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Successfully Applying Successfully Applying Six Sigma in a Six Sigma in a
Healthcare OrganizationHealthcare Organization
Rick Beaver
VP-Quality
Heritage Valley Health System
Sewickley/Beaver, PA
SSCSSCSix Sigma
Connectionsfor Healthcare
SSCSSCSix Sigma Connectionsfor Healthcare
• Understand Integration of Six Sigma into an Organization for 1st Year Profitability
• Identify Areas of Business Application for Six Sigma
• Discuss Examples of Project Outcomes• Identify Various Options for Six Sigma
Implementation
Presentation Objectives
UnderstandiUnderstanding Six Sigma ng Six Sigma Integration Integration
and and ProfitabilityProfitability
Education and Alignment of Senior
Leadership
Understanding Six Understanding Six Sigma Integration and Sigma Integration and
ProfitabilityProfitability• Identification of Key Stakeholders
– Senior Management Team• For organization success, senior
leadership support is needed• If you want Six Sigma to live beyond one
person, group or project, senior leadership support is needed
SSCSSCSix Sigma Connectionsfor Healthcare
UnderstandiUnderstanding Six Sigma ng Six Sigma Integration Integration
and and ProfitabilityProfitability
Education and Alignment of Senior Leadership
Board Members and Physician Leader Retreat
Understanding Six Understanding Six Sigma Integration and Sigma Integration and
ProfitabilityProfitability• Identification of Key Stakeholders
– Board Members and Physician Leaders• Addresses global needs of the organization• Unified commitment• Common language
UnderstandiUnderstanding Six Sigma ng Six Sigma Integration Integration
and and ProfitabilityProfitability
Education and Alignment of Senior
Leadership
Board Members and Physician Leader Retreat
Operations Leaders and Physicians Provided Awareness
Training
Understanding Six Understanding Six Sigma Integration and Sigma Integration and
ProfitabilityProfitability• Identification of Key Stakeholders
– Operations Leaders and Physicians• Physicians Relate to the Metric Component of Six
Sigma• Sets the awareness of operations and physicians
to understand the path set by the organization• Provides an awareness to operations and
physicians of how students are approaching projects
SSCSSCSix Sigma Connectionsfor Healthcare
UnderstandiUnderstanding Six Sigma ng Six Sigma Integration Integration
and and ProfitabilityProfitability
Education and Alignment of Senior
Leadership
Board Members and Physician Leader Retreat
Operations Leaders and Physicians Provided Awareness Training
Project Selection Aligned with Org Goals
Understanding Six Understanding Six Sigma Integration and Sigma Integration and
ProfitabilityProfitability• Alignment of Projects to Strategic
Imperatives of Organization– Provides a balanced project portfolio– Ensures support of all aspects of the organization
(IT, HR, $, Q, Growth)– Allows incorporation of a specific project set in
the mix– Project selection is a data driven approach, using
FMEA methods and prioritization
SSCSSCSix Sigma Connectionsfor Healthcare
Project Selection via Project Selection via FMEAFMEA
Impact on Imperative Finance Quality HR IT GrowthVery High Positive Impact > $750 = 1.00 1.00 1.00 1.00 1.00High Positive Impact $500-$750 = .75 0.75 0.75 0.75 0.75Medium Positive Impact $250-$500 = .50 0.50 0.50 0.50 0.50Low Positive Impact $100-$250 = .25 0.25 0.25 0.25 0.25Very Low Positive Impact < $100 = .10 0.10 0.10 0.10 0.10
ProjectsCardiology Business Deployment 1.00 1.00 0.75 0.75 1.00 4.5
Phys Office EMR 0.75 1.00 0.75 1.00 1.00 4.5
TMC Registration 1.00 1.00 0.50 1.00 0.75 4.25
E/R Business Deployment 0.50 1.00 0.75 0.75 1.00 4
Regional Cancer Center Evaluation 1.00 1.00 0.50 0.50 1.00 4
Improve Customer Satisfaction (needs scoped) 0.10 1.00 1.00 0.50 1.00 3.6
Revenue Capture (1% improvement) 1.00 0.50 0.75 0.75 0.10 3.1
Nursing Overtime 1.00 0.75 1.00 0.10 0.25 3.1
Retail Rx at TMC 0.25 1 1 0.1 0.75 3.1
Reduce FMLA/Missed Days Due to Injury 1.00 0.75 1.00 0.10 0.10 2.95
E.D. Physicians to Private 0.75 0.75 0.50 0.10 0.75 2.85
Human Resources - Payroll 0.25 0.75 0.75 1.00 0.10 2.85
