By: Marjorie Green & Mischa Dick; Six Sigma Systems, Inc.

Today healthcare providers are under a constant stream of attacks from legislation, litigation, competition, payers and patients alike. The industry that once was based on a cost plus foundation has found itself at the center of a firestorm of public controversy which is forcing a change in the way healthcare is practiced. The pathway through the challenges will be made more difficult by ongoing changes from the above elements. Learning to operate in a more patient friendly and efficient manner in the midst of change seems like an impossible dream, but other industries have learned not only to adapt but to thrive in the midst of change. The same methods and tools that they have used successfully are being introduced into healthcare at a rapid rate. This article will explain some of the successful change methodologies that have been used to improve the operational and financial performance of businesses and that are arriving on the healthcare scene.

Before explaining some of the methodologies and their history it is important to consider the most valuable asset a leader has available to them as they begin to lead change. Many leaders talk about how important their “team” or “people” are and how they are the most valuable asset. These approaches are centered on developing and leveraging each and every person every day to create a nimble organization that is capable of meeting the demands of a dynamic marketplace. Many healthcare providers have not made an investment in their people. They have invested in IT and other capital equipment but they have not developed a team of people to make the most of the resources at hand. This approach to doing business changes that. It puts the investment squarely in the team of people that touch patients, physicians and payers everyday. If this team is not strong your results will not be strong. If this team is not focused on achieving the same outcomes the outcomes will not be achieved. The approaches we discuss here will explain how to engage the organization at all levels to focus on improving the patient experience and the operational and financial performance of the business.

The key to success in any change program is leadership. If leadership does not adopt disciplined behaviors that all of the following methodologies require and expect the same from their organization, the tools and methods will not stick, instead the corporate immune system will have survived to become stronger. If leadership instead stays focused throughout some of the friction that will be caused by making changes, the culture will change and the corporate immune system will have been weakened. The organization will be a more capable organization. Many leaders go into an improvement program thinking that everyone will be happy and “buy in” to the changes. Nothing could be further from the truth. Change is difficult because people have been promoted by being “good” in the existing system. Thus there is a vested interest at many levels of the organization to keep the existing system in tact regardless of what is being said. With that in mind we will look at some of the principles and methodologies available on a factual basis. We will answer some common questions and attempt to clarify some of the misconceptions we run across when talking with healthcare providers. The following programs are not pills or silver bullets that will cure all ills; they are instead lifestyle changes that will help a beleaguered industry, that all of us depend on, fight back and win.

Six Sigma

Six Sigma has gained much attention in recent years. The methodology was originally used primarily on manufacturing defects. In the past few years companies have begun to apply it to business and service processes. One common misconception is that six sigma is simply a measurement. While it can be used as a measure of quality, it is in fact much greater than that as we will show. Another misconception is that it was “invented” by General Electric. It was not. Its’ roots can be traced back many years but the term “Six Sigma” was coined by Motorola to mean a level of perfection equal to 3.4 parts per million defective. The people who were trained and practiced the skills to improve processes were dubbed “Black Belts” because of the disciplined and rigorous approach they used to solve problems. This disciplined approach has numerous versions available in the market place but the most widely recognized is DMAIC:

D – Define the problem
M – Measure the inputs and the outputs
A – Analyze the process using various techniques that include statistical tools to relate the inputs to the outputs using data
I – Improve the process by using information from the analysis to change inputs that will improve the outputs
C – Control by continuing to monitor the process so that if problems occur they are addressed quickly

These steps to problem solving are taught in addition to tools that are helpful at each step. Some examples of the tools taught are:

• Process Mapping
• Failure Modes and Effects Analysis (FMEA)
• Basic Data Analysis
• Statistical Process Control (SPC)

Six Sigma is generally taught at various levels of the organization including:

• Executive
• Champion
• Managers
• Black Belts
• Green Belts

A good six sigma program will require all Black Belt and Green Belt candidates to work on and complete projects that have a demonstrated business impact. Many courses have evolved over the years that are based primarily on class work and tests with little attention to project work. This is a clear violation of the tenants of the approach. Originally the intent was to be trained by and to practice the skills under a master level person who had multiple successful projects to their credit until a person’s skills were developed. This has fallen by the wayside in recent years in many companies.

