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A Better Hospital                       In Five Days                  Jay Arthur  (888) 468-1537                      Webi...
A Better Hospital in Five Days          2 Sigma 30% defects 300,000PPMYou Are Here     3-4 Sigma 3% defects   30,000 PPM  ...
Preventable Deaths per Week                                      1 in 6 Patients suffers a                                ...
Your Hospital Factory                 Marketing and Sales                   Your “Factory”      Orders, Invoicing, Purchas...
The Fix-It Factory      Your Hospital        Your Patients & Payors                 The Fix-It Factory              $ $ $ ...
Defects - The 4-50 Rule Myth: The wider you spread it, the greater the returns   To increase returns, narrow your focus   ...
The Long Tail of LSS Tools                    Hospitals do not need every tool                       in the Six Sigma tool...
Six Sigma Process              Defects                DeviationCount                                              Measure ...
Focus (Define and Measure)     Focus your efforts in ways that achieve     breakthrough improvements in speed,     quality...
Improve (Analyze and Improve)     Use data to identify and eliminate root causes     of problems involving time, defects a...
Focus on PerformanceStart with a control chart of defects, mistakes, errors or cost:                                      ...
Use Paretos to Find What to Fix                   Sponges accounted for                   67.6% of RFOs© MMIX KnowWarewww....
Initiate Root Cause Teams Identify subject experts to analyze the problem Schedule half or one day root cause analysis ses...
Root Cause Analysis (RCA)                 Materials             Process       Sponges                             Counting...
Verify Results (Before vs After)Changedprocess forcounting andtrackingsurgicalsupplies andinstruments. Extendedtime betwee...
Eliminating Never Events  Track each Never Event with g chart  Use Pareto Charts to analyze most  common contributor to Ne...
A Better OR in Two Minutes  WHO Surgical Checklist: www.who.int/patientsafety/safesurgery/en/© MMIX KnowWarewww.qimacros.c...
OR Checklist Results  Reduced major complications by 36%,  Reduced deaths by 47%  Reduced patients returning to the OR by ...
A Cheaper (More Profitable)         Hospital in Five Days        Sales   $$                  $$                           ...
Focus on PerformanceStart with a control chart of defects, mistakes, errors or costs:                                     ...
Go Deeper – Apply the 4-50 Rule   4% of the Process Results in over 50% of the Errors© MMIX KnowWarewww.qimacros.com      ...
Use Paretos to Find What to Fix                                                  Denial-No Appeal Charges             n=12...
Use Paretos to Find What to Fix                                                          Denials for Timely Filing by Insu...
Identify Root Causes     Use the fishbone diagram to perform root cause analysis:              Medical Necessity          ...
Countermeasures                (Mistake Proofing)  Countermeasure      Work with insurance company to resolve       exces...
Verify Results    Reduced denials by 35% starting the     following Monday ($380,000/month)© MMIX KnowWarewww.qimacros.com...
Tips for a Good Improvement Story     Control Chart                     Paretos                              Action       ...
Sustain (Control) Statistical Process Control (SPC)Tools      Control Charts –       Analyze your data to determine proce...
Secret to Faster, Better,         Cheaper Healthcare   Focus on “mission and profit critical” problems   Set BHAGs -Big Ha...
Implementing Faster, Better, Cheaper             Crawl-Walk-Run to Success• Start small for big results• Engage informal l...
Patient Satisfaction = Profits  To accelerate your speed…      Eliminate unnecessary delay and movement       (3-57 Rule)...
Resources for Faster, Better,      Cheaper Healthcare               QI Macros Software for Excel               Control Cha...
Free Resources and Contact InfoLean Six Sigma Money Belt Training: www.lssmb.comLean Six Sigma for Hospitals Linkedin Grou...
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A Better Hospital in Five Days

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How to use the Magnificient Seven tools of Six Sigma to eliminate clinical and operational mistakes and errors that waste time and devour profits.
Case studies include retained foreign objects (surgical) and denied insurance claims (financial).

