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Six Sigma in Healthcare:


... Hospital Inpatient Prospective Payment Systems and Fiscal Year 2008 Rates. ... In March 1998, John C. Desmarais, Commonwealth Health Corporation's President ... – PowerPoint PPT presentation

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Title: Six Sigma in Healthcare:


Six Sigma in Healthcare A prescription for
Carolyn Pexton October 24, 2007 CAHPMM Annual
  • Articulate the case for organizational
    transformation in healthcare
  • Acquire high-level understanding of Six Sigma and
    related change management methods
  • Learn from case study examples
  • Know the keys to a successful deployment

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The Need for Change in Healthcare
A Perfect Storm
  • Patient safety and quality concerns
  • Demographic changes
  • Rapidly changing technologies and treatment
  • Digital transition
  • Workforce issues
  • Financial constraints
  • Rising consumerism
  • Un and Under-insured
  • Leadership challenges

Time cover story - May 1, 2006
Q What Scares Doctors? A Being the Patient
To a large extent, health care systems were not
designed with any scientific approaches in mind.
Too often there are long waits, high levels of
waste, frustration for patients and clinicians
alike, and unsafe care. A bold effort to design
health care scheduling systems, process flows,
safety procedures, and even physical space will
pay off in better, less expensive, safer
experiences for patients and staff alike. Don
Berwick, IHI
The high cost of poor quality New payment rules
from CMS
  • Along with human suffering, treating medical
    errors such as hospital-acquired infections come
    with a high financial cost.
  • Roughly 1 in 10 Americans will acquire an
    infection as a result of their hospital stay, and
    this stay will be lengthened in order to provide
    appropriate treatment.
  • Hospitals will no longer be reimbursed by CMS for
    certain errors and the additional resources they
  • Change is imperative!

Centers for Medicare and Medicaid Services (CMS),
HHS CMS-1533-FC, Medicare Program Changes to the
Hospital Inpatient Prospective Payment Systems
and Fiscal Year 2008 Rates.
Technology alone isnt the answer
Simply overlaying 21st century technologies on
top of 20th century workflow will not yield the
necessary cost, quality and efficiency benefits.
Hospitals must also redesign processes and
address the human side of change.
  • Overcoming the barriers
  • Culture
  • Overcome resistance
  • Shape common goals
  • Alignment and accountability
  • Ensure clear linkage between improvement
    initiatives, performance and strategic goals
  • Develop consistent management structure
  • Control
  • Put mechanisms in place to monitor and maintain
    results long-term

Getting there from here
  • Transformation in healthcare wont happen without
  • Transparency cant happen without culture change.
  • Culture change wont happen without a bold
    vision, a common toolset and unwavering

Six Sigma Background and Basics
Where did Six Sigma Come From?
  • Initially developed at Motorola in the 1980s to
    improve processes, meet customer expectations and
    maintain market leadership
  • During the first five years, even suppliers were
    required to participate in the process
  • Six Sigma was adopted by Allied Signal and GE and
    further developed into a true management system
  • Success led to global deployment across a variety
    of companies and industries including

What does Six Sigma mean?
  • The term Sigma is a measurement of how far a
    given process deviates from perfection a
    measure of the number of defects. Six Sigma
    correlates to just 3.4 defects per million
  • A quality improvement methodology that applies
    statistics to measure and reduce variation in
  • A management system that is comprehensive and
    flexible for achieving, sustaining, and
    maximizing success.

