The document presents an overview of healthcare transformation through lean and six sigma methodologies, emphasizing the importance of continuous improvement and waste reduction for organizational success. It details case studies that illustrate how these principles have led to significant improvements in primary care settings and orthopedics, highlighting methodologies like value stream analysis and simulation for optimizing patient flow and operational efficiency. Key tools and outcomes from these approaches demonstrate the potential for enhanced patient care and reduced costs in the healthcare industry.

1. 0100.015314516(pptx)-E2 0

2. Presenters
John Budd
Senior Consultant
ECG Management Consultants, Inc.
Sean Hartzell
Senior Manager
ECG Management Consultants, Inc.

3. Housekeeping
• Audio
• Q and A
• Recording available on simul8healthcare.com

4. Agenda
I. Introduction and Industry Overview
II. Large Primary Care Case
III. Orthopedics Case
IV. Conclusion
3

5. I. Introduction and Industry Overview
4

6. I. Introduction and Industry Overview
Evolving Economics
Pricing pressures from patients and payors will continue to push healthcare
organizations to change the way they view their business model.
Old Equation New Equation
Cost + Profit Margin = Price Price – Cost = Profit Margin
Cost Cost
5
Profit
Profit
15
10
5
0
Fixed Price
Traditional Organizations High-Performing Organizations
An organization’s ability to manage costs through continuous improvement is currently
a valuable competitive advantage but will soon be necessary for organizational survival.

7. I. Introduction and Industry Overview
Waste in the System
In September 2012, the Institute of Medicine (IOM) published
its findings on waste in the healthcare system.
Optimize processes and
establish a Lean culture
that focuses on continuous
improvement.
Develop and implement
standard work and care
protocols.
Conduct analysis of
variance between
providers in order to
identify best practices.
Streamline processes to
minimize unnecessary
expenditures.
These areas will be the target of continued governmental and payor pressures.
Organizations with strong continuous improvement programs will be the best prepared.
6
Emphasize a business
model that views profit as
a function of cost
reduction.

8. I. Introduction and Industry Overview
Learning From Other Industries
Lean Six Sigma has been used in countless other industries to eliminate
waste from systems. It is now gaining traction within healthcare.
At their center, both methods encourage a systematic team-based approach to problem
solving and an organizational focus on continuous improvement of key processes.
7
Lean
• Emphasizes
continuous generation
of value to the
customer.
• Continuously seeks to
reduce waste.
• Views improvement
as a job responsibility
of all employees.
Six Sigma
• Emphasizes the
elimination of defects.
• Heavily relies on statistical
analysis and tools.
• Focuses on structured
projects with defined
teams, led by improvement
experts.

9. Lean has proven to be a product of its environment as it was developed and has
thrived within organizations where change was the only alternative to failure.
Customer Focus
I. Introduction and Industry Overview
Lean Production System
Origins
• Beginning in the 1950s, the Lean Production System was developed over
the course of 30 years by the Toyota Manufacturing Company.
• Built on necessity in post-World War II Japan, it is a product of resource
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and capital scarcity experienced during the period.
• These economic pressures lead to many of the system’s foundational
elements:
– Just-in-Time.
– Waste reduction.
– Changeover time reduction.
Themes
• Continuous reduction of waste.
• Respect for people.
• Create value to the customer.
• Economies of flow versus economies of scale.
• Seek improvement over perfection.
Just-in-Time Jidoka
Standardization
Stability
The pinnacle of the Lean Production System is a
customer focus. This is supported by Just-in-
Time and Jidoka production methods. Finally, the
entire system is built on a foundation of process
standardization and stability.
“Improvement usually means doing something that
we have never done before.” – Mr. Shigeo Shingo