Published in: Business, Technology
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A Better Hospital in Five Days

  1. 1. A Better Hospital In Five Days Jay Arthur (888) 468-1537 Webinar:www.qimacros.com/training/qi-macros-webinar/#healthcare Lean Six Sigma for Hospitals!© MMIX KnowWare www.qimacros.com 1
  2. 2. A Better Hospital in Five Days 2 Sigma 30% defects 300,000PPMYou Are Here 3-4 Sigma 3% defects 30,000 PPM 5 Sigma .03 defects 300 PPM 6 Sigma .00003 defects 3 PPM © MMIX KnowWarewww.qimacros.com 2
  3. 3. Preventable Deaths per Week 1 in 6 Patients suffers a complication from their treatment -Don Berwick 1 in 100 die from it. Surgical Medication Errors Infections© MMIX KnowWarewww.qimacros.com 3
  4. 4. Your Hospital Factory Marketing and Sales Your “Factory” Orders, Invoicing, Purchasing and Payments© MMIX KnowWarewww.qimacros.com 4
  5. 5. The Fix-It Factory Your Hospital Your Patients & Payors The Fix-It Factory $ $ $ $ $ $ $ $ $ $© MMIX KnowWarewww.qimacros.com 5
  6. 6. Defects - The 4-50 Rule Myth: The wider you spread it, the greater the returns To increase returns, narrow your focus 4-50 rule - (20/80)2 4% of business causes over 50% of waste and rework Rule #3: To increase returns, narrow your focus. Power Distribution© MMIX KnowWarewww.qimacros.com 6
  7. 7. The Long Tail of LSS Tools Hospitals do not need every tool in the Six Sigma toolbox, only the Magnificent Seven! Master the Top 4%© MMIX KnowWarewww.qimacros.com 7
  8. 8. Six Sigma Process Defects DeviationCount Measure (time) Control Chart Control Chart LSL USLCategorize Pareto HistogramCorrect Fishbone Fishbone © MMIX KnowWarewww.qimacros.com 8
  9. 9. Focus (Define and Measure) Focus your efforts in ways that achieve breakthrough improvements in speed, quality and cost. Control Chart Pareto© MMIX KnowWarewww.qimacros.com 9
  10. 10. Improve (Analyze and Improve) Use data to identify and eliminate root causes of problems involving time, defects and cost. 4% of your business causes 50% of the waste, rework and lost profit.Tools – Why? Why? Why? Why? Why? Action Countermeasures Fishbone Matrix© MMIX KnowWarewww.qimacros.com 10
  11. 11. Focus on PerformanceStart with a control chart of defects, mistakes, errors or cost: In 2005, the Mayo Clinic Rochester averaged one RFO every 16 days.© MMIX KnowWarewww.qimacros.com 11
  12. 12. Use Paretos to Find What to Fix Sponges accounted for 67.6% of RFOs© MMIX KnowWarewww.qimacros.com 12
  13. 13. Initiate Root Cause Teams Identify subject experts to analyze the problem Schedule half or one day root cause analysis sessions for each “big bar” of the pareto chart. Analyze the root causes, validate they really are the root causes, and identify solutions. Develop action plan to implement the solutions Measure and validate the results as you implement solutions Rule #4: Use SWAT teams of experts.© MMIX KnowWarewww.qimacros.com 13
  14. 14. Root Cause Analysis (RCA) Materials Process Sponges Counting Supplies Problem In/Out Statement Sponges accounted for 67.6% of RFOs People Machines© MMIX KnowWarewww.qimacros.com 14
  15. 15. Verify Results (Before vs After)Changedprocess forcounting andtrackingsurgicalsupplies andinstruments. Extendedtime betweenRFOs to 69days. © MMIX KnowWarewww.qimacros.com 15
