St. Louis Employs Lean/Six Sigma to Improve Clinical Productivity
September 26, 2010
Posted by chcablogadmin in : Cost Reduction, Innovation, Leadership
Many of you have employed innovative processes and business principles to improve efficiency and control costs. We’ve heard about Seattle and Miami’s efforts in this arena and now Lee Fetter shares St. Louis’ experience. These success stories are important for colleagues to hear; please keep sharing. And, be watching later this fall for CHCA’s Emerging Profiles Practice paper on this project. – Don
Lean/Six Sigma Processes Improve Clinical Productivity
by Lee F. Fetter, BJC Group President
President, St. Louis Children’s Hospital
Lee Fetter
For the past three years, St. Louis Children’s Hospital has focused heavily on improving enterprise-wide cost management and labor productivity. To do this, we employed Lean/Six Sigma process improvement methodologies as the infrastructure. We started our improvement initiatives four years ago, focusing initially on clinical quality and patient flow initiatives, including Blood Stream Infections (BSI) and Emergency Department Left Without Being Seen (LWBS). We significantly improved outcomes in these areas—BSIs in the NICU reduced by 75% and Emergency Department LWBS reduced by 40%. Given the success, we logically added labor productivity initiatives to our organizational project portfolio as a step toward improving cost management.
Patient and Employee Satisfaction Important Consideration in Process
Historical data analysis showed that we could gain the most from a labor productivity improvement initiative in Respiratory Care, Radiology, General Medicine/Surgery Inpatient Units and Food Service. For example, Respiratory Care was 6 FTEs over budget for 2007, and General Medicine and Surgery Inpatient Units were both 4 FTEs over budget for the same period. For Food Service, we targeted labor productivity improvement for our Dining On Call (room service program) implementation across inpatient units. Four FTEs were required to administer the program. These FTEs were unbudgeted and therefore would have to come from departmental efficiency savings.
Given the large negative labor productivity variance, the business case for working in these areas was obvious. However, we questioned how we could attain labor productivity improvement without compromising employee and patient satisfaction. We assumed that, if executed poorly, labor productivity initiatives would cause a negative impact on employee satisfaction. In essence, if you improve labor productivity without improving efficiency (i.e. eliminate waste and non-value-added activity), then you end up requiring staff to work harder to achieve the same results. In health care, it’s intuitive to believe that if employee satisfaction drops then patient satisfaction will be impacted as well. With this in mind, we decided that our success would not solely be defined by labor productivity improvement in any given area. Employee satisfaction and patient satisfaction must remain unchanged or, hopefully, enhanced.
In general, our labor productivity project teams have followed the standard Lean/Six Sigma approach to achieve improvement. This approach involves creating cross-functional teams, defining the process and associated inefficiency (waste or non-value-added activity) relative to workflow, removing the waste, implementing improvements and sustaining the gains.
Success Factors
Using our General Medicine Inpatient Unit as an example, we illustrate several critical success factors that were common across all of our labor productivity projects:
- Establish stakeholder buy-in – The project team included staff RNs, charge RNs, patient care associates (PCAs), physicians, financial analysts, a Lean Six/Sigma process improvement expert and the department director. Ad hoc members included representatives from Materials Management, Child Life, Food & Nutrition, Housekeeping and Pharmacy departments. For the primary stakeholders (RNs, physicians, PCAs), we conducted an analysis to understand their level of commitment to the project objective. From the results, we created specific engagement strategies for each stakeholder in order to honor what they wanted to get out of the project. For example, our physicians were concerned that any efficiency gains would reduce available time for teaching, so we made sure that improvements did not add time to their schedule, nor take time away from teaching. Staff RNs were concerned about having more work to do with fewer staff. We eased their concerns by reinforcing expectations for improvement while being very receptive to staff feedback throughout the project. (more…)
GPO Industry Shuffles the Deck
September 19, 2010
Posted by chcablogadmin in : Group Purchasing
Two interesting developments occurred this week in the GPO industry. They are perhaps leading indicators of the changes in the industry and how they may impact CHCA and our Owner Hospitals. The first involves the acquisition of The Broadlane Group by MedAssets Inc. (See highlights below or link to full article.) MedAssets Inc. has made a number of key acquisitions in the past two or three years to strengthen their portfolio of non-GPO services. Broadlane has some excellent programs in supply-chain solutions and workforce management as well as an extremely compliant GPO program. MedAssets Inc. also recently made an unsolicited attempt to buy the University HealthSystem Consortium in a similar fashion to their CHCA approach a few years back.
