Scott Hencshel Process Improvement the Engine that Drives Strategy

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Scott Hencshel Process Improvement the Engine that Drives Strategy

  1. 1. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Process Improvement: The Engine That Drives Strategy David “Scott” Hencshel President, Potentia, LLC
  2. 2. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Pearls • To Stop • Lean Six Sigma project? Really? • Six Sigma as a verb • Automation = wrong things faster • Lead vs. manage change
  3. 3. Copyright (C) POTENTIA LLC 2012. All Rights Reserved The “Evolution” of Quality and Continuous Improvement W. Edwards Deming Statistical Process Control Frederick Taylor Henry Ford Lean Six Sigma TQM Eli Whitney Shingo
  4. 4. Copyright (C) POTENTIA LLC 2012. All Rights Reserved What is Lean Six Sigma • Lean Methods: – Remove non-value added waste – Improved speed or process lead time • Six Sigma Methods: – Grounded in the DMAIC methodology – Attacks variation – Improved quality • Combined, Lean and Six Sigma – Faster cycle times, decreased costs, and improved quality – More satisfied customers
  5. 5. Copyright (C) POTENTIA LLC 2012. All Rights Reserved We Know That . . . . • Lean Six Sigma is a compilation of useful tools to gather, measure and analyze data. • Not all tools need to be used for all projects. • While Lean Six Sigma provides a very specific roadmap for process improvement it also allows flexibility based on the needs of the organization.
  6. 6. Copyright (C) POTENTIA LLC 2012. All Rights Reserved 100% of all changes evaluated as “Successful” had a good technical solution or approach Over 98% of all changes evaluated as “Unsuccessful” also had a good technical solution or approach What is the differentiating factor between success and failure? Change
  7. 7. Copyright (C) POTENTIA LLC 2012. All Rights Reserved E = Q x A2 Effectiveness Quality (Accountability x Acceptance) Lean and Six Sigma Balanced Scorecard Change Effective Results People Change Equation
  8. 8. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Case Study • Medical practice in San Antonio, Texas. • One Doctor, One Nurse Practitioner, and 8 support staff. • Two major problems – Patient complaints – Hemorrhaging money
  9. 9. Copyright (C) POTENTIA LLC 2012. All Rights Reserved What We Found • Physical disorder and clutter • Poor medical record accountability and storage • Sub-optimal layout • Little or no understanding of processes • Absence of metrics • Poisoned work environment – Lack of standards – Favoritism – Gossip • No shared Vision
  10. 10. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Our mandate… • Improve the patient experience • Stop the bleeding ($ and time) • Increase revenue • Get better organized • Better understand how we conduct business • Measure our work • Make the clinic a sought after place to work
  11. 11. Copyright (C) POTENTIA LLC 2012. All Rights Reserved It Starts with Culture Change • What makes Lean Six Sigma truly different from other process improvement methodologies is that it is not just a series of tools; it is a mindset, a way of viewing and understanding your business and your work. • We must train our employees to not look at their work the same way ever again. – Return better equipped to identify problems – Be able to map and analyze their work – Be able to identify and eliminate non-value added process steps and activities – Be able to measure their work and results – Be more efficient and effective in everything they do
  12. 12. Copyright (C) POTENTIA LLC 2012. All Rights Reserved “Imaginnovation” Training
  13. 13. Copyright (C) POTENTIA LLC 2012. All Rights Reserved What We Found • Physical disorder and clutter • Poor medical record accountability and storage • Sub-optimal layout • Little or no understanding of processes • Absences of metrics • Poisoned work environment – Lack of standards – Favoritism – Gossip • No shared Vision
  14. 14. Copyright (C) POTENTIA LLC 2012. All Rights Reserved
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  19. 19. Copyright (C) POTENTIA LLC 2012. All Rights Reserved What is 5S?  A Lean Tool developed by the Japanese  Foundation for continuous improvement  5S Process creates an organized, clean and safe workplace  Anyone can distinguish between normal and abnormal conditions at a glance  5S involves employee participation
  20. 20. Copyright (C) POTENTIA LLC 2012. All Rights Reserved The 5S’s Sort Set in Order Shine Standardize Sustain
  21. 21. Copyright (C) POTENTIA LLC 2012. All Rights Reserved 5S Benefits • Creates organized workplaces • Improve retrieval time of documents • Reduce turnaround time to patients/customers • Identifies waste so it can be eliminated • Employee productivity and efficiency enhanced • Provides ever ready patient/customer showcase • Produces fewer defects and lost Information
  22. 22. Copyright (C) POTENTIA LLC 2012. All Rights Reserved 5S Underway
  23. 23. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Before
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  27. 27. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Before
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  29. 29. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Before
  30. 30. Copyright (C) POTENTIA LLC 2012. All Rights Reserved After
  31. 31. Copyright (C) POTENTIA LLC 2012. All Rights Reserved What We Found • Physical disorder and clutter • Poor medical record accountability and storage • Sub-optimal layout • Little or no understanding of processes • Absences of metrics • Poisoned work environment – Lack of standards – Favoritism – Gossip • No shared Vision
  32. 32. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Current Layout and Traffic Flow
  33. 33. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Front DeskResearch Office / Exam Codie | Matt Lab Records Room (with desk area if needed) Dr. T Office Lab and Research Storage Bathroom Dr. T Exam Room Dr. T Exam Room CEO / Kim Quotient Room David Office David Exam Room Conference Room Waiting Room Foyer Foyer Indicates that it probably ain’t moving Supply / IT Research Office / Exam Research Office / Exam Linda Shavon | Nich Jorge Proposed Layout and Traffic Flow
  34. 34. Copyright (C) POTENTIA LLC 2012. All Rights Reserved What We Found • Physical disorder and clutter • Poor medical record accountability and storage • Sub-optimal layout • Little or no understanding of processes • Absences of metrics • Poisoned work environment – Lack of standards – Favoritism – Gossip • No shared Vision
  35. 35. Copyright (C) POTENTIA LLC 2012. All Rights Reserved To know thy work and to know thy processes you must map!