  16. 16. Eliminating Never Events Track each Never Event with g chart Use Pareto Charts to analyze most common contributor to Never Event Analyze root causes of “big bar” of Never Event. Implement countermeasures and verify results. Monitor improvement forever.© MMIX KnowWarewww.qimacros.com 16
  17. 17. A Better OR in Two Minutes WHO Surgical Checklist: www.who.int/patientsafety/safesurgery/en/© MMIX KnowWarewww.qimacros.com 17
  18. 18. OR Checklist Results Reduced major complications by 36%, Reduced deaths by 47% Reduced patients returning to the OR by 25%. OR nurse turnover, dropped from 23 percent to 7 percent Employee satisfaction rose 19%© MMIX KnowWarewww.qimacros.com 18
  19. 19. A Cheaper (More Profitable) Hospital in Five Days Sales $$ $$ Delay 33% Defects $25% $ People Deviation60% 67% $ Expenses© MMIX KnowWarewww.qimacros.com 19
  20. 20. Focus on PerformanceStart with a control chart of defects, mistakes, errors or costs: Charges Coded as Denials $3,000,000 UCL $2,552,122 $2,500,000 $2,000,000 $1,500,000 Denials (E) UCL CL $1,071,509 +2 Sigma Charges +1 Sigma $1,000,000 Average -1 Sigma -2 Sigma $500,000 LCL $- LCL $(409,103) $(500,000)10/02 11/02 12/02 01/03 02/03 03/03 04/03 05/03 06/03 07/03 08/03 09/03 $(1,000,000) 2002-2003© MMIX KnowWarewww.qimacros.com 20
  21. 21. Go Deeper – Apply the 4-50 Rule 4% of the Process Results in over 50% of the Errors© MMIX KnowWarewww.qimacros.com 21
  22. 22. Use Paretos to Find What to Fix Denial-No Appeal Charges n=12858108.93 $12,858,109 99% 100% 100% 97% 91% 90% $11,250,845 81% 80% $9,643,582 70% $7,849,569 $8,036,318 61% 60% 61% of Denied Claims Amount $6,429,054 50% Due to Untimely Filing 40% $4,821,791 30% $3,214,527 $2,516,508 20% $1,607,264 $1,295,032 $750,766 10% $336,270 $109,813 $150 $- 0% Timely Filing Medical No Auth Partial Auth Invalid Auth ET ES Necessity Memo Code© MMIX KnowWarewww.qimacros.com 22
  23. 23. Use Paretos to Find What to Fix Denials for Timely Filing by Insurer n=778 778 99% 99% 100% 100% 100% 100% 96% 98% 94% 93% 90% 90% 680.75 87% 84% 81% 80% 583.5 75% 70% 501 64% 486.25 Number of Denials 60% 64% of Denied Due to 389 50% Timely Filing Claims Due 40% 291.75 to one Insurer 30% 194.5 20% 97.25 81 45 10% 27 24 24 18 15 14 11 7 4 4 1 1 1 0 0% Ins 1 Ins 2 Ins 3 Ins 4 Ins 5 Ins 6 Ins 7 Ins 8 Ins 9 Ins 10 Ins 11 Ins 12 Ins 13 Ins 14 Ins 15 Ins 16 Payer© MMIX KnowWarewww.qimacros.com 23
  24. 24. Identify Root Causes Use the fishbone diagram to perform root cause analysis: Medical Necessity ER In Patient Problem Statement No Auth Timely Filing 64% of One Payor accounted for 64% Reauthorization Denials Payor Psych© MMIX KnowWarewww.qimacros.com 24
  25. 25. Countermeasures (Mistake Proofing) Countermeasure  Work with insurance company to resolve excessive denials  Reduce delays that contribute to timely filling denials© MMIX KnowWarewww.qimacros.com 25
  26. 26. Verify Results Reduced denials by 35% starting the following Monday ($380,000/month)© MMIX KnowWarewww.qimacros.com 26
