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Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4 Simple BFO 4 Simple BFO s that Change s that Change Everything Everything Presented By: Joseph Duhig Senior Vice President Juran Institute, Inc. February 23, 2008

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Page 1: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare

4 Simple BFO4 Simple BFO’’s that Change s that Change EverythingEverythingPresented By:

Joseph DuhigSenior Vice President

Juran Institute, Inc.February 23, 2008

Page 2: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 2 .PPT

BFO’s = Blinding Flashes of the Obvious

Page 3: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 3 .PPT

BFO’s from the Great Guru’s of Quality

“Establish an environment in which Quality can thrive”Jim Reinertsen, MD

“Our business is clinical medicine” & “Quality improvement is the science of process management”

Brent James, MD

“Every system is perfectly designed to achieve the results it gets”

Don Berwick, MD

Page 4: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 4 .PPT

The Medical Profession is changing from: craft-based practice

individual physicians, working alonehandcraft a customized solution for each patientbased on a core ethical commitment to the patient andvast personal knowledge gained from training and experience

To Profession-based Practicegroups of peers, treating similar patients in a shared settingplan coordinated care delivery processes (e.g., standing order sets)which individual clinicians adapt to specific patient needs

BFO #1 – Establish an environment in which quality can thrive

Page 5: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 5 .PPT

History of Manufacturing

Page 6: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 6 .PPT

History Timeline For Lean Manufacturing

Page 7: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 7 .PPT

Key Principles of Lean Thinking - adapted from James Womack

Specify value in the eyes of the customerIdentify the value stream for each productMake value flow without interruptionsLet customers pull valuePursue perfection

Becoming a Lean Enterprise requires a fundamental rethinking of the design of our production system ...A Value Stream / Kaizen approach will not give us the transformation we need.

Page 8: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 8 .PPT

Batch-and-Queue – the mass production practice of making large lots of a part and then sending the batch to wait in the queue before the next operation in the production process. In health care we batch-and-queue people.

Single-piece-flow – a situation where products (or people) proceed one complete product at a time through various operations.

The Language of Lean Thinking…

Page 9: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 9 .PPT

The Language of Lean Thinking…

Other Terms: andon boards, cells, process villages, five whys, five S’s, JIT, monuments, poka-yoke, Quality Function Deployment QFD, milk runs, right-sized tool, pull vs, push, flow, changeover, level schedule, takt time,visual control, kanban, value streams, turnback analysis

All these terms apply in healthcare, but some translation is required.

Page 10: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 10 .PPT

BFO # 2 – Our Business is Clinical Medicine

The health system of the future must transform from a batch and queue production-like system to a continuous flow, lean enterprise. In healthcare the product lines are the clinical programs and wemust design delivery systems that provide value as patient’s access and utilize our services for specific diseases or conditions.

We work in a complex and highly specialized world and our healthcare providers, facilities, work processes and informationsystem must be designed to support the delivery of services in aprocess oriented vs. a financial / administrative model.

Placing a patient “off-service” increases risk of harm

Page 11: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 11 .PPT

BFO # 2 – Our Business is Clinical Medicine

Required Changes:

1. Clinical program “Door” Theory – we need to help patients find the right door to access the system and then that should be the last door they have to find.

2. Professional practice model.3. Universal beds / Every bed is capable of being

converted to an intensive care bed.4. Hospitalist and Intensivist who drive the quality agenda

Hand-offs between levels of care not only causes safety problems, but results in a 30% loss of bed capacity each day

Page 12: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 12 .PPT

The Dilemma of Adopting Professional Standards of Practice

Failure to adopt nationally accepted standards such as 100,000 lives, Leapfrog, CMS place organizations at increased liability risk. Adoption of professional standards without ensuring compliance to standards increases the liability risk.

The largest repository of professional standards are nursing policies and procedures.

The EHR can dramatically increase compliance with standards. Charting by exception, use of standard orders, immediate access

to current evidence (Zynx, CPMRC) offers opportunities to improve outcomes and reduce costs.

Page 13: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 13 .PPT

BFO # 3 – Quality Improvement is the Science of Process Management

Healthcare must adopt a “Process Mental Model”

For Example: Each morning we prepare the operating rooms for a busy day of cases, but most lack a “Mental Model” of how we get the cases to roll.

Healthcare has been slow to adopt the process discipline for understanding how we do the things we do every day.

Page 14: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 14 .PPT

BFO # 3 – Quality Improvement is the Science of Process Management

Evidence Based Medicine is conceptually the same as Mass Customization in Manufacturing

If processes are redesigned and standardized, the Electronic Health Record offers the potential to significantly reduce the largest contributor to Costs of Poor Quality in Hospitals...the unexplained variation in clinical practice.

processessystems (processes interacting together)

human psychologyvariation

a system for ongoing learning

Managing

Page 15: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 15 .PPT

A documented written model for each level is essential for consistent, low risk performance of a process.

The Hierarchical Nature of Process

This is where EBM is

implemented

Level 1:Macro Process

Level 2 – Business ProcessLevel 3 – Sub-processLevel 4 – Activity & Decision Level 5 – Task

Page 16: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 16 .PPT

BFO # 4 - “Every system is perfectly designed to achieve the results it gets”

Y = f(x)Mortality = f(x)

Surgical Infections = f(x)Patient Satisfaction = f(x)

Beta Blocker Compliance = f(x)Medication Errors = f(x)

Define the Practical Problem

Translate to Statistical Problem Y = f(x)

Solve the Statistical Problem

Translate back to the Practical Problem

Page 17: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 17 .PPT

23

456

308,53766,8076,210

SigmaSigma Defects per Million opportunities

Defects per Million opportunities

2333.4 .

