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A 3-Tier Approach for Using DFSS to Pull and Govern Six Sigma Projects in a Transactional Environment
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A 3-Tier Approach for Using DFSS to Pull and Govern Six Sigma Projects in a Transactional Environment

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  • Satellite Level: Annual Revenue, Profit, Customer Satisfaction, ROx,
    Track as a System: normal noise should be absorbed in these metrics.
    30k foot level:
  • Transcript

    • 1. 1 66σσ66σσ A 3-Tier Approach for Using DFSS to Pull and Govern Six Sigma Projects in a Transactional Environment Leslie Behnke V.P., Six Sigma Business Excellence CIGNA Corporation www.CIGNA.com
    • 2. 2 Agenda  About CIGNA  Integrated Enterprise Excellence and DFSS  CIGNA’s 3-Tier Approach  Enterprise Level DMA  Governance Teams  DMAIC & DMADV Project Teams  Summary and Q&A
    • 3. 3 CIGNA is a National Insurance Provider • CIGNA provides employee benefits, including health care products and services, and group disability, life and accident insurance • $18B annual revenues, with 28,000 employees, and over 200 years of service • Service and highly transactional business; no manufacturing aspects
    • 4. 4 CIGNA’s Six Sigma History is Relatively New • Selected Six Sigma as Enterprise-wide Quality Framework in 2003 – Previous Quality initiatives were localized and centered around accreditation criteria and internal audit functions – Executive recruited from Motorola to lead the new initiative – Leading Six Sigma supplier selected to provide Six Sigma training and technical Support – Comprehensive Quality Framework defined to include statistical methods, Lean tools, strategic quality management and behavioral performance – Senior Leadership support coupled with grass-roots pull deployment strategy. Six Sigma momentum now gaining rapidly
    • 5. 5 • Increasing Pressures: – From Clients and their Employees, to reduce medical costs without impacting quality – From Healthcare Providers, to reduce administrative burdens – From the Competition, to provide the best products and service, at the lowest costs – From the Government, to comply with increasingly complex regulations • Unacceptable Levels of Variability – History of mergers/acquisitions and decentralization had left CIGNA with a proliferation of processes and systems • Increasing Need for Break-through Products and Services – Voice of Customer is demanding altogether new levels of product innovation and service delivery Why DFSS?
    • 6. 6 2004 Objective was to Achieve Significant Results, Fast Use Six Sigma Method to help: – Get 2004 savings from process/productivity improvement – Change culture to have more customer focus and discipline around metrics – Develop future business leaders who understand the end-to-end business processes and have a customer orientation Six Sigma Strengths: – Metrics and fact based – Customer focus – Cross functional process focus – Financial justification Potential Target Areas: – Medical Costs – Operational Expenses – Membership – Service – Systems
    • 7. 7 CIGNA’s Holistic Approach to Implementing Six Sigma • Enterprise Level Define-Measure-Analyze (DMA) Work – End-to-End Process View – Enterprise-Level Metrics – Provides basis for identifying highest areas of improvement opportunity – Provides common context to coordinate and integrate projects • Governance Teams – Key metrics for selected high potential areas, linked to above – Common Quality Assurance framework – Shared, integrated procedures and training • Project Teams – DMAIC, DMADV, Kaizen, other – Specific, strategic projects High Level Define- Measure- Analyze to select target area Governance Level: metrics, QA, P&P’s, Change Mgmt Specific projects: DMAIC, DMADV, Kaizen events DMA Governance DMAIC DMADV Kaizen
    • 8. 8 It all Begins with Targeting the Right Metrics 30,000-Foot-Level Satellite-Level High-level control charts are created • Satellite-level metrics might be reported monthly • 30,000-foot-level metrics might be reported daily High-level control charts are created • Satellite-level metrics might be reported monthly • 30,000-foot-level metrics might be reported daily • Satellite-level® metrics* are high level business metrics • 30,000-foot-level® metrics* are high level operational or Six Sigma/Lean project metrics * Terminology from CIGNA’s Six Sigma provider, Smarter Solutions, Inc..