10. I. Introduction and Industry Overview
Introduction to Lean Six Sigma
Six Sigma seeks defect reduction through fact-based, data-driven problem
solving tools that rely heavily on data analysis and statistical methods.
9
Origins
• Six Sigma methods were founded in the statistical
analysis of manufacturing processes developed by
Mr. Walter Shewhart and further refined by Mr. W.
Edward Deming.
• Deming’s methods were initially adopted in Japan and
were said to play a key role in the country’s rise to
manufacturing prowess in the 1980s.
• Early U.S. adopters include Motorola, Raytheon, Kodak,
and GE.
Themes
• Any variation from the goal is a loss to society.
• Defect reduction through fact-based root cause analysis.
• Process results are a function of its inputs.
1s 2s 3s 4s 5s 6s 1s 2s 3s 4s 5s 6s x̅
The Six Sigma standard aims to preserve six standard
deviations from the mean before reaching the process
output defect threshold. Process defects are reduced to
less than or equal to 3.4 defects per million opportunities.
“Processes are perfectly designed to produce the results that occur.” – Mr. Deming

11. I. Introduction and Industry Overview
Systematic Approach
10
• Determine scope, goals, and key
stakeholders.
• Estimate timeline, budget, and resources.
• Map the current state through interviews
and observation.
• Define key process metrics.
• Identify waste.
• Locate internal and external sources of
variability.
• Ascertain causes of redundancy and errors.
• Prioritize potential changes.
• Implement process changes.
• Review outcome and CTQ performance in
order to understand the impact of changes.
• Establish ongoing accountability and
measurements.
• Monitor performance.
Define
Measure
Analyze
Improve
Control
• Define the problem.
• Measure current state.
• Analyze for root causes.
• Generate, prioritize, and implement
improvements and countermeasures.
• Measure to confirm improvement.
• Standardize the new process.
• Respond to the need for further
modifications.
• Restart problem solving process over
again as appropriate.
Plan
Do
Check
Act
Together, Lean and Six Sigma utilize a systematic approach toward problem
solving and process improvement that is based on the scientific method.
It is important to note that neither of these approaches are linear
in practice, as improvement generally requires multiple cycles.

12. I. Introduction and Industry Overview
Summary of Lean Six Sigma Tools
While there are a multitude of tools available, the key to project
Define Measure Analyze Improve Control
Purpose
Frame the project
and position it for
success.
Collect and
summarize data to
understand the
current state.
Determine root
causes of variation
and waste.
Identify, develop, and
implement solutions.
Put strategies in
place to assure
improvements are
sustained.
Tools
• Project charter.
• Voice of the
customer.
• Critical to quality
(CTQ)
assessment.
• SIPOC.
• Current-state
VSM.
• Fishbone diagram.
• Minitab (summary
statistics, control
charts).
• Paretto charts.
• Hypothesis
testing.
• ANOVA.
• Correlation and
regression.
• 8 wastes.
• 5 whys.
• Future-state VSM.
• 5S/visual
management.
• Pull systems.
• Workload
balancing.
• Single-piece flow.
• Standard work.
• FMEA.
• Training plan.
• Visual controls.
• Daily
management.
success is appropriate selection and effective deployment.
11

13. I. Introduction and Industry Overview
Lean Six Sigma in Healthcare
In 2012, a study funded by the American College of Healthcare Executives
found a 7:1 return on investment from Lean and Six Sigma projects.
• Thedacare reduced patient wait time and throughput in one family practice clinic in order to shift
financial results from an annual operating loss of $400,000 in 2006 to a profit in 2009.
– On the Mend: Revolutionizing Healthcare to Save Lives and Transform the Industry
• The Pittsburgh Regional Health Initiative cut the amount of reported central line-associated
bloodstream infections by more than 50%. The rate per 1,000 line days (the measure hospitals
use) plummeted from 4.2 to 1.9. – ASQ.org (American Society for Quality)
• A major hospital in the U.S. was able to reduce inpatient mortality rates by 47.8%.
The number and size of organizations engaging in Lean Six Sigma practices
have continued to grow as they increasingly experience positive results.
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– iSixSigma.com
• North Mississippi Medical Center reduced the number of prescription errors in discharge
documents by 50%. – ASQ.org
• The Mayo Clinic’s Rochester Transplant Center reduced the cycle time from when a new patient
made initial contact to setting up an appointment from 45 days to 3 days.
– iSixSigma.com
• Mercy Medical Center decreased in-hospital mortality rates from 6.7% to 3.5%, a 47.8% reduction.
– Medical News Today