3s to 6s 3s to 6s -- 20,000 Times Improvement... A True Quantum Leap20,000 Times Improvement... A True Quantum Leap

(99.99966% good)

(99.98% good)

(99.4% good)

(93.3% good)

(69.1% good)

What is Six Sigma?

Page 18: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 18 .PPT

Unnecessary visits

Hospital patientcost variation

Seco

ndar

y O

ppor

tuni

ties

Primary Opportunities

0

20

40

60

80

100%Pharmacy usage

ORUtilization

HospitalUtilization

MRI

Area BDiag. Rad.

CT head& Body

Area ADiag.

Radiology

Diag.Radiology

Misc.

Adm

inis

trativ

e st

aff l

evel

s an

d pr

oced

ures

$200MM

Cod

ing/

char

ge c

olle

ctio

nU

nbill

able

writ

e-of

fsC

laim

sre

ject

ions

Wor

k ar

ound

Insp

ectio

n/re

wor

k

Bra

nd s

cope

redu

ctio

n &

sta

ndar

diza

tion

Travel expensesInventory turns

Insp

ectio

n/re

wor

k (C

ompl

etio

n D

esk)

Rew

ork

(Lab

tran

scrip

tion)

Dup

licat

e co

ding

Empl

oyee

dru

g pl

an

20 40 60 80

Patient Care Practice Variation Hospital Utilization

Rad

iolo

gy

Billi

ng

Adm

in. S

taff

Des

k U

nit

Supp

ly

Med

. Rec

ords

Mis

c.

Pareto Principle – Focus on the Vital Few

Page 19: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 19 .PPT

OR First Case Start Time

0 10 20 30 40 50 60 70 80

USLUSL

Process Capability Analysis for Case Rolled

USLTargetLSLMeanSample NStDev (Within)StDev (Ov erall)

CpCPUCPLCpk

Cpm

PpPPUPPLPpk

PPM < LSLPPM > USLPPM Total

PPM < LSLPPM > USLPPM Total

PPM < LSLPPM > USLPPM Total

30.0000 * *

37.1050238

8.456410.0149

*-0.28

*-0.28

*

*-0.24

*-0.24

*710084.03710084.03

*799601.67799601.67

*760977.44760977.44

Process Data

Potential (Within) Capability

Ov erall Capability Observ ed Perf ormance Exp. "Within" Perf ormance Exp. "Ov erall" Perf ormance

Within

Overall

Page 20: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 20 .PPT

Glucose Levels of Diabetic Cardiac Surgery Patients

0 100 200 300 400

LSL USL

Process Capabil ity Analysis for Blood Sugar

USL

TargetLSL

MeanSample N

StDev (Within)StDev (Overall)

Cp

CPUCPL

Cpk

Cpm

Pp

PPUPPL

Ppk

% < LSL

% > USL% Total

% < LSL

% > USL% Total

% < LSL

% > USL% Total

150.000

* 80.000

193.386329

30.839255.9094

0.38

-0.47 1.23

-0.47

*

0.21

-0.26 0.68

-0.26

0.30

76.6076.90

0.01

92.0392.04

2.13

78.1180.24

Process Data

Potential (Within) Capability

Overall Capability Observed Performance Exp. "Within" Performance Exp. "Overall" Performance

Within

Overall

Page 21: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 21 .PPT

Hoshin Planning, Strategic Deployment

Objectives - Means

Sub-GoalsAnnual Goals

Projects/Initiatives

VisionVision

KeyStrategy

KeyStrategy

StrategicQuality Goals

Time Time

5 Years 5 Years 1 Year 1 Year

Page 22: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 22 .PPT

“Trying is just a noisy way of not doing something.”

– Ken Blanchard

“Try?! There is no try! There is just do … and not do.”

– Yoda

In Conclusion...

Page 23: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 23 .PPT

Impact on Net Income

Change to cost structure

Discounted FFS

Per Case Per Diem Shared Risk

Decreased cost/unit

Decreased # units/case

Decreased LOS

Decreased # of cases

BFO # 5 – No Good Deed Goes Unpunished

Page 24: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 24 .PPT

CLABS Scorecard

OptimalCare

Less than optimal care

Less than optimal + CLAB

Patient + - - ---Payor + -- ---ProviderHospital ++ + ---ProviderPhysician + ++ +++

Who Pays for the Cost of Error?

Page 25: Lean Six Sigma in Healthcare Lean Six Sigma in Healthcare 4

All Rights Reserved, Juran Institute, Inc. 8005 Lean Overview 25 .PPT

New Rules to Redesign and Improve Care

Care based on continuous healing relationshipsCustomization based on patient needs and valuesThe patient as the source of controlShared knowledge and the free flow of informationEvidenced-based Decision MakingSafety as a system priorityThe need for transparencyAnticipation of needsContinuous decrease in wasteCooperation among clinicians

IOM Report – Crossing the Quality Chasm

Creating a Lean Healthcare System