Key Concepts
  • Critical to Quality (CTQ) Attributes most
    important to the customer
  • Defect Failing to deliver what the customer
  • Process Capability What your process can
  • Stable Operations Ensuring consistent,
    predictable processes to improve what the
    customer perceives

An Enabler for Cultural Change
Patients View of Registration
  • How does the customer view my process?
  • What does the customer look at to measure

Time to Park Car
Walk to Procedure Area
Procedure Time
Time to drive to facility
Lobby Time
Hospitals View of Registration
Six Sigma illustrated
6.6 Defects
w i d e v a r i a n c e
No Defects
slim variance
Patients dont feel the averages, they feel the
How good are we today?
Sigma Level
Six Sigma refers to a process that produces only
3.4 Defects Per Million Opportunities
2 308,537 3
66,807 4 6,210 5
233 6 3.4
93.3 Good
99.99966 Good
How good do we need to be?
The Classical View of Quality 99 Good (Z
The Six Sigma View of Quality 99.99966 Good
(Z 6s)
20,000 lost articles of mail per hour
Seven lost articles of mail per hour
One minute of unsafe drinking water every seven
Unsafe drinking water almost 15 minutes each day
5,000 incorrect surgical operations per week
1.7 incorrect surgical operations per week
One short or long landing at most major airports
every five years
2 short or long landings at most major airports
68 wrong drug prescriptions each year
200,000 wrong drug prescriptions each year
One hour without electricity every 34 years
No electricity for almost 7 hours each month
The DMAIC Methodology
and relate it to the customer..,
... define the problem, clarify
Define CTQs
Practical Problem
...measure your target metric
and know your measure is good...
Statistical Problem
look for root causes and
generate a prioritized listing of them.
Statistical Solution
... determine and confirm the
optimal solution ...
Practical Solution
be sure the problem doesnt
come back sustain it
Sample fishbone diagram poor x-ray quality
  • Form cross-functional team
  • Construct cause-and-effect diagram, listing
    potential causes on each branch
  • Prioritize causes on each branch select
    important causes and ignore trivial ones
  • Conduct detailed analysis and develop an action
  • Follow up until action is completed and results
    are verified
  • If results are unsatisfactory, use statistical
    tools (such as Regression Analysis) to further
    analyze the problem

Key roles and responsibilities
Champions/Sponsors Trained business leaders who
lead the deployment of Six Sigma in a significant
business area
Master Black Belts Fully-trained quality leaders
responsible for Six Sigma strategy, training,
mentoring, deployment and results
Black Belts Fully-trained Six Sigma experts who
lead improvement teams, work projects across the
business and mentor Green Belts
Green Belts Fully-trained individuals who apply
Six Sigma skills to projects in their job areas
Team Members Individuals who receive specific
Six Sigma training and who support projects in
their areas
Translating Goals into Results
The Big Ys Clinical excellence Patient
safety Financial results Patient
satisfaction Physician/staff satisfaction Communit
y service
Linking Projects to Healthcare Ys
World Class Team
Top Financial Performance
Excellent Service
Clinical Quality
Wait Times/Delays
Patient Flow
Quality Measures
Core Measures Performance (CHF)
Accuracy of Patient Info
Nursing Documentation
Discharge Process
Pain Management
ICU Throughput
Communication of Quality-Public
Radiology TAT
Medical Necessity Validation
Appropriate Placement
Certifications/ Accreditations
On Base Implementation
PACU/ED Admit to Bed
POS Collections
ICU Clinical Effectiveness
Cath Lab Scheduling System
Patient Classification Process
Reconciliation of Patient Medicine
Reduce FPC No Shows
Perioperative Service Needs
Project Solutions
Performance Metrics
Critical Factors
Core Business Metrics
  • Lean Preop Process
  • Staffing/anesthesia time
  • Preference Cards
  • Equipment replenishment
  • Preop delays
  • Surgeon NA
  • Anesthesia NA
  • Equipment/ Supplies NA

First Case Start Time
  • Quality
  • Capacity
  • Net Revenue

Room Turnover Time
  • Work-Out Work Process, Roles, Responsibilities,
  • Kaizan Event TAT
  • Staff roles
  • Setup/Cleanup process
  • Communication
  • Level Loading Blocks/ Cases across days/time by
    clinical service
  • Match sched to staffing
  • New guidelines Add-ons
  • Block Time Allocation/Util
  • Case Time Alloc
  • Add-on Mgmt
  • Scheduling Guidelines

