Six Sigma: Breakthrough Performance for Healthcare Providers Ian R. Lazarus, FACHE May 29, 2003

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Six SigmaBreakthrough Performancefor
Healthcare ProvidersIan R. Lazarus, FACHEMay
29, 2003
6s
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Creative Healthcare USA
www.creative-healthcare.com
The Mission of Creative Healthcare is to work
collaboratively with healthcare providers and
suppliers to optimize industry performance.
The Vision of Creative Healthcare is to become
the leading provider of process improvement
methodologies to the healthcare industry, a
trusted consulting partner, training provider,
and thought-leader for healthcare providers and
suppliers.
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Six Sigma.everywhere you look!

• Professional Healthcare Conferences
• American College of Healthcare Execs
• Institute for Health Improvement
• American Assoc of Health Plans
• IQPC, ISSSP, others
• Healthcare Trade Magazines
• Managed Healthcare
• Modern Physician
• Group Practice Journal
• Healthcare Executive (ACHE)
• Hospitals and Health Networks (AHA)
• Quality Insider

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What is Six Sigma?
6s
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Six Sigma is Data Driven

• When data is derived from events in the form of
  measurements, it becomes actionable information.
  
• What level of analysis does your organization
  view data?
• We only use experience, not data
• We collect data but never look at it
• We collect data, but just look at the numbers
• We group the data so as to form charts and
  graphs
• We use sample data and generate descriptive
  statistics
• We use sample data and generate inferential
  statistics

Six Sigma says You are what you measure!
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Six Sigma is Proven Project Management

Define

• Problem Stmt
• Project Goal
• Benchmarking
• Establish PFD
• Collect data

Measure

• Data integrity
• Measurement
• Capability est.
• Refinement

Analyze
Improve
Control

• FMEA
• Anova
• Chi Square
• Proportions Testing
• Means Testing
• Variance Testing
• Regression
• Multifactor
• Experiments
• Critical X determination

• Multifactor
• Experiments
• Brainstorming
• Simulations
• Mistake-proofing

• SPC
• Control Plans
• Maintenance Plans
• FMEA completion

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Six Sigma is a Philosophy Culture
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Six Sigma is a Management System

• Strategic Sigma answers key strategic questions
• What are the top level goals and strategy of the
  organization?
• Who are the major customers?
• What are the core competencies/processes?
• What are the key macro processes?
• What are the enabling processes?

Executive Staff
Strategic
Major Minor Operational Managers
Operational Goals
Operational
BB/GB
Tactical / Process
Six Sigma is a tool to help execute the strategy
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Six Sigma is Process Improvement
In-Process Variables
X2
X1
X1
X3
Process Output Variable
X2
Customer Requirements (VOC)
Process Input Variables
Process
Y (VOP)
X3
Xn
Critical To Satisfaction (CTS)
Delivery Quality Cost CTD
CTQ CTC
Control the Xs (process variables) to achieve
the desired Y (process output) to satisfy the
customer needs
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The Objective of Six Sigma

• Identify and reduce variation
• Identify and eliminate NVA activity
• Understand and optimize y f (x1x2x3.xn)

Y f (x)
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A Six Sigma Process
m
USL
LSL
T
s
s
s
s
s
s
A six-sigma (6s) process
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Why Six Sigma? Because 99 is NOT good enough!

To Err Is Human, Institute Of Medicine, June
2000, p33.
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Why Six Sigma?
Mammography Screening
PPM
IRS - Tax Advice (phone-in) (140,000 PPM)
Flu Immunizations
Doctor Prescription Writing
Post Heart Attack Medications
Low Back Tx
Claims Payment Errors
Airline Baggage Handling
Avoidable Lost Time Cases
Difficulty with Referrals
U. S. Industry Best-in-Class
Domestic Airline Flight Fatality Rate (0.43 PPM)
1
50 31 7 1 .02 .0003 1 2 3 4 5 6
DEFECTS SIGMA
Sigma Scale of Measure
In many categories, healthcare performance is
less effective than airline baggage handling!
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Why Six Sigma?

• 6s CEO Since we started Six Sigma, weve been
  retaining more people. Our turnover rate fell
  from 24 a year ago to 16 this year, and to 11
  in the past four months.
• 6s Pioneer Six Sigma is NOT the flavor of the
  month. Its a universal language, and has given
  us better customer intimacy and trust.
• 6s Client People are now talking about using
  data to make decisions.
• 6s CEO In our war on medical errors, Six Sigma
  has been absolutely useful for us.
• 6s Blackbelt People love the methodologies
  because they are tired of forever committees
• 6s Pioneer Six Sigma can have a greater impact
  in healthcare than in any other industry
• 6s CEO This is the single most important thing
  we have done in the history of our organization

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Why Six Sigma?
SIX SIGMA (DMAIC)
2000-2001
CARE MANAGEMENT INSTITUTE (PDSA)(HPT)(HBSI)
A MORAL OBLIGATION TO IMPROVE
1999
OPERATIONS REDESIGN
TOTAL QUALITY MANANGEMENT (FADE)
1996
CONTINUOUS QUALITY IMPROVEMENT (QATS)
1995
1992
VALUE IMPROVEMENT PROGRAM
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Six Sigma This is not your fathers TQM!