The second development is the decision to close down Consorta after having aligned with HealthTrust Purchasing Group. (See highlights below or link to full article.) Consorta was formed by many of the large Catholic systems to concentrate both on group purchasing and faith-based health care. The group was never able to amass enough purchasing volume and made a well-thought-out decision to align with HealthTrust which is composed primarily of HCA and other for-profit chains. Consorta had not developed alternative business lines or value propositions for its owner systems.
The industry is now very well positioned with the five or six major group purchasing organizations all having sufficient volume to maintain clout with the vendor community. Each GPO will develop additional value services for the members and owners as they try to differentiate their positions in the marketplace. Groups like CHCA, Greater New York Hospital Association and Yankee Alliance along with the 125 integrated delivery systems will seek a best-of-breed positioning with these GPOs while offering niche services to their constituents. The industry is very united around the key issues addressed by congressional oversight and working well on issues of transparency, bar coding, drug prices, vendor credentialing and effective supply-chain.
MedAssets to acquire Broadlane for $850M
MedAssets Supply Chain Systems (Alpharetta, GA) announced it will acquire The Broadlane Group (Dallas, TX) for approximately $850 million. Broadlane is mostly owned by private-equity firm TowerBrook Capital Partners LP. Terms of the acquisition call for MedAssets to initially pay $725 million at closing and an additional $125 million in January 2012. The combined company will offer supply-chain solutions, outsourcing and workforce-management services. MedAssets expects the deal to increase adjusted earnings per share by between $0.05 and $0.10 in 2011 and to increase cost savings by at least $20 million of cost savings. The acquisition is expected to close in 60 to 90 days. MedAssets will fund the deal through financial commitments from JP Morgan and Barclays Capital.
Consorta to Cease Operations
Consorta Inc (Schaumburg, IL) announced that its board recently reassessed the partnership between Consorta and HealthTrust Purchasing Group (Brentwood, TN) and now plans to transfer its remaining GPO operations to HealthTrust. Consorta will cease operations on December 31, 2010. Consorta and HealthTrust partnered in 2007 and over three years, most GPO operations have been transitioned to HealthTrust. Consorta anticipates that it will take several months for it to wind down operations, and the transition should be complete by the end of 2010. Consorta will remain as the corporate entity that binds shareholders together and brings their collective voice to HealthTrust, but it will not employ staff or provide any additional GPO services.
AHRQ Awards $8.9 Million Grant to PRIS and CHCA for New Database to Measure Comparative Effectiveness
September 12, 2010
Posted by chcablogadmin in : Academic Medicine, Innovation, Quality
We are extremely excited about receiving the AHRQ grant and continuing our successful collaboration with the PRIS network. Dr. Ron Keren of the Children’s Hospital of Philadelphia describes the project and the relationship with CHCA. This is an amazing affirmation of our Owner Hospitals’ leadership in the improvement and data arena. – Don
The Agency for Healthcare Research and Quality has awarded the Pediatric Research in Inpatient Settings (PRIS) network and CHCA a three-year, $8.9 million grant to create an infrastructure for comparative effectiveness research. Specifically, the project will augment PHIS with laboratory and radiology results from six children’s hospitals across multiple sites of care—inpatient, outpatient, emergency department and day surgery. This new combined clinical and administrative data will be called “PHIS+.” Researchers will then be able to generate new high quality evidence on the comparative effectiveness of health care interventions for hospitalized children.
Ron Keren, M.D., MPH
“The addition of clinical data, such as laboratory, microbiology, and radiology results, will significantly expand the scope of questions and outcomes that pediatric researchers will be able to study. CHCA is in a unique position to disseminate the results of the comparative effectiveness research projects that will result from the AHRQ grant. PRIS investigators hope that the PHIS+ database will be used to measure quality of care, and CHCA can play a role in organizing quality improvement collaboratives that utilize the PHIS+ data,” said Principal Investigator Ron Keren, M.D, MPH, Associate Professor of Pediatrics and Director of the Center for Pediatric Clinical Effectiveness, Children’s Hospital of Philadelphia.
CHCA will receive $1.2 million to develop the database and for support of the research efforts to follow. The first 18 months of the project to begin Sept. 30 will be spent on creating the database, the infrastructure to support it, and collecting data from the six participating hospitals. The second 18 months will be spent researching the data for several proposed comparative effectiveness projects.
Dr. Keren described the relationship between the PRIS network and CHCA. ”The PRIS co-investigators working on the PHIS+ project have a long history of working with CHCA staff to conduct comparative effectiveness research,” he stated. “Collectively, they have published 19 research papers using the PHIS database and 9 more papers are currently under review with scientific journals.”