Room Utilization
Patient Safety
  • Process for identifying, reporting, taking
    corrective action
  • Anesthesia Time
  • Right Side
  • Instrument Counts

The Ultimate Goal
Becoming a Better Healthcare Provider
Patient Satisfaction
Physician Staff Satisfaction
Community Relationship
Financial Viability
Patient Safety
Performance Excellence
Projects and Work-Outs
Its really not about projects they are a means
to an end!
In simple terms
  • Listen to the customer
  • Define their expectations
  • Measure how many times we get it wrong
  • Fix it
  • Prove the fix is real and meaningful
  • Make it stick !!!!!

Related Methodologies and Change Management
Large scale improvements require precise
coordination and a common cadence to advance
62 of initiatives fail due to lack of leadership
Change Acceleration Process (CAP)
Stakeholder Analysis

Influence loop

Dr. R
Exercise Stakeholder Analysis
  • Take home assignment for your current project
  • Brainstorm key stakeholders by name
  • Plot where individuals currently are with regard
    to desired change ( current).
  • Plot where individuals need to be at the minimum
    level (X desired) in order to successfully
    accomplish desired change-identify gaps between
    current and desired.
  • Indicate how individuals are linked to each
    other, draw lines to indicate an influence link,
    using an arrow to indicate who influences whom.
  • Plan action steps for closing gaps with influence

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Work-OutTypical Session
What is Lean?
  • The relentless pursuit of the perfect process
    through waste elimination

We Spend 75-95 of Our Time Doing Things That
Increase Our Costs and Create No Value for the
In healthcare, Lean is about shortening the time
between the patient entering and leaving a care
facility by eliminating all non-value added time,
motion, and steps.
Lean Thinking Process
The 5 steps to Lean Thinking
2 Map the Value Stream
Define value from the customers perspective and
express value in terms of a specific product
Map all of the stepsvalue added non-value
addedthat bring a product of service to the
1 Specify Value
3 Establish Flow
The complete elimination of waste so all
activities create value for the customer
5 Work to Perfection
The continuous movement of products, services and
information from end to end through the process
4 Implement Pull
Nothing is done by the upstream process until the
downstream customer signals the need
What are your customers willing to pay for?
Project funnel and tool selection
Best practice, patient satisfaction results,
benchmarks, suggestions, complaints
Voice of Customer
Inefficient processes, waits, rework, errors,
substandard performance
How do you know you have a problem? Is data
available? What is expected performance or
CTQs? What is payback/benefits of project? Do
you have the appropriate sponsor?
Low Hanging Fruit
Priority Setting
Mgmt Engineering Study
Six Sigma DMAIC
Tool Selection
CQI Team
Synergistic Tools and Processes
  • Change Acceleration Process (CAP) a process
    that proactively plans for change acceptance for
    successful implementation
  • Work-Out - a process that promotes rapid problem
    solving via involvement and accountability
  • Lean - an improvement methodology focused on
    eliminating waste through detailed analysis of
    workflow in relation to time
  • Six Sigma an improvement methodology
  • driven by the statistical analysis of data
  • to identify causes of unwanted variation and

Healthcare Case Study Examples
Healthcare Project Examples
  • Improving process/safety for medication
  • Reduction in Blood Stream Infections in ICU
  • Reducing ventilator acquired pneumonia
  • Emergency Department Patient Wait Time
  • Improved Patient Throughput in Radiology
  • Reduction in Lost Films
  • MR Exam Scheduling Improvement
  • Staff Recruitment and Retention
  • Operating Room Case Cart Accuracy
  • Physician (Professional Fee) Billing Accuracy
  • Appointment Backlog for Hospital-Based Orthopedic
  • Quality of Care and Satisfaction of Families in
    Newborn ICU

Pioneers in Six Sigma for Healthcare
In March 1998, John C. Desmarais, Commonwealth
Health Corporation's President and Chief
Executive Officer, introduced CHC to Six Sigma, a
quality initiative program developed by Motorola
and perfected by General Electric.
  • By the end of 2001, over 2000 employees had
    attended at least one full day of Six Sigma
    awareness training,
  • Initial projects generated annualized savings of
    276,188 in billing, decreased annual radiology
    expenses by 595,296, and reduced errors in the
    MR ordering process by 90.
  • Within 18 months, CHC had increased efficiency,
    improved the patient experience, eliminated over
    800,000 in costs and reenergized the culture.

Commonwealth Health Corporation web site
Case Study Improving ED Throughput
Project Title ED Throughput
Project Scope In Scope - Treat to Street pts,
Staffing patterns (ED MDs RNs), Equipt, FTEs,
Registration, Lab, X-R. Out of Scope - ED Admits,
ED Hold Hours, Bed Control, Housekeeping,
Transport to Floor, MR, US, CT, Pharm.
Customer(s) Patients, Physicians
  • Potential Benefits
  • Decrease LWBS
  • Increase patient satisfaction (Press Ganey s)
  • Reduce ED LOS (Soft Dollars)

Project Description PS - Moving
Treat-to-Street patients through the ED takes
too long. PD - One-third of our patients wait
longer than 60 minutes to be seen by a physician.
  • Alignment with Strategic Plan
  • Customer Service
  • Growth
  • Efficiency

  • What is the Right Y (CTQ) to Measure? How will
    it be measured?
  • Y Door to Doc Time. From the time a patient
    enters through the door until the physician
    enters the exam room to assess the patient,
    measured in minutes.
  • What is our goal?
  • We will improve the average ED Throughput Time
    for Treat and Street Patients by 40. This will
    reduce the weighted average Door-to-Doc time from
    65 minutes to 40 minutes.
  • We will improve our throughput yield of patients
    seeing a physician within 60 minutes (USL) from
    67 current to 80. This reduction in our defect
    rate of 13 represents over 7,500 customers.
  • What are the specification limits? (LSL, USL)
    What is the Target?
  • Based upon our VOC data, we have set a USL of 60
    minutes and a Target Mean of 40 minutes.

Value Stream Map Opportunities for Performance
Door-to-Doc Subcycle
Triage EKG, Draw Blood, UA, Order X-Ray,
administer Pain med 2- RNs 1 Tech
Fax written report/ED
X-Ray In ED
Front Desk / QR
Team Area
ED Waiting Room
Call critical values
Patient Flow
People Flow (RN, MD, etc.)
E-Info Flow
Other Flow (blood, etc.)
Phone Call
Arr QR
QR Triage
Triage Bed
Bed MD
6.3 min
Patient Wait Time
11.6 min
23.5 min
22.9 min
Current Average Cycle Times
Statistical Analysis
Hypothetical Driver (X)
Statistically Proven (X)
Bed Available
Day of Week
What Xs (inputs) are causing most of our
variation? Results for Historical DOE Door to
Doctor Time Factorial Fit D2D versus Express
Care, X-Ray, Bed Open
Estimated Effects and Coefficients for D2D (coded
units) Term Effect
Coef SE Coef T P Constant
87.34 2.547 34.30
0.000 Express Care 35.56 17.78
2.547 6.98 0.000 X-Ray
36.06 18.03 2.547 7.08 0.000 Bed Open
-37.81 -18.91 2.547 -7.42
0.000 Express CareX-Ray 33.69
16.84 2.547 6.61 0.000 Express CareBed
Open 32.56 16.28 2.547 6.39
0.000 X-RayBed Open 14.06 7.03
2.547 2.76 0.025 Express CareX-RayBed
Open 5.19 2.59 2.547 1.02 0.338 S
10.1865 R-Sq 96.87 R-Sq(adj)
94.12 Analysis of Variance for D2D (coded
units) Source DF Seq SS Adj SS
Adj MS F P Main Effects 3
15979.9 15979.9 5326.6 51.33 0.000 2-Way
Interactions 3 9571.7 9571.7 3190.6 30.75
0.000 3-Way Interactions 1 107.6 107.6
107.6 1.04 0.338 Residual Error 8
830.1 830.1 103.8 Pure Error 8
830.1 830.1 103.8 Total 15
  • What do we want to know?
  • Screen Potential Causes?
  • Discover Variable Relationships?
  • Establish Operating Tolerances?
  • What Xs (inputs) have we chosen to improve?
  • Bed Availability
  • The Measure Phase data demonstrated that
    Door-to-Doctor time increased by two to
  • three times when there is no bed open for the
  • Ancillary Services
  • The data further showed that the time it takes
    to perform an X-Ray or Lab testing is
    statistically significant in relation to
    Door-to-Doctor time.
  • Express Care
  • Lower acuity patients (i.e. Level 3 / Express
    Care) wait longer to see a physician than do
    higher acuity patients (i.e. Level 1).

Value Stream Map Key Points / Opportunities for
Bedside Registration
Triage EKG, Draw Blood, UA, Order X-Ray,
administer Pain med 2- RNs 1 Tech
Non-value added step removed
Registration If rooms ful may reg pt while
Front Desk / QR
ED Waiting Room
Patient Flow
People Flow (RN, MD, etc.)
Impacts 1 Inc. Patient Satisfaction 2 Red.
time by 8.7 minutes 3 Red. variability in
E-Info Flow
Patient Wait Time
  • What is the mean and median of our process? What
    is the standard deviation?
  • Measure Phase Control Phase D
  • Mean score 64.3 minutes 39.8 minutes 38.1
  • Median 38.5 minutes 34.0 minutes 11.7
  • Standard Deviation 44.7 minutes 27.7
    minutes 38.0
  • HI/LO 241 / 11 minutes 129 / 4 minutes 46.5
    (HI outliers)
  • Range 230 minutes 125 minutes 45.7
  • What is our process capability (Z score, DPMO,
    Yield )?
  • Z Short-Term Score 1.91s 2.35s 0.44s
  • DPMO 333,333 175,000 lt109,523gt
  • Yield 66.7 82.5 15.8

  • What are our financial results? How were they
  • Our Financial Impact is 1,120,650 and reflects
    the improvement in LWBS visits and the
    corresponding admissions as well as a
    conservative (5) recognition as a result of
    throughput improvement.

What is the plan for monitoring/ auditing the
process? What is the Control Plan?

Case Study Linen Utilization
Project Title Linen Utilization Project
Description To Identify opportunities within
the organization which allows for better linen
utilization without compromising quality or
patient care.
Problem Statement Currently, our linen usage is
higher than what is expected for a facility of
our size and acuity level. We need to look for
ways to better utilize our daily linen supply and
lower our overall pounds per patient day as well
as our cost per patient day.
Project Scope The use of linen for inpatients.

What is the Right Y (CTQ) to Measure? How will
it be measured? Y Pounds Per Patient Day of
Linen Used Pounds Per Patient Day of Linen
Used by Service Line
What are the data sources? How will the data be
collected? Data Sources include the Linen
Distribution Program currently in place, as well
as national benchmark data.
What is our goal? To reduce the overall linen
utilization to between 14 and 16 pounds per
patient day.

High Level Process Map
Step 1 Inventory of linen is taken in Linen room.
Step 2 Linen order for the next day is placed
with Tartan.
Step 3 Linen is received the following morning.
Step 4 Exchange carts from previous day are
Step 5 Linen re-stock amounts are recorded in
Textile tracking program.
Step 6 Linen carts are exchanged for those
already on Nursing Units.
Step 7 Secondary deliveries are made to units as
required at 12 hour mark.

What is a defect, unit, opportunity? Defects
Missed Delivery and Stock Outs, and any reading
lt14 or gt18 lbs per patient day Units Pounds per
Patient Day Opportunity monthly data per unit
What are the specification limits? (LSL,
USL) LSL 14 Pounds per Patient Day Average USL
18 Pounds per Patient Day Average
What Xs (inputs) are causing most of our
variation? Usage variations, training, old
Graphical Analysis
(No Transcript)
Achieved goal of 14 Pounds per Patient Day.
Education and focus on Scrubs, and ancillary
usage will contribute to maintaining this goal.
What are our financial results? How were they
calculated? Our Per Patient Day costs for linen
have decreased by 20 over 2002. From an average
of 20lbs to an average of 16lbs.
What is the WWW (Who-What-When) plan for turning
the project over to the process owner? What is
the plan for monitoring/auditing the
process? The process is a permanent one and will
be tracked through reports given to the units,
Executive Sponsor, and the Linen Utilization
Committee. The Linen Utilization Committee will
oversee the process and progress.
Case Study Supply Chain Improvement
  • Customer Need
  • Four hospital system enjoying 50 market share
  • Materials management improvements needed to
    leverage economies of scale, utilize best
    practices, and prevent inefficiencies
  • Pricing structure for orthopedic implants highly
  • Inconsistent orthopedic implant utilization
  • Deficiencies in OR charge master capture
  • Gap in OR supplies between what patient pays vs.
    what hospital is charged
  • OR on hand inventory management needed

Barry D. Brown Health Education Center at Virtua
West Jersey Hospital Voorhees
Process Improvement to Reduce Cost
Reduce Costs
  • Solutions
  • Orthopedic Implant Pricing Cap Determined actual
    versus lowest and average prices to establish a
    fair cap price.
  • Orthopedic Implant Demand Matching Examined 132
    medical records and compared implants used
    against widely accepted industry criteria for
    implant selection by orthopedist
  • Charge Master Review Reviewed OR charge master
    systems and identified opportunities for
    improvement and standardization
  • Price Point Reduction Identified price reduction
  • OR Inventory Reduction HISI contracted to
    conduct physical inventories in four ORs and two
    surgical centers

Improve Quality
  • Results
  • Project results along with data shifted purchases
    to a primary orthopedic implant vendor, savings
    of 159,000 were attained.
  • Annual savings of 239,400 through demand
    matching template at all hospital sites that do
    hip and knee replacement surgery.
  • Patient billing data review in FY2000 indicated
    potential loss of greater than 200,000 annually
    due to missing charges, much of which was
    rectified with the corrections in the current
    charge masters.
  • Project savings attained totaled 63,845 plus
    shared savings with orthopedic cap project.
  • Conservative inventory reduction by facility
    Facility A 187k, Facility B 92k, Facility C
    47k, and Facility D 18k. Represents an 8
    reduction of the 4.1MM of baseline inventory on

Sustainable Results With Bottom Line Impact
Summary, Keys to Success and QA
The Big Why
Shorter ED wait times allow 28 more patients per
day to be seen, with potential financial impact
over 13 million annually at hospital in Southern
Achieving 35 higher take home baby rate with
increase in successful implantation at hospital
in Northeast
Better patient safety with 91 improvement in
post-surgery antibiotic use, delivering annual
savings over 1 million at hospital in Southeast
Culture Change
Think about it. Are the mission, vision and
values of your health system merely bullet points
on a web site, or are they clearly understood and
activated across the organization? Are people
empowered to drive change and accountable for
Keys to implementing Six Sigma in healthcare
  • Gain leadership support and dont skimp on
  • Identify opportunities and define the value
  • Ensure strategic alignment with organizational
    objectives and incentives
  • Develop a business case, identify team leaders
    and build a plan for deployment
  • Establish measurements and evaluate performance
  • Manage change through ongoing communication
  • Monitor results and sustain improvement through
    review and recognition

and network with others who have embarked on
similar initiatives!
For more information contact Carolyn
Pexton 925-275-0726 And
visit the iSixSigma healthcare portal