Inventory Management (Fixed & Non) 1.00 0.25 0.50 1.00 0.10 2.85
Family Practice Relocation 0.75 0.75 0.75 0.1 0.5 2.85
Retinal Surgery 0.10 1.00 0.50 0.10 1.00 2.7
Medical Ambulatory Unit 0.25 1 0.75 0.1 0.5 2.6
Robotic Rx 0.25 1 0.25 0.75 0.25 2.5
Child Psychiatry 0.1 1 0.25 0.1 1 2.45
Criterion Value Scores
UnderstandiUnderstanding Six Sigma ng Six Sigma Integration Integration
and and ProfitabilityProfitability
Education and Alignment of Senior
Leadership
Board Members and Physician Leader Retreat
Operations Leaders and Physicians Provided Awareness Training
Project Selection Aligned with Org Goals
Project Assignment Prior to Class
Understanding Six Understanding Six Sigma Integration and Sigma Integration and
ProfitabilityProfitability• Project Assignments Prior to Start of Classes
SSCSSCSix Sigma Connectionsfor Healthcare
–“If What We Teach Today If What We Teach Today Can’t Be Applied Tomorrow Can’t Be Applied Tomorrow on the Floor, the Training is on the Floor, the Training is Not Fully Effective”Not Fully Effective”
–Students arrive at class day 1 with a specific project and timeline defined–When student leaves class, work starts as soon as they hit the operations floor
UnderstandiUnderstanding Six Sigma ng Six Sigma Integration Integration
and and ProfitabilityProfitability
Education and Alignment of Senior
Leadership
Board Members and Physician Leader Retreat
Operations Leaders and Physicians Provided Awareness Training
Project Selection Aligned with Org Goals
Project Assignment Prior to Class
Students Aligned with Champions
Black Belt Training
Understanding Six Understanding Six Sigma Integration and Sigma Integration and
ProfitabilityProfitability• Champion / Student Alignment is
Critical– Both the student AND champion are
responsible for project outcome– Champion ensures use of tools and metrics– Champion helps to break barriers to success– Champion participates in every student
presentation SSCSSCSix Sigma Connectionsfor Healthcare
Champions Support Champions Support Students During ClassStudents During Class
SSCSSCSix Sigma Connectionsfor Healthcare
Six Sigma Implementation
Time Line
Feb 1 Aug 20 Aug 22 Sept 30
Project Idea BankDeveloped
1st Wave of
Students Trained
July 03
1st Set Of Projects
Run to Completion
6 Sigma Champion
Training
Nov 1
Oct 4
2002 2003
Leadership Web
Seminars
Board of Directors and Physician Leadership
Training
Physician and Resident Training Program
Developed
Student SelectionSenior Leader
Awareness
Where Can Six Sigma Be Where Can Six Sigma Be Applied in the Organization?Applied in the Organization?
• There are no limitations to its application if Six Sigma is
going to be “a way of doing a way of doing business”business”
Examples of Six Sigma Applications
HR (OT Reduction, FMLA Management, Staff Retention)
Maintenance (Work Order Turn Around Time, Mean Time Between Failure for Clinical Equipment, Clinical Alarms)
ED Design/Construction (Selection of Design/Architectural firms, Selection of fund raising company)
Process Projects to Support ED Pre-Design (Door to Doc, Registration, ED Radiology, Bed Clean
Cycle, Lab Turn-Around-Time)
Examples of Project Outcomes
17:1 Return on $260,000 Investment
Control Chart - HF Discharge Instructions
UCL=44.587
LCL=12.1
CEN=28.344
UCL=56.546
LCL=40.32
CEN=48.433
UCL=99.608
LCL=66.092
CEN=82.85
0
20
40
60
80
100
120
Jul-02
Aug-02
Sep-02
Oct-02
Nov-02
Dec-02
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Jan-04
Feb-04
Mar-04
Apr-04
May-04
Heart Failure Patients Given Education
Baseline Data:Mean = 28.344Sigma Capability = <1.0DPM=723360
First Process Change Data:Mean = 48.433Sigma Capability = <1.5DPM = 481000
PROCESS CHANGE•FMEA completed by two nursing groups Jan-03.•Heart Failure Program nurses education in proper documentation Feb-03. •Education of nursing Apr-03 and Nov-03.•Pilot of Heart Failure Discharge Summary form which included HF specific information May-03.•System wide implementation of new forms Nov-03.•Follow-up with individual nurses regarding their documentation if not in compliance Nov-03.•Informational laminated pocket cards given to all cardiac nurses.•Communicate updates in newsletters and staff meetings - ongoing.
