improve your ‘Airport Experience’. James Pearson,

Quality Digest, 2009


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References

The Process Audit. Michael Hammer. HBR. 1997

The Psychology of Change Management. Emily Lawson and Colin Price.

McKinsey Quarterly 2003

The Self-Designing High-Reliability Organization: Aircraft Carrier Flight

Operations at Sea. Rochlin, LaPorte, Roberts.

The Impact of Global Program Management on Organizational Culture.

Pearson. Webcast, Feb, 2009

Innovation in Health Care. An Interview with the CEO of Cleveland Clinic.

Buescher, Mango. McKinsey Quarterly, 2008

When Clinicians Lead. Mountford, Webb. McKinsey Quarterly, Feb 2009

Metrics: You are What you Measure!. Hauser, Katz. European

Management Journal. Oct 1998

BayCare Health System. Power Steering Software.

Innovation in Health Care. An Interview with the CEO of Cleveland Clinic.

Buescher, Mango. McKinsey Quarterly, 2008

When Clinicians Lead. Mountford, Webb. McKinsey Quarterly, Feb 2009


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References

How to Reduce Hospital Health Care Costs. By David Belson, May6, 2010

Crossing the Quality Chasm. Institute of Medicine, March 2001

Leading Change; An interview with the CEO of EMC. McKinsey on

Organizations, August 2005

New Survey: 72% of Americans Think Health Care System Needs Major

Overhaul. Mary Mahon, Bethanne Fox, August 6, 2011

Center for Value Based Health Management. www.CenterVBHM.com

Hoshin Planning. J.O.P. Consulting

2009-12-08 Geisinger Health Plan – Salaried Doctors. Inside a US

Healthcare “Island of Excellence”

The Process Audit. Michael Hammer. HBR. 1997

The Psychology of Change Management. Emily Lawson and Colin Price.

McKinsey Quarterly 2003

The Self-Designing High-Reliability Organization: Aircraft Carrier Flight

Operations at Sea. Rochlin, LaPorte, Roberts.

The Impact of Global Program Management on Organizational Culture.

Pearson. Webcast, Feb, 2009

Health Care’s Infectious Losses. Paul O’Neill, Secretary of the Treasury

(2001-202), July 6, 2009

http://www.centervbhm.com/


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References

White House Medicare Savings Outlined Wall Street Journal, April 14 2011. By Janet Adamy

http://online.wsj.com/article/SB10001424052748703551304576261144184511676.html?KEYWORDS=healthcar

e+costs

“WASHINGTON—President Barack Obama on Wednesday outlined a plan to cut $480 billion by 2023 from the U.S.

government's health-care programs for the elderly and poor, drawing a sharp line of disagreement with House Republican

leaders over how to rein in the burgeoning costs of medical care.”

Moody’s notes pressure from Federal Cutbacks Modern Healthcare. April 15, 2011. by Melanie Evans

http://www.modernhealthcare.com/article/20110415/NEWS/304159967

“Moody's Investors Service downgraded slightly more not-for-profit hospitals and systems than it upgraded during the first three

months of the year, a trend that's expected to continue,..”

Health Care Reform Becomes Health Insurance Reform Bloomberg Businesweek. August 11, 2010 by Cathy Arnst

http://www.businessweek.com/blogs/money_politics/archives/2009/08/health_care_ref.html

“What changed? For one thing, Congress has not been willing to overhaul the fee-for-service method now in place for paying

doctors and hospitals, which rewards health care providers for quantity, not quality. Given that hospitals and physicians together

account for two-thirds of the nation’s health spending, taking a hands off approach to their payments doesn’t leave the legislators

with a lot of other places to find significant savings.”

http://online.wsj.com/article/SB10001424052748704116404576262943694897016.html?KEYWORDS=healthcare+costs





http://www.modernhealthcare.com/article/20110415/NEWS/304159967

http://www.businessweek.com/blogs/money_politics/archives/2009/08/health_care_ref.html


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References

Improving hospital performance and productivity with the balanced scorecard http://findarticles.com/p/articles/mi_m1TOQ/is_2/ai_n25009491/?tag=content;col1

Academy of Health Care Management Journal, Annual 2006. By Kenton B. Walker, Laura M. Dunn

This paper describes an approach to designing and implementing a balanced scorecard system for

measuring performance and productivity in a hospital setting.

Modern Healthcare. Healthcare Business News Obama budget trims Medicare,

Medicaid

http://www.modernhealthcare.com/article/20110214/NEWS/302149939/

“While we are pleased that the president's budget does not include any new major reductions in

payments for hospitals services to Medicare beneficiaries, we are deeply disappointed that today's budget

reduces Medicaid, which funds services to our most vulnerable patients such as the poor and disabled,”

according to Richard Umbdenstock, AHA president and CEO.

New Efficiencies in Health Care? Not Likely Wall Street Journal, April 16, 2011. By Theodore Dalrymple

http://online.wsj.com/article/SB10001424052748704116404576262943694897016.html?KEYWORDS=healthcar

e+costs

“President Obama also wants to move from a fee-for-service system, which gives doctors an incentive to

perform expensive and doubtfully effective procedures, to one in which doctors are rewarded for

preventing diseases that are so expensive to treat. On paper, prevention always seems much cheaper

than cure. Health-care economists prove it very elegantly and convincingly over and over again.”

http://findarticles.com/p/articles/mi_m1TOQ/is_2/ai_n25009491/?tag=content;col1

http://www.modernhealthcare.com/article/20110214/NEWS/302149939/




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