• TQM, CQI attributes
• Typically narrow in scope (grass roots)
• Quality focus

• Six Sigma attributes
• Broad in potential and impact (top/down)
• Quality and Profit focus

Adapted from Leading the Health Care
Revolution, Kissler 1996
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Six Sigma This is not your fathers TQM!

• TQM, CQI attributes
• Typically narrow in scope (grass roots)
• Quality focus
• Incremental change
• Improvement goal 10-15
• Goal is more with more

• Six Sigma attributes
• Broad in potential and impact (top/down)
• Quality and Profit focus
• Disruptive innovation
• Improvement goal 50-100
• Goal is more with less

Adapted from Leading the Health Care
Revolution, Kissler 1996
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Six Sigma This is not your fathers TQM!

• TQM, CQI attributes
• Typically narrow in scope (grass roots)
• Quality focus
• Incremental change
• Improvement goal 10-15
• Goal is more with more
• Less emphasis on statistical analysis and control
  techniques

• Six Sigma attributes
• Broad in potential and impact (top/down)
• Quality and Profit focus
• Disruptive innovation
• Improvement goal 50-100
• Goal is more with less
• Statistical rigor reveals most defective part
  of process
• Opp. for cultural transformation
• Results vs. Recommendations

Adapted from Leading the Health Care
Revolution, Kissler 1996
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The Language of Six Sigma
6s
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Introducing The Hidden Hospital
Patient
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The Hidden Hospital
98 Customer Quality
OK
First Time Yield
Operation
Inputs
Inspect
65
NOT OK
Rework
98 Yield After Inspection
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Rework 20-30
Hidden Hospital

• NVA and high s activities in healthcare
• Missing medication
• Reworked prescriptions
• Redundant labwork and tests
• Redundant paperwork
• Patients waiting for a bed
• Patient transfers
• Process bottlenecks
• Denied reimbursement

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Whats going on here? The impact of variation on
system performance
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Whats going on here? The impact of variation on
system performance
Impact of variation
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Whats going on here? The impact of variation on
system performance

• Variation is a given and can never be
  eliminatedjust mitigated in its effects
• Variation is additive and subject to spoilage
• Variation is the enemy of best practices
• Only two ways to increase performance in closed
  systems
• Increasing capacity
• Reducing variation
• Reducing variation increases service levels
  and/or capacity

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Six Sigma Improvement Strategy
Unpredictable
Off-Center
Target
USL
LSL
USL
LSL
Centered
Center Process
Reduce spread
USL
LSL
Customers experience our variation, not our
averages
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Defining Customer Specifications
Customer Perspective

• Key requirement is to understand the customer
  and the relationship CTS CTD CTQ CTC
• From this perspective, determine how much of the
  customers problem you are going to solve
• Finally, establish the parameters of the project
  in terms of Need, Measure and Specification

CTS
Scope?
Patient Discharged or Admitted
Patient Presents
Patient Triaged
Patient Disposition
We exit Define when we know our customer(s) and
the problem we are going to solve for them
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What is a Specification?

• Customer specified target
• Point beyond which process is producing defects
• Key determinant of Process Capability
• Established no later than Measure
• Required to establish Sigma level
• Distinguish between VOC VOP

We exit Define when we know our customer(s) and
the problem we are going to solve for them
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The Voice Of The Process
X
Z
s
Improvement of the process depends on The Voice
of the Customer
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The Essence Of Capability
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We exit Measure when we can establish
Capability ...with reliable measurements
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An Alternative to Six Sigma An
Exercise in Inspection

• Congratulations. You have just been hired as a
  Flex Inspector. The 6th letter of the alphabet
  has been deemed a defect. Count the number of
  defects in the following passage
• The necessity of training farm hands for first
  class farms in the fatherly handling of farm live
  stock is foremost in the eyes of farm owners.
  Since the forefathers of the farm owners trained
  the farm hands for first class farms in the
  fatherly handling of farm live stock, the farm
  owners feel they should carry on with the family
  tradition of training farm hands of first class
  farmers in the fatherly handling of farm live
  stock because they believe it is the basis of
  good fundamental farm management.