    • 9. 9 We Start at the Top Receiving and Processing Claims Reconciling and reporting claims payments Establishing structure & eligibility for claims to be processed The End-to-End Claims Process The Enterprise DMA begins by defining the end-to-end process and its key output metrics “30,000 foot” Key Output Metrics: • Claim payment accuracy • Claim payment timeliness • Costs to process claims
    • 10. 10 The General Target Area Gets Selected Receiving and Processing Claims Reconciling and reporting claims payments Establishing structure & eligibility for claims to be processed Sub-processes: • Provider contract design Provider data loading • Benefits structure design • Client benefits structure load • Member eligibility loading Six Sigma tools are employed as part of Enterprise DMA to then select high potential target areas Enterprise DMA: • Key E2E Process Output Metrics • Claim payment accuracy • Claim payment timeliness • Costs to process claims • Voice of Customer • Quality Function Deployment (QFD) • Enterprise-level Cause & Effect Analysis Enterprise DMA: • Key E2E Process Output Metrics • Claim payment accuracy • Claim payment timeliness • Costs to process claims • Voice of Customer • Quality Function Deployment (QFD) • Enterprise-level Cause & Effect Analysis
    • 11. 11 Governance Teams Get Established Receiving and Processing Claims Reconciling and reporting claims payments Establishing structure & eligibility for claims to be processed Sub- processes: • Provider contract design Provider data loading • Benefits structure design • Client benefits structure load • Member eligibility loading Governance Teams are then established to: • Develop lower-level, supporting metrics • Ensure continuous quality improvement structure • Develop policies and a structure for procedures • Facilitate sharing of best practices Key Output Metrics: Direct metrics • Data loading accuracy • Data loading timeliness • Costs to load data Shared Metrics • Provider selection accuracy • Reimbursement accuracy
    • 12. 12 Finally, Teams are Launched at Specific Targets Establishing structure & eligibility for claims to be processed Provider data loading Governance Teams then create project teams • By using info from the Enterprise DMA work • By assessing lower level supporting metrics • By doing mid-level analyses A – (DMAIC) Loading hospital data B – (DMAIC) Loading practitioner data C – (DMADV) Provider Contracting Process
    • 13. 13 Metrics and business needs dictate projects Establishing structure & eligibility for claims to be processed Provider data loading projects A – (DMAIC) Loading hospital data B – (DMAIC) Loading practitioner data C – (DMADV) Provider Contracting Process } Process improvement projects will provide acceptable shorter-term results } Business competition dictates major improvement needed for longer term: • Compliance to standards, yielding major costs savings • Accuracy levels to be improved dramatically • Cycle time to be reduced significantly • Significant technology investment may be required. Key Output Metrics: • Claim accuracy • Claim timeliness • Cost to process
    • 14. 14 DMADV is Guiding the Development of a New Process Analyze & Improve •Audit Contracts •Highlight Risks •Improve Operations •Optimize Contracts •Audit Contracts •Highlight Risks •Improve Operations •Optimize Contracts Renew & Capitalize •Identify Renewals •Initiate Renewals •Author & Close •Identify Renewals •Initiate Renewals •Author & Close Administer & Comply •Manage Payments •Manage Obligations •Ensure Compliance •Manage Payments •Manage Obligations •Ensure Compliance •Collaborative Negotiation •Sign & File •Contracts Drive Supply Chain or Fulfillment Systems •Collaborative Negotiation •Sign & File •Contracts Drive Supply Chain or Fulfillment Systems Negotiate &Execute Create &Control •Easy Authoring •Best Practices and Templates •Business, Language & Terms Controls •Review & Approval •Easy Authoring •Best Practices and Templates •Business, Language & Terms Controls •Review & Approval New Healthcare Provider Contracting Process
    • 15. 15 Internal or external request 1.1 Plan 1.2 Build 1.3 Negotiate 1.4 Execute 1.5 Communicate 1.6 Admin CMSI – Negotiate and Approve Provider Contract 1.1.1 Workload Planning 1.1.2 Situational Assessment 1.1.3 Contract Plan 1.2.1 Financial Analysis 1.2.2 Assemble Reimburse Teams 1.2.3 Assemble Contract Lanaguage 1.2.4 Review & Management Approval 1.3.1 Present 1.3.2 Update 1.3.3 Withdraw/ Terminate 1.4.1 Sign 1.4.2 Distribute and Store 1.5. 1 Communicate to apropriate parties 1.5.2 Communicate to appropiate users 1.6.1 Administer Templates 1.6.2 Administer Internal Organization 1.6.3 Administer External Organization 1.6.4 Administer Reports and Queries 1.6.5 Manage Contracting Process Critical-to-Quality Items are being Built into new Process 1. Capability to support contract negotiation preparation, planning, and contract maintenance. 2. Faster and more comprehensive access to data and documents that support contract negotiations. 3. Faster, easier contract creation and storage. 4. Increase quality of contract content through standards, compliance, and review. 5. Support higher quality negotiations with providers. 6. More robust communication and document routing capability. 7. Ongoing process improvement framework capability.
    • 16. 16 Increase profitable growth Business PrioritiesStrategy High Potential Areas Projects Best Practice Sharing Process (Govern) Reduce Medical Costs Scorecard Development Team (Govern) A Rod L Javit Black/Green Belt Provider Contracting Process B Black R KabooOptimize TPV Networks (DMAIC) Provider Contracting Process (DMADV) N Kidd J Q Public Establish Provider Data Loading Quality Assurance Program (Govern) Provider Site Consolidation (DMAIC) P Luto Contract Billing Process (DMAIC) M Mouse Strategic Business Initiative (SBI) Charts* Show Linkages Laboratory contract loading (DMAIC) G Green Executive Sponsor: T Smith K.Jones J Rogers Hospital contract loading (DMAIC) * Terminology from CIGNA’s Six Sigma provider, Smarter Solutions.
    • 17. 17 Six Sigma is a Catalyst for Delivering Synergy Cross-functional Six Sigma teams enhance communications across divisions, focused on common goals and metrics. • Shared metrics • Common language/approach • powerful statistical tools
    • 18. 18 In Summary • DFSS is more than just DMADV projects – It can be used to help execute business strategy and flow down metrics – It can be used to help select, categorize and prioritize projects • CIGNA is using a 3-Tier approach to Six Sigma deployment, based in part on the overall concepts in DFSS – Enterprise-level DMA – Governance Teams for High Potential Areas – Strategic Projects (DMADV, DMAIC, other) • This is highly applicable in our transactional service business.
    • 19. 19 What questions do you have?