Planning for Health Care’s Unknown Future

The Affordable Care Act
has created angst among health care workers and administrators, not because big changes are coming, but because the impacts of those changes and their accompanying rules are not yet clear. For administrators, this level of uncertainty makes planning seem nearly impossible. Yet, healthcare organizations such as Mayo Clinic and Thedacare are currently developing robust plans for tomorrow, streamlining existing workflows, and delivering better outcomes in care—all while cutting costs, increasing cash flow, and growing the bottom line. How? Lean Six Sigma. A Transformational Approach Lean Six Sigma improves hospital operations with datasupported decision making. The goal is to drive continuous improvement throughout the organization, and in a way that aligns with the hospital’s strategic plan. In health care, Lean Six Sigma focuses on both the process (workflow) and the service itself. When implemented properly, these practices train health care teams to react and adjust to changes efficiently, and even proactively create solutions to future problems. According to David Callen, WTA Lean Six Sigma Expert, Lean Six Sigma projects yield between three and ten times the health care provider’s investment. Financial Gains from Lean Six Sigma Result from: n n n n Eliminating rework, materials, and inventory Avoiding or reworking problematic processes Enhancing productivity and patient care quality Improving patient flow and cash flow

A hospital had accumulated $1.5 million in bad debt and called upon Lean Six Sigma experts to help. Working with a health care billing team, the hospital identified problems in the billing cycle and implemented solutions. One year later, the hospital had positive operating margin cash flow, with an increase of 20% from all Lean Six Sigma projects combined.

Lean Six Sigma methodologies make delivering and planning for high-quality care possible, even in the face of great change. Further, these practices prepare hospitals and staff for the coming changes while incorporating existing requirements from Medicare/Medicaid, ACO, avoidable adverse events, and much more.
Planning for Healthcare’s Unknown Future © WillowTree Advisors, LLC 2013 2

A group of the hospital’s medical. As a direct result of these Lean Six Sigma improvements. for every 100 patient accounts processed. Auxiliary departments (radiology. The data revealed that for every 100 minutes spent processing patient accounts. billing. A Clear Solution The hospital team worked with Lean Six Sigma Experts. 75 had defective information. and respiratory therapy) also tracked information they received from the ER. LLC 2013 3 . Planning for Healthcare’s Unknown Future © WillowTree Advisors. 55 were for rework.000 in soft dollars or productivity. the teams developed a Value Stream Map to detail the steps involved in registering a patient. medical records. which required rework. now took only one. and billing department employees. which used to take three days. clinical lab. Further. Mapping the Value Stream Working with Lean Six Sigma experts. pharmacy. Measurable Results Minutes of rework were reduced by 75% and the number of defects was reduced more than threefold. helping the teams identify waste. Also. which led to excessive rework from auxiliary. The Value Stream Map served as a point of reference. long wait times. and defects in their workflow.Emergency Department Revenue Cycle Improvement: A Success Story Hospital administrators noticed defects in patient medical and registration entries. to create an action plan for developing a software training curriculum and standard operating procedures for employees to follow during registration. They learned the causes of waste were 1) insufficient software training and 2) no established “standard operating procedure” for entering patient data into the software program. from arriving in the ER to mailing the final bill for services. and stakeholder decision makers worked with Lean Six Sigma experts to set a goal of reducing defects and time spent by 50%. updates to medical records. the hospital saved more than $175. as well as the hospital’s technology staff. This greatly improved quality of care for patients who required follow-up treatment after the ER. They divided into two teams to separately address 1) registration-related account processing issues and 2) medical informationrelated account processing issues. This project also led to the formation of a software information team of nurses to address changing medical codes and software applications on a regular basis. and other patient data entries. Each team collected data from patient registration and medical information workflows for 5 days. financial.

Lean Six Sigma Projects in Healthcare n Increase admissions n Enhance workflow efficiency n Reduce poor use of materials n Minimize deficiencies n Improve planning and scheduling of human resources n Make better use of facilities and equipment Typically. our team comprises over 40 professional advisors and technology experts with significant experience in change management. and purchasing/supply chain management. contact Kathryn Douglass at (888) 998-0008 or visit www. Lean and Six Sigma improvement. manufacturing. We have worked with state. Many of us are university instructors in quality management. Headquartered in Denver with services offered across the country. Certified Purchasing Manager. local. cross-industry solution. patient care performance. Lean business transformation. and in industries such as health care. hard-to-diagnose problems that whittle away at hospital revenue.Chief Operating Officer To learn more about Lean Six Sigma Health Care Projects. About WillowTree Advisors.” . We also volunteer for Rocky Mountain Performance Excellence (RMPEx) and as National Baldrige Award examiners. high tech. but WillowTree Advisors has shocked me out of my paradigm. as well as a 50% improvement in the quality of care. Lean. LLC 2013 4 . and private firms. and caregiver morale. leadership development. and federal agencies. and others—and work with business and quality methodologies including MBO and TQM management strategies. Planning for Healthcare’s Unknown Future © WillowTree Advisors. Our team members hold numerous certifications—Six Sigma.willowtreeadvisors. We incorporate best practices from the health care sector and beyond. “I didn’t think at my age that I could be shocked. and team building. Lean Six Sigma is especially helpful for those ongoing. aviation and transportation. small business specializing organizational transformations.Doing More with Less Hospitals and clinical health care settings can reap big rewards from a wide variety of projects. Six Sigma. Lean Six Sigma projects yield between three and ten times the health care provider’s investment. for a PMP ITIL. LLC We are a woman-owned.