Since projects are the foundation for results, much attention should be given to the selection of projects and the deployment of resources on them. There are two primary ways of doing this. The first is to train a large number of people to go after a lot of “small” intra-departmental projects. The idea being that many small changes add up to large results. In a non-manufacturing process this is a highly debatable topic. By and large the process foundations are such that small changes will yield small results at best and commonly sub-optimize the entire process. The second approach is the strategic project which takes a large project and assigns a cross functional team to fixing it end to end. Examples include revenue cycle, supplies management, etc. These require more resources and more change but the results can be huge. In addition, this structure allows you to incorporate principles from other areas that can increase the results tremendously.

Six Sigma provides a disciplined method and tools (including statistical) for eliminating errors in a process. Local results can be achieved quickly, larger systemic changes take longer.

Lean & Toyota Production System

Lean principles have helped many organizations become more streamlined over the years. The company most famous for being “lean” is Toyota. Toyota has been benchmarked and is still considered one of the most effective companies in the world. Lean focuses on removing waste. The seven types of waste attacked are:

• Waste of Overproduction
• Waste of Inventory
• Waste of Rework/Rejects
• Waste of Motion
• Waste of Processing
• Waste of Waiting
• Waste of Transport

By identifying and attacking these types of waste the organization becomes “leaner” as the waste slow processes down and consumes valuable resources. A good lean program will also address work management methods which can be substantially different in a service environment compared to a manufacturing environment. Work management addresses how patients, information and material will be “managed” throughout the system. Toyota has made work management models a cornerstone to their success. Examples of tools taught in lean are:

• Value Stream Mapping
• Work Management Methods
• 5S
• Cell Layout

Lean & Toyota Production Systems focus on eliminating waste and developing better work management methods which are a cornerstone to an efficient business. Results typically take longer and happen across the entire process.

Kaizen

Kaizens have not yet hit healthcare with much force, which is surprising since there is an opportunity for rapid improvement from this method. Kaizen is a Japanese word meaning “continuous improvement” but in the US it has become a 1-week hard hitting process that rapidly creates change in a local area. Examples include an admitting area, medical records processing, patient financial services, pre-registration or a clinical area. The goal of a kaizen event is to change the process in such a way that people cannot go back to the old way of doing business. The elements addressed in a kaizen are:

• Errors
• Flow
• Measurements
• Process Management

The focus of the event is on the working team and building a team structure that will focus on the same metrics and goals and have tools to conduct better problem solving as a group. This approach has driven a great deal of success in targeted areas and involves the people actively working in the process. Kaizen activity has a dramatic impact on the culture of a local area. After a kaizen the foundation exists to drive continuous improvement in the process and the motivation and culture to do so has been generated. Business leaders generally like this approach because they can see tangible change quickly.

Kaizens are useful for implementation of larger scale improvement and for driving smaller local change quickly. Results are achieved in 5 days and change is typically visible.

Performance Management

Performance Management is a management system that provides measurements on the key performance areas of the organizational. Metrics are usually designed in areas of:

• Quality
• Cost
• Delivery

The metrics are then deployed through the organization in such a way that they are not transformed or “chopped” up any more than absolutely necessary. This keeps everyone in the organization focused on the same outcomes. In addition to the measurements, there is a standard approach to closing performance gaps using facts and data. This approach is known as “Management by Fact” or MBF. MBF uses a cause and effect logic to break apart the reasons why a goal is not being met and applies actions derived using sound data analysis. It is useful in that it helps leaders prioritize issues to make better decisions around resource allocation.

Performance Management provides a standard measurement system across the organization and a method for managing gaps with data analysis and facts. This provides the motivation to make change sustainable.

Summary

In response to increasing pressures, the healthcare industry is rapidly adopting methods and tools that have been successfully used in other industries. These methods and tools develop healthcare associates to drive process changes thus improving the performance of the organization. Methods that are being deployed in healthcare are:

• Six Sigma
• Lean & Toyota Production Systems
• Kaizen
• Performance Management

For case studies, follow the links below:

• Medical Records
• Medical Supply Management