14. II. Large Primary Care Case
13

15. Objectives
• Develop an optimal patient flow.
• Optimize scheduling processes.
• Design a team-based care model.
• Provide patient-centered care.
• Define standards of care for preventive medicine and care management
ECG Scope of Work
14
II. Large Primary Care Case
Situation
ECG Management Consultants, Inc., was asked to assist a large primary care
clinic in developing and implementing performance improvement strategies,
while leveraging Lean tools and patient-centered medical home concepts.
The clinic had previously identified numerous areas of improvement
throughout the year with a long-term goal of improving health
outcomes, increasing efficiency, and reducing costs.
processes.
• Develop a culture of improvement, initially through daily huddles.
Conduct a value stream analysis and develop a future-state model and
implementation plan.

16. II. Large Primary Care Case
Value Stream Analysis Overview
The Value Stream Analysis (VSA) is a Lean technique that enables organizations
to gain a solid understanding of their current state, identify critical process areas
that need improvement, and begin the process of continuous improvement.
Key Considerations
• Requires a team of dedicated staff to commit to participating in an uninterrupted 1-day to week-long
15
retreat to conduct the VSA.
• Substantial work is required pre- and post-VSA retreat.
• The VSA will be far more effective if the facilitators “go to the gemba.”
• The VSA provides organizations with the improvement plan. The next struggle lies in
implementing the future-state plan and truly sustaining the changes and a culture of continuous
improvement beyond implementation.
• Organizations embarking on VSAs need a strong leadership committed to a culture of change.
Develop
project goals
and
objectives.
Define
process and
outcome
measures.
Map current
state.
Identify
barriers and
opportunities.
Design future
state and
improvement
goals.
Develop
training and
transition
plan.
Implement. Sustain.
VSA Process

17. II. Large Primary Care Case
Approach
A team of physicians, nurses, administrative assistants/schedulers, and other
administrative staff spent 2 days conducting a VSA.
• Developed and concurrently managed two work streams focused on processes identified as priority
16
improvement areas.
– Work Stream I – Team-based care, huddle processes, patient flow, and care management.
– Work Stream II – Scheduling process, preventive care, staffing model, and patient navigators.
• Leveraged patient-centered medical home concepts as a foundation for developing the future-state
plan.
• Mapped out the current-state patient flow, including identifying areas of waste, decision points needed,
and opportunities for improvement.
• Developed recommendations for future-state model, addressing all activities in Work Streams I and II.

18. II. Large Primary Care Case
Results
The clinic retreat team developed a future-state value stream for pre-visit,
prior day of patient visit, patient visit, and post-visit.
17
Check and stock
rooms for the day.
Review schedule for
the day and any
patient notes.
Bring patient
back from
waiting room.
Review patient
reason for visit,
snapshot, and care
team notes.
Pend any
orders for
M.D./NP.
RN or
L.P.N./M.A.
administers
any approved
vaccines or
injections.
M.D./NP
conducts visit
with patient
and submits
orders.
Care team
conducts daily
huddle.
Room patient – vitals,
chief complaint,
allergies, med list,
medical/social history,
and other data entry.
M.D./NP reviews
medication list that
RN previously
reconciled.
M.D./NP
documents visit
in Epic,
including care
plan, goals, and
follow-up
instructions.
Print
patient
AVS to
nursing
station
and bring
to patient.
AOA enters
patient room
with AVS and
assists check-out
and
scheduling
follow-up.
AOA provides
patient with
care team
phone number
for other
follow-up
needs and
referrals.
AOA walks
patient out of
clinic.
Patient Visit – Future-State Value Stream