  36. 36. Copyright (C) POTENTIA LLC 2012. All Rights Reserved A “team” sport Visualize the work Process Mapping Identify improvement opportunities Eliminate the waste and make improvements
  37. 37. Receive Friend Request Do I know this Person? Add to Friends list Ignore Request Do I like this Person? START END END No No Yes Yes
  38. 38. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Superbill created Procedures codes have to be written in (they are not listed on the Superbill) Completed by the Quotient Tech Procedure codes used (one for the test and one for the interpretation: 96118 96120 Dr. T. enteres the diagnosis codes: Existing patients must use code from last visit New patients will be assigned diagnosis code after seeing Dr. T. Superbills are included in the packet of Superbills that are sent from TAPN to CPS (billing contractor) Will the insurance pay? Balance transferred to the patient (CPS bills the patient Yes No Quotient Billing Process (Draft)Basic Process Map
  39. 39. Copyright (C) POTENTIA LLC 2012. All Rights Reserved PROCESS XYZ PatientExperienceTeamPatientQuotientTechProvider · Provider requests Quotient Testing · Fills out Quotient Test Order Sheet with diagnosis codes · Diagnosis Codes are: 314.00 314.01 348.3 388.40 · Schedules patient · Provide “Benefits Advisory Notice” to patient Patient reads and signs “Benefits Advisory Notice”. · Takes patient height and weight. · Set up Quotient Machine · Input patient data Takes practice test on Quotient Machine (with parent present, 30 sec test) Is observer needed for actual test? Takes actual test on Quotient Machine (15-25 min depending on age) Observe patient take test Print results Diagnosis codes by provider. Test performed immediately? Prepares Super bill Prepares Super bill No Yes Collect Flat Rate Fee ($75) Yes No Annotate Procedure Code on Super bill · Schedule follow-up appointment with NP within one week. · Verify Super bill is complete. · Make copy of original order and Super bill and place in auditing folder. · Place original Super bill and order in Billing File. · Place test results in Patient Folder for follow-up appointment Collecting fee upfront ensures no loss. Swim Lane Map
  40. 40. Copyright (C) POTENTIA LLC 2012. All Rights Reserved What We Found • Physical disorder and clutter • Poor medical record accountability and storage • Sub-optimal layout • Little or no understanding of processes • Absence of metrics • Poisoned work environment – Lack of standards – Favoritism – Gossip • No shared Vision
  41. 41. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Focus on Billing • The Superbill is how we get paid • Team identified 7 Superbill defects. – Insurance verification not accomplished – CPT Code missing – Diagnosis Code missing – No Referral attached – Balance owed but not collected – Co-Pay not collected – New patient with demographics and copy of front and back of insurance card missing
  42. 42. Copyright (C) POTENTIA LLC 2012. All Rights Reserved A Measure of Process Capability Is Sigma Quality Level (SQL) Sigma is the Greek letter and a statistical unit of measurement that describes the variability or spread of data (the standard deviation of a population). Six Sigma refers to a methodology of continuous improvement where the goal is to improve process performance to meet customers’ requirements. This is what you are learning about today. Sigma Quality Level is a measure of process performance with respect to customer requirements.