According to Dr. Keren, the PHIS+ project will build the data platform for hospitals to make advances in the following areas:
- Make the most efficient use of their diagnostic armamentarium (i.e. laboratory testing and imaging studies) to predict outcomes, select appropriate interventions, and improve the health status of children;
- Apply state-of-the-art observational study design and analysis to existing data in administrative and clinical databases to evaluate therapeutic, prognostic, and diagnostic strategies for conditions for which randomized controlled trials are not feasible;
- Perform economic evaluations of inpatient management strategies to inform resource allocation and, coupled with outcomes measurement, better understand value; and
- Develop quality measures and severity adjustment tools to study inpatient quality (comparing hospitals, providers, systems) across multiple institutions using large administrative and clinical databases.
The project team will also be looking at whether the database can be rolled out to all CHCA Owner Hospitals in a cost effective way. The six hospitals participating are Children’s Hospital of Philadelphia, Primary Children’s Hospital/Salt Lake City, Children’s Hospital Boston, Cincinnati Children’s Medical Center, Seattle Children’s Hospital and Pittsburgh Children’s Hospital.
If you have any questions, please contact Matt Hall(matt.hall@chca.com), one of the CHCA principal investigators on the project.
add a commentProject on Integrated Delivery Systems and Financing Models Frames Critical Discussion
September 12, 2010
Posted by chcablogadmin in : Financial Viability, Healthcare Reform, Leadership
A current research project is bringing hospital experts to the table across several disciplines to begin to strategize viable finance models and care delivery models in anticipation of reform constraints. Larry Tubb, Senior Vice President for System Planning at Cook Children’s Health System in Fort Worth, is part of the group and weighs in with his feedback. — Don
Can children’s hospitals create a range of financing and delivery models under the new consolidation and reimbursement pressures of health reform? A CHCA research project is trying to answer that question. Last week, 14 hospital representatives as well as those from NACHRI and the American Academy of Pediatrics participated in a roundtable discussion at Children’s Mercy Hospital and Clinics, Kansas City.
The workshop was one step in a project that began last April. Kurt Salmon Associates and CSC are the consultants on the project. Earlier this year, key attributes of integrated delivery systems were identified by the Strategic Planning and Business Development Forum group followed by the consultants profiling Owner Hospital current financing models and risk arrangements. Those results were the basis for the recent workshop.
Larry Tubb
“Research endeavors such as this keep us engaged and current. Information becomes critical in this environment.” — Larry Tubb
“The consultants have done good preliminary work including giving us the structure useful to define our talking points — reform isn’t well defined, there are a lot of avenues to chase down,” shared Tubb. “Framing the discussion is step one and we now have the right structure to do that. It is also critical that other hospital perspectives be considered as well.”
“This project will help inform CEOs of key issues and provide a framework for them to discuss with their boards,” Tubb added. “Implications of reform and reimbursement are very confusing for experts and especially our boards. Someone shared a great quote at the meeting ‘uncertain implementation of unstable legislation’. The resulting work from this project will allow us to communicate with boards accurately and clearly.”
“We are looking at a long-term process,” he stated. “The engines don’t get turned on until 2014 which creates a unique set of challenges. Accountable Care Organizations will be a critical component, both for adult and pediatric care systems. But, there is no clear definition of what it is and what it will end up looking like. Our group discussion focused on managed care organizations as the tool by which ACOs might be implemented, but there are certainly other vehicles to manage risk. And, the ACO model might be applicable only to government payors.”
“What struck me is that all of the hospitals at the table had taken different approaches to managing risk and delivering care and they worked well in past,” noted Tubb. “We operate in different socio-economic environments, competitive markets and state funding structures. Even though we all provide pediatric care, there is uniqueness to each facility. We may have to customize our approach.”
“I also had the realization that there is no clear winner in financing models but there are great ideas out there. We need to figure out how to optimize the best ideas, but it probably won’t be one-size fits all,” Tubb explained. “Other strategies that merit discussion are contract negotiations and partnerships to share risks and benefits. We need to hone our coping skills and ask how we continue with the new rules.”
“We also all have a uniform concern about resources — primary care is the thrust of health care reform but the number of providers is declining,” explained Tubb. “It may take awhile to turn this trend around and make it financial viable to provide primary care. Who is going to be providing the care? We don’t have a solution but we are all mindful.”
Tubb concluded, “Finally, everyone present agreed that