19. II. Large Primary Care Case
Results (continued)
The clinic optimization retreat resulted in an improvement plan that ultimately helps
improve efficiencies and reduce waste, allowing clinical staff to work at “the top of
their license” and provide high-quality, patient-centered care.
Recommendations
• Optimized patient flow, restructured huddle processes, simplified scheduling process,
developed care teams, improved medication reconciliation process, and redesigned clinical
space for improved efficiency and a collaborative environment.
• Establish a Primary Care Optimization Team and delegate a Physician Champion.
• Initiate and expand upon the 6-month implementation plan for the future-state model with a
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phased-in approach over time.
• Develop and track measures of success – process, clinical, quality, and service.
• Invest in improving and optimizing the IT infrastructure.
Lessons Learned
• Representation from various roles is crucial during the VSA.
• Everyone has a different perception of the current state.
• When planning the future state, set high expectations but also be realistic.
• Spend the time prior to the VSA to walk through the “gemba” and understand the current state
yourself.

20. III. Orthopedics Case
19

21. 20
III. Orthopedics Case
Situation
ECG was asked to assist an orthopedics group in designing and refining future-state
provider and clinic master schedules via the use of simulation software.
Clinic Statistics
• 16 providers.
• 9 exam rooms.
– 2 swing rooms.
• 1 cast/bracing/splinting room.
• 2012 volumes = 14,121.
• 4 nurses.
• 1 medical assistant.
• 2 registration clerks.
• 10% unfilled appointments.
Project Objectives
• Optimize use of staff and room
resources.
• Reduce bottlenecks in the distribution
of clinic volume across sessions.
• Increase patient throughput and
overall clinic volume.
• Reduce patient wait time.
• Improve access to available
appointments.

22. III. Orthopedics Case
Overview of Simulation Applications in Healthcare
Simulation models can be used to test changes in a risk-free
environment to identify and implement the best solution.
Operating
Rooms
Emergency
Departments
Clinic
Operations
Space
Planning
Disaster
Planning
Identify Work
Queues
Monitor Resource
Utilization
Measure Event
Duration
Optimized Platform
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Simulation
Capabilities
Common
Application
Areas
Evaluate
Financial Outputs

23. III. Orthopedics Case
Project Methodology and Client Results
Inputs Over 500 Outputs
variables were
needed!
22
• Operating hours.
• Provider schedules.
• Support staff.
• Exam rooms.
• Work flow processes.
– Check-in.
– Rooming.
• Visits = Increased 19%.
• Wait time = Decreased 40%.
• Physician utilization =
Decreased 17%.
• Nursing utilization =
Unchanged.
• Exam room utilization =
Unchanged.
Findings
• Providers were the bottleneck resource.
• Work flows created inefficiency in deployment of providers.
Recommendations
• Redistribution of clinic sessions across days to reduce wait time for patients.
• Work flow modification to reduce rework by providers and increase clinic capacity.

24. III. Orthopedics Case
SIMUL8 Screen Views
SIMUL8 provides
graphical representation
of resources as they
move along designated
pathways.
Simul8 captures wait time
distributions for selected
processes in real time.
23