  43. 43. Copyright (C) POTENTIA LLC 2012. All Rights Reserved The Goal of Six Sigma is ...  Are your processes at six sigma?  How about pharmacy transactions?  How about the operating room?  Airline processes? s DPMO* Yield 6 3.4 99.9997% 5 233 99.977% 4 6,210 99.379% 3 66,807 93.32% 2 308,537 69.2% 1 690,000 31% * Defects Per Million Opportunities Not every process needs to be at a Six Sigma Quality Level!
  44. 44. Copyright (C) POTENTIA LLC 2012. All Rights Reserved How to Calculate Sigma Quality Level
  45. 45. Copyright (C) POTENTIA LLC 2012. All Rights Reserved SQL Calculator Number of defect opportunites (O) per Superbill. This is a fixed number. O = 7 Total number (N) of Superbills processed. N = 446 Total number of Superbill defects (D). D = 48 This is the calculated number of Defects per Opportunity DPO = D/(NxO) 0.01537476 Calculated number of Superbill Defects Per Million Opportunities (DPMO). DPMO = DPO x 1,000,000 15374.75977 This is your Sigma Quality Level. Process Sigma = 3.66 Superbill Sigma Quality Level (SQL) Calculator
  46. 46. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Sigma Quality Level Conversion Table Yield DPMO Sigma 6.6% 934,000 0 8.0% 920,000 0.1 10.0% 900,000 0.2 12.0% 880,000 0.3 14.0% 860,000 0.4 16.0% 840,000 0.5 19.0% 810,000 0.6 22.0% 780,000 0.7 25.0% 750,000 0.8 28.0% 720,000 0.9 31.0% 690,000 1 35.0% 650,000 1.1 39.0% 610,000 1.2 43.0% 570,000 1.3 46.0% 540,000 1.4 50.0% 500,000 1.5 54.0% 460,000 1.6 58.0% 420,000 1.7 61.8% 382,000 1.8 65.6% 344,000 1.9 Yield DPMO Sigma Yield DPMO Sigma 69.2% 308,000 2 72.6% 274,000 2.1 75.8% 242,000 2.2 78.8% 212,000 2.3 81.6% 184,000 2.4 84.2% 158,000 2.5 86.5% 135,000 2.6 88.5% 115,000 2.7 90.3% 96,800 2.8 91.9% 80,800 2.9 93.3% 66,800 3 94.5% 54,800 3.1 95.5% 44,600 3.2 96.4% 35,900 3.3 97.1% 28,700 3.4 97.7% 22,700 3.5 98.2% 17,800 3.6 98.6% 13,900 3.7 98.9% 10,700 3.8 99.2% 8,190 3.9 Yield DPMO Sigma Yield DPMO Sigma 99.4% 6,210 4 99.5% 4,660 4.1 99.7% 3,460 4.2 99.75% 2,550 4.3 99.81% 1,860 4.4 99.87% 1,350 4.5 99.90% 960 4.6 99.93% 680 4.7 99.95% 480 4.8 99.97% 330 4.9 99.977% 230 5 99.985% 150 5.1 99.990% 100 5.2 99.993% 70 5.3 99.996% 40 5.4 99.997% 30 5.5 99.9980% 20 5.6 99.9990% 10 5.7 99.9992% 8 5.8 99.9995% 5 5.9 99.99966% 3.4 6 Yield DPMO Sigma
  47. 47. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Count 19 14 5 5 3 2 Percent 39.6 29.2 10.4 10.4 6.3 4.2 Cum % 39.6 68.8 79.2 89.6 95.8 100.0 Count Percent Type of Defect O ther Balance Collected Diagnosis Code Co-pay Referral No insurance verif 50 40 30 20 10 0 100 80 60 40 20 0 Pareto Chart of Superbill Defect Types Pareto Chart
  48. 48. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Five Months Later . . . . .
  49. 49. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Month AmountinDollars($) OctoberSeptemberAugustJulyJuneMayAprilMarchFebruaryJanuary 17500 15000 12500 10000 7500 5000 16377.17 10253.68 15584.94 11836.51 10740.36 9996.85 5765.97 5993.295995.28 7324.37 Time Series Plot of TAPN Front Desk Collections (2012) Our improvement efforts began here Wow!