Control DataMean = 82.85Sigma Capacity = ~2.5DPM = 165676
PROCESS CHANGE•Case managers began to use HF Case Management tool to monitor HF indicators Apr-04
SVH EngineeringWork Order Turn-Around Time
Control Chart
UCL=38.106
LCL=0.0
CEN=18.026 UCL=6.9689
LCL=0.0
CEN=3.2965
0
10
20
30
40
50
60
70
80
Baseline Data (Prior to implementation ofSix Sigma Process Improvements)
Sigma Capability: 2.25DPM: 225,463
Mean: 4.70 Days
Control Phase - Month 1 Data
Sigma Capability: 4.52DPM: 1,250
Mean: 1.05 Days
Control Phase - Month 2 Data
Sigma Capability: 4.22DPM: 3,244
Mean: 1.22 Days
Control Phase - Month 3 Data
Sigma Capability: 4.45DPM: 1,566
Mean: 1.08 Days
Maintenance Department
Work Order Turn-Around Time
6σEngineering Six Sigma Team
Control Chart
0%1%2%3%4%5%6%7%8%
0 2 / 09 -
0 2 / 2 2
0 2 / 23 -
0 3 / 0 9
0 3 / 10 -
0 3 / 2 2
0 7 / 13 -
0 7 / 2 6
0 7 / 2 7 -
0 8 / 0 9
0 8 / 10 -
0 8 / 23
0 8 / 2 4 -
0 9 / 06
0 9 / 0 7 -
0 9 / 20
0 9 / 2 1-
10 / 0 4
G o a l2 . 5 %
C e n s u s - 2 4
C e n s u s - 2 5
C e n s u s - 2 3
C e n s u s - 1 9
C e n s u s - 2 0
C e n s u s - 2 1
C e n s u s - 1 9
C e n s u s - 2 4
C e n s u s - 2 1
N u r s i n g : % O T H o u r s P a i d o n 7 W
P a y p e r i o d d a t e s
$ 5 4 , 5 3 6 . 5 8P a i d i n O T $ $A v e r a g e C e n s u s - 1 4 4
$ 2 3 , 8 7 1 . 6 5P a i d i n O T $ $
A v e r a g e C e n s u s - 1 3 1
Cataract Surgery Surgeons Supported Project by:
• Discussing Technique Differences for Eye Anesthesia
• Pre-Scripting Medications
• Eliminated Pre-Admission Testing on Topical Anesthesia Cases
• Common Supplies Accepted
• Types of Ophthalmic Solutions
• Keratomes and Knife Preferences
• Drapes
• Custom Packs
• Lens Supplier
Improved Profit Margin: from –16% to +7%Improved Customer Satisfaction: to Over 90%
44% Variation in Supply Cost
Options for Implementation
• Definitions:– Pilot Scale 1 or 2 Projects– Large Scale 10 to 30+ Projects
• Risks/Benefits of a Pilot Scale Approach– Risks:
• Possible incorrect conclusion of Six Sigma if project/student selection is not well done (i.e., 1 of 2 projects not fully successful)
• Support for the project is not readily available because the organization is not properly informed of the effort
– Benefits: • Short time horizon• Reduced investment up front
Risks/Benefits of a “Large Scale” Approach
• Risks: – Larger investment up front– Involving Board, Senior management and physician
leaders may be problematic in some organizations
• Benefits:– Provides a true evaluation of the six sigma deployment– Mitigates failure due to poor project/student selection– Optimizes financial returns of the deployment– Assures alignment of projects with needs of the
organization – Promotes the long term success of six sigma
Sustaining the Six Sigma Effort for the
Long Term• Incorporate Six Sigma in Internal
MBA or Continuing Education Program– Train the organization; change the culture– A strategy that embraces employee turnover
• Create a structure around Six Sigma– Regular agenda items for operations meetings– Include in monthly newsletters– Poster presentations placed in strategic areas
of the hospital
Are Partnerships with Six Sigma Organizations
Worthwhile?• Partnerships can facilitate deployment and
reduce initial costs • Benefits of leveraging the experience of a
partner:– Project Leader interaction between organizations– Shared learnings– Prevents redundancy
• Example: Partner adopted a project on nursing overtime in their organization for $100,000 annual gain
Summary• Profitability can be achieved in first years
of Six Sigma implementation by:– Achieving organization awareness and support
prior to start of training– Diligent selection of projects and students– Alignment of students with champions– Identification of project set balanced across
company imperatives– Partner with organization experienced in Six
Sigma methodology with demonstrated success
SSCSSCSix Sigma Connectionsfor Healthcare
Questions?SSCSSCSix Sigma Six Sigma
ConnectionsConnectionsfor Healthcare
SixSigmaConnections.org