  27. 27. Tips for a Good Improvement Story Control Chart Paretos Action Countermeasures Control Chart withRoot Cause Analysis Matrix Process Change Make Sure Your Story Contains all of the Critical Elements© MMIX KnowWarewww.qimacros.com 27
  28. 28. Sustain (Control) Statistical Process Control (SPC)Tools  Control Charts – Analyze your data to determine process stability. Is your X a C a t T le B r h r it 0 6 .8 U L 0 1 C = .8 9 process consistent and predictable? Identify and research 0 1 .8 X v g A era e u br U L C Nme 0 6 .7 A B A rag ve e C = .7 6 L 0 1 unstable points and conditions. B 0 1 .7 A L L C 0 6 .6 L L 0 1 C = .6 3 Histograms– 6 08 m 6 18 m 6 28 m 6 58 m 6 68 m 6 8m 6 8m 0 1 .6 0m 0m 12 m 0m 1 m 1 pm 2 m 0m 0m 2 m 0m 2 m m pm 2 m 2 m 2 m 2 m /1 a /1 a /1 a /1 a /1 a /8 a /9 a p 2p 1 a 1 a 1 a 1 a 1 a 1 a 1 p 1 p 1 p 2p p p p p 2 2  D te i e Pe i d u b r a /Tm / r o /N m e Determine the distribution of measurable data and the Histogram capability of your process to meet customer requirements. n= 4 8 25 LSL= - 2 4 M e dia n = 0 USL= 2 4 Cp( sigm a ) = 1 .0 Cpk ( sigm a ) = 1 .0 Cp( Rd 2 ) = 1 .2 Flowcharts – Cpk ( Rd2 ) = 1 .2 20  Pp= 1 .0 Ppk = 1 .0 Sigm a= 8 .0 15 Show the improved process including all activities, decisions Number Mean= 0 10 and measurement points. 5 0 -24 to -18 -18 to -12 -12 to -6 -6 to 0 0 to 6 6 to 12 12 to 18 18 to 24 24 to 30 Values© MMIX KnowWarewww.qimacros.com 28
  29. 29. Secret to Faster, Better, Cheaper Healthcare Focus on “mission and profit critical” problems Set BHAGs -Big Hairy Audacious Goals to reduce defects, delay, deviation or cost by 50% or more in six months or less. Simplify and Streamline: Focus on removing NVA—Non-value added Optimize—Eliminate Defects and Deviation Implement solutions and verify results© MMIX KnowWarewww.qimacros.com 29
  30. 30. Implementing Faster, Better, Cheaper Crawl-Walk-Run to Success• Start small for big results• Engage informal leaders• Use the 3-57 and 4-50 rules Power Laws (4-50 rule)© MMIX KnowWarewww.qimacros.com 30
  31. 31. Patient Satisfaction = Profits To accelerate your speed…  Eliminate unnecessary delay and movement (3-57 Rule) To increase your returns…  Narrow your focus (4-50 rule) To engage your people..  Reduce the number of people involved  Engage informal not formal network© MMIX KnowWarewww.qimacros.com 31
  32. 32. Resources for Faster, Better, Cheaper Healthcare QI Macros Software for Excel Control Charts, Paretos, Fishbones and more Project and Data Analysis Team Facilitation Lean Six Sigma Training Lean Six Sigma Systems for Faster, Better, Cheaper Healthcare© MMIX KnowWarewww.qimacros.com 32
  33. 33. Free Resources and Contact InfoLean Six Sigma Money Belt Training: www.lssmb.comLean Six Sigma for Hospitals Linkedin Group30 Day Eval Copy of the QI Macros –qimacros.com/freestuff.htmlAction Plan: qimacros.com/pdf/six-sigma-action-plan.pdfLean Six Sigma Reference Card: qimacros.com/JobAid.pdfDirty 30 Process for Six Sigma Software: qimacros.com/pdf/dirty30.pdfHandout: qimacros.com/pdf/faster-better-cheaper-healthcare.pdfJay ArthurKnowWare® International2253 S. Oneida St. Ste 3DDenver, CO 80224(888) 468-1537jay@qimacros.comwww.qimacros.com© MMIX KnowWarewww.qimacros.com 33

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