Successfully Applying Six Successfully Applying Six Sigma in a Healthcare Sigma in a Healthcare
OrganizationOrganization
Rick Beaver
VP-Quality
Heritage Valley Health System
Sewickley/Beaver, PA
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• 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
Understanding Understanding Six Sigma Six Sigma Integration Integration
and and ProfitabilityProfitability
Education and Alignment of Senior
Leadership
Understanding Six Sigma Understanding Six Sigma Integration and ProfitabilityIntegration and Profitability
• 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
SSCSSCSSCSix Sigma
Connectionsfor Healthcare
Understanding Understanding Six Sigma Six Sigma Integration Integration
and and ProfitabilityProfitability
Education and Alignment of Senior Leadership
Board Members and Physician Leader Retreat
Understanding Six Sigma Understanding Six Sigma Integration and ProfitabilityIntegration and Profitability
• Identification of Key Stakeholders– Board Members and Physician Leaders
• Addresses global needs of the organization• Unified commitment• Common language
Understanding Understanding Six Sigma 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 Sigma Understanding Six Sigma Integration and ProfitabilityIntegration and Profitability
• 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
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Connectionsfor Healthcare
Understanding Understanding Six Sigma 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 Sigma Understanding Six Sigma Integration and ProfitabilityIntegration and Profitability
• 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 SSCSSCSSCSix Sigma
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Project Selection via FMEAProject Selection via FMEAImpact on Imperative Finance Quality HR IT Growth
Very 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 4.5Phys Office EMR 0.75 1.00 0.75 1.00 1.00 4.5TMC Registration 1.00 1.00 0.50 1.00 0.75 4.25E/R Business Deployment 0.50 1.00 0.75 0.75 1.00 4Regional Cancer Center Evaluation 1.00 1.00 0.50 0.50 1.00 4Improve Customer Satisfaction (needs scoped) 0.10 1.00 1.00 0.50 1.00 3.6Revenue Capture (1% improvement) 1.00 0.50 0.75 0.75 0.10 3.1Nursing Overtime 1.00 0.75 1.00 0.10 0.25 3.1Retail Rx at TMC 0.25 1 1 0.1 0.75 3.1Reduce FMLA/Missed Days Due to Injury 1.00 0.75 1.00 0.10 0.10 2.95E.D. Physicians to Private 0.75 0.75 0.50 0.10 0.75 2.85Human Resources - Payroll 0.25 0.75 0.75 1.00 0.10 2.85Inventory Management (Fixed & Non) 1.00 0.25 0.50 1.00 0.10 2.85Family Practice Relocation 0.75 0.75 0.75 0.1 0.5 2.85Retinal Surgery 0.10 1.00 0.50 0.10 1.00 2.7Medical Ambulatory Unit 0.25 1 0.75 0.1 0.5 2.6Robotic Rx 0.25 1 0.25 0.75 0.25 2.5Child Psychiatry 0.1 1 0.25 0.1 1 2.45
Criterion Value Scores
Understanding Understanding Six Sigma 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 Sigma Understanding Six Sigma Integration and ProfitabilityIntegration and Profitability
• Project Assignments Prior to Start of Classes
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–“If What We Teach Today If What We Teach Today CanCan’’t Be Applied Tomorrow t Be Applied Tomorrow on the Floor, the Training is on the Floor, the Training is Not Fully EffectiveNot 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
Understanding Understanding Six Sigma 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 Sigma Understanding Six Sigma Integration and ProfitabilityIntegration and Profitability
• 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
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Champions Support Champions Support Students During ClassStudents During Class
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Six Sigma ImplementationTime 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
DevelopedStudent Selection
Senior 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 businessa way of doing 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
020406080
100120
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: 3,244Mean: 1.22 Days
Control Phase - Month 3 Data
Sigma Capability: 4.45DPM: 1,566
Mean: 1.08 Days
Maintenance DepartmentWork Order Turn-Around Time
6σEngineering Six Sigma Team
Control Chart
0%1%2%3%4%5%6%7%8%
02/09-02/22
02/23-03/09
03/10-03/22
07/13-07/26
07/27-08/09
08/10-08/23
08/24-09/06
09/07-09/20
09/21-10/04
Goal2.5%
Census-24
Census-25
Census-23
Census-19
Census-20
Census-21
Census-19
Census-24
Census-21
Nursing: % OT Hours Paid on 7W
Pay period dates
$54,536.58Paid in OT $$Average Census-144
$23,871.65Paid in OT $$
Average Census-131
Cataract SurgerySurgeons 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
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