  50. 50. Copyright (C) POTENTIA LLC 2012. All Rights Reserved The Way Ahead • Implement improved clinic layout – Relocate Records Room to current Storage Room – Storage Room becomes Supply Room – Exam Rooms move to current Research area – Research area moves to current Exam Rooms – Establish a dedicated Employee Break Room (in progress) • Reassign/refresh employee duties and responsibilities – Create “Patient Experience Team” – Create Office Administrator – Institute a time card system – Create job descriptions (metrics to follow) – Re-sign the Employee Manual (all employees) • Improve/increase Quotient Machine utilization (Kaizen)
  51. 51. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Front Desk Research Office / Exam Codie | Matt Lab Records Room (with desk area if needed) Dr. T Office Lab and Research Storage Bathroom Dr. T Exam Room Dr. T Exam Room CEO / Kim Quotient Room David Office David Exam Room Conference Room Waiting Room Foyer Foyer Indicates that it probably ain’t moving Supply / IT Research Office / Exam Research Office / Exam Linda Shavon | Nich Jorge Patient Experience Team
  52. 52. Objective: Increase Profitability Definition: Be profitable
  53. 53. TAPN Executive Council Comments/Decision Required Measure Performance History Initiative/s Objective: Measure: Data Dictionary Increase Profitability Defects---% insurance verification prior to appointment (5 days) Item $ Time % complete Overall Status Create documentation for insurance verification. Train PET. 0 Period Covered Target Actual Difference 1 Jul – 31 Jul 2012 0% 39.6% 39.6% Count 19 14 5 5 3 2 Percent 39.6 29.2 10.4 10.4 6.3 4.2 Cum % 39.6 68.8 79.2 89.6 95.8 100.0 Count Percent Type of Defect O ther Balance Collected Diagnosis Code Co-pay Referral No insurance verif 50 40 30 20 10 0 100 80 60 40 20 0 Pareto Chart of Superbill Defect Types 446 Superbills processed during this period and there were 48 defects. 19 of the 48 defects were insurance verification. Insurance verification accounts for 39.6% of all defects.
  54. 54. TAPN Executive Council Comments/Decision Required Measure Performance History Initiative/s Objective: Measure: Data Dictionary Increase Profitability Defects---% of referrals validated prior to appointment Item $ Time % complete Overall Status Scan referrals into Centricity 0 Develop Centricity referral expiration system 0 Period Covered Target Actual Difference 1 Jul – 31 Jul 2012 0% 29.2% 29.2% Count 19 14 5 5 3 2 Percent 39.6 29.2 10.4 10.4 6.3 4.2 Cum % 39.6 68.8 79.2 89.6 95.8 100.0 Count Percent Type of Defect O ther Balance Collected Diagnosis Code Co-pay Referral No insurance verif 50 40 30 20 10 0 100 80 60 40 20 0 Pareto Chart of Superbill Defect Types 446 Superbills processed during this period and there were 48 defects. 14 of the 48 defects were non-validated referrals. Non-validated referrals account for 29.2% of all defects.
  55. 55. Objective: Increase Organizational Efficiency and Standardization Definition: Identify, create, or modify and institutionalize processes that increase our efficiency and effectiveness.
  56. 56. TAPN Executive Council Comments/Decision Required Measure Performance History Initiative/s Objective: Measure: Data Dictionary Increase Organizational Efficiency and Standardization Overall Superbill Sigma Quality Level and Pareto of Defects Item $ Time % complete Overall Status Create Superbill SQL Calculator 100 Baseline Sigma Quality Level (SQL) 100 Period Covered Target SQL Actual SQL Difference 30 Jul – 28 Aug 2012 4.0 3.66 .4 • 446 Superbills were measured during this period. • There are 7 Superbill defects per Superbill: • Insurance verification • CPT Code • Diagnosis Code • Referral attached • Balance collected • Co-Pay collected • New patient with demographics and front and back of insurance card • Recommend SQL target of 4.0. Remember that 6 Sigma SQL is only 3.4 Defects Per Million Opportunities (DPMO). We are at 15,374 DPMO.
  57. 57. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Lessons Learned • Must have a Strategy and Vision (shared) or you will just have a bunch of people at work. • Must create a culture of continuous process improvement. • Lean Six Sigma (methodology) serves as the both the methodology and engine that drives clarity around the strategy and the metrics that most reflect success with that strategy.
  58. 58. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Vision: An new clinic layout that enhances the patient experience and optimizes staff performance. • Staff interaction • Staff communication • Communication • Staff help (each other) • Efficient work processes • Better office flow • Positive flow • Patient centered focus • Oversight of Dr. NPA clinic status (whereabouts) • Efficient records retrieval • Records retrieved in a more timely fashion • Increased “shoe life” • More privacy (HIPPA) • Boost in staff morale • Patient “happiness” • Research will have more space • Friction from staff as things move • Research has dedicated fax machine • Transportation • Record retrieval time • Excess motion • Transporting • Running around • Wear and tear on the shoes • Wasted time • Searching • Wait times • Delays • Patient complaining • Complaints from patients • Patient complaints • Complaints from Dr. and NPA • Frustration from the staff • Duplication (multiple people looking for the same thing) • Lost charts • Scattering of records throughout the clinic • Room to operate (smaller than current situation) If we do this we can expect . . . . . More of . . . Less of . . .
  59. 59. Copyright (C) POTENTIA LLC 2012. All Rights Reserved Questions

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