25. III. Orthopedics Case
Overview of Modeling Results
Metric
1
Status Quo
Scenario 1:
Standardize
Provider Start
and End Times
Scenario 2:
Extend Clinic
Hours
Scenario 3:
Schedule
Providers for
Three 3-Hour
Sessions
Scenario 4:
Implement New
X-Ray Process
Scenario 5:
Implement New
X-Ray Process
and Reduce
Unfilled
Appointments
Scenario 6:
Extend Clinic
Hours and
Implement New
X-Ray Process
Patient Statistics
Unfilled Appointments 10% 10% 10% 10% 10% 0% 10%
Patients Registered 1,358 1,445 1,622 1,475 1,358 1,504 1,622
Patients Requiring X-Ray 60% 60% 60% 60% 20% 20% 20%
Total Patients Sent to X-Ray 813 865 972 883 269 298 321
Average Wait/Process Times (Minutes)
Wait Time at Registration 0 0 0 0 0 0 0
Wait Time for Exam Room 4 5 6 5 3 4 3
Wait Time to See Provider 7 7 7 7 6 7 6
Median Time Spent in Clinic 98 98 103 98 57 59 59
Room Statistics
Number of Exam Rooms 9 9 9 9 9 9 9
Usage Rates 47% 50% 58% 45% 35% 44% 43%
Average Hours Open Per Day 7.9 7.6 8.0 9.0 7.9 7.9 8.0
Cast Room Visits 544 579 649 592 408 453 487
Nursing Procedures 339 361 405 368 339 375 405
Physician Statistics .
Number of Providers 16 16 16 16 16 16 16
Available Capacity (Hours) 658 679 769 693 658 658 769
Total Utilization 106% 106% 105% 106% 90% 99% 89%
Planned Utilization 2 71% 71% 71% 72% 71% 79% 71%
Rooms Per Provider 2 2 2 2 2 2 2
Support Staff
Number of Nursing Staff 4 4 4 4 4 4 4
Available Nursing Capacity 896 900 900 900 896 896 900
Capacity Used 44% 47% 49% 44% 41% 45% 46%
Number of MAs 1 1 1 1 1 1 1
Available MA Capacity 225 225 225 225 225 225 225
Capacity Used 40% 42% 45% 38% 33% 37% 39%
Number of Clerks 2 2 2 2 2 2 2
Available Clerk Capacity 456 456 450 458 456 456 450
Capacity Used 17% 18% 18% 17% 17% 18% 19%
Results
Projected Annual Visits 14,121 15,032 16,873 15,344 14,121 15,639 16,873
Volume Change 0% 6% 19% 9% 0% 11% 19%
Projected Change in Revenue $ - $ 96,958 $ 328,927 $ 132,970 $ - $ 168,167 $ 328,927
Increase in Physician Capacity 0% 3% 17% 5% 0% 0% 17%
Increase in Nursing Capacity 0% 0% 0% 0% 0% 0% 0%
Increase in Non-Licensed Staff Capacity 0% 0% 0% 0% 0% 0% 0%
24

26. III. Orthopedics Case
SIMUL8 Analytics Capabilities
25
Trial Calculator
Customizable
to Situation
Varying
Levels of
Modeling
Financial
Outputs
Current- and
Future-State
Capture
Scenario
Management
Sample Reports Available
• Performance measure for all objects in
simulation.
• Interactive P&L statements.
• Ability to track carbon footprint.
• Gantt chart generation of processes.
• Detailed log results for further analysis.
• Time graphs for visual insight.
• Results segregation to filter by label type.
– I.e., trauma patients versus fast-track
patients in an ED.
• Trials for simulations to validate results.

27. IV. Conclusion
26

28. Conclusion
As the healthcare sector continues to look for opportunities
to reduce waste, SIMUL8 can act as a tool to weigh a wide
range of performance improvement opportunities.
• ECG has been able to marry SIMUL8 with its traditional performance
improvement strategies.
• Substantial work is required pre- and post-VSA retreat.
• The VSA will be far more effective if the facilitators “go to the gemba.”
• The VSA provides organizations with the improvement plan. The next struggle
lies in implementing the future-state plan and truly sustaining the changes and a
culture of continuous improvement beyond implementation.
• Organizations embarking on VSAs need a strong leadership committed to a
27
culture of change.

29. QUESTIONS
• Please forward any topics you would like
to see covered to claire.c@simul8.com
• Continue the discussion on SIMUL8 in
Health – LinkedIn Group