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The Essence of Data Integrity Analysis
True Process Variation
Medical Technology
Report
X
Process Meas ?
2
Process
X
Measurement Process
CTS
Y
X
X
Actual Variation
Observed Variation
Measurement Variation


Gage RR

• People
• Process
• Definitions

Medical Technology
Gauge R R studies are needed to validate data
integrity
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Six Sigma Case Studies
6s
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Case Study ED Throughput
ED monthly volumes 10/00 5/01 32,324 5.8
increase 10/99 5/00 30,561 7.6 increase 10/98
5/99 28,390 Diversion Hours
2001 388 74 increase 2000 222 44
increase 1999 154 Patient Walkouts 10/00
5/2001 302 272 increase 10/99 5/2000 111
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Step One Defining the Project
Q What are the obstacles to achieving a 70
reduction in walkouts and diversion? Obstacle
Score Getting patients out of the department
(esp inpatients) 80 No plan for
backup/overflow 53 Faster cycle time on lab
xray 49 Lack of quick registration 38 Need
universal guidelines for decision
making 28 Better utilization of resources
(espec. inpatient) 23 Not enough
personnel 22 Poor physical layout 19 Lack
of professional staff 17 Too many people
involved in too many steps 17 Not enough trauma
resources 13 Better cooperation with
MDs 13 Dependence on multiple
departments 12 Fluctuating staff and MD
resources 10 Dont pay for performance
9 Poor communication with other departments
7
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Step Two Measuring ED Capability
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Measuring Bed Control Cycle Time
Secretary informed admission pending
Reservation Received
Patient Transported
Room Requested via Bed Control
Sampling Plan Samples taken at two intervals
Dec 2000 (n100) and June 2001 (n300).
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Rep locates floor w/ avail beds or pages floor
where disch is planned
ICU, Tele or M/S?
ED phys submits orders for admission
Bed Control pages Admin. Rep
On Call MD, Hospitalist or PCP identified to
accept Admit
ED Secretary contacts Bed Control
ICU, Tele
ICU, Tele or M/S?
Bed Avail?
MD writes orders for ICU/Tele
N
M/S
Possible additional tests, MRI, cath lab, etc
Y
ICU, Tele
BC contacts charge nurse to get bed assigt
RN Consult
Secy notifies case mgr. if avail.
BC enters room assig in PAS
Patient waits in ED bed
N
Is room clean and ready?
Is patient in ED done w/tests?
BC calls ED Secy to advise room
BC contacts Admissions to advise of room
Case Mgr meets with family members
Y
N
Y
Nurse identified to transport patient
Key BC bed control ICU intensive care Tele
telemetry M/S med/surgical PCP personal
MD PAS patient accounting system
ED waits for return of patient /or tests
Bed Control Process Six Sigma Analysis Measuremen
t Phase
Is patient on fluids or monitor?
Patient physically transported out of dept
Y
N
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Step Three Analyzing Results
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Analyzing Results - Bed Control Cycle Time
Practical interpretation 35 of the time spent
with patients is focused on
getting them out of the dept.
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Analyzing Results - Bed Control by Bed Type.A
Future Opportunity?
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Step FourImprovement Recommendations

• Process violates 2 fundamental rules of Six
  Sigma
• Inspection is unproductive
• Interim process steps reduce potential
  productivity
• Recommended process streamlining techniques
• Redeploy Administrative Rep. Position
• Revise reporting relationship directly to Nursing
  Admin
• Implemented use of IT application for
  housekeeping
• Recommended repeat measurements to test
  hypothesis
• Null hypothesis No impact from Improvements
• Alternative Improvements significantly reduce
  Cycle Time

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Improvement Phase Validating the Solution
Two-Sample T-Test and CI CT - After, CT -
Before Two-sample T for Cycle Time - After vs
Before N Mean StDev SE
Mean CT - After 192 1.211 0.551
0.040 CT - Before 304 1.330 0.734
0.042 Difference mu CT - After - mu CT -
Before Estimate for difference -0.1191 95
upper bound for difference -0.0237 T-Test of
difference 0 (vs lt) T-Value -2.06 P-Value
0.020 DF 479
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Statistical tests unequivocally validate the
cause and effect relationship
?2
?1
Before
After
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Improvement Phase Validating the Solution
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Practical interpretation of Improvement Phase

• Results of Hypothesis Test
• 9.9 improvement in RTY
• 50 reduction in diversion hours 14.06 vs
  27.12 YTD
• Savings estimate
• Improved RTY from 5.20 pts/hr to 5.29 pts/hr
• Improved contribution to profits 591,116
• Does not include redeployed salary
• Does not include impact of accelerating inpatient
  revenue
• Other benefits the soft side of Six Sigma

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Step Five Controlling the Process via the FMEA
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Sustaining the improvement - Control Charts
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Closing Thoughts

• Healthcare providers have an obligation
  to at least understand Six Sigma
• Implementation options provide flexibility in
  adoption (make vs. buy)
• Increased public reporting provide one more
  component of urgency
• Six Sigma can impact positively the largest and
  smallest of healthcare organizations
• Six Sigma is a powerful legacy CEOs can offer
  their organization and employees

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Six Sigma in Healthcare our customers
deserve it... working
together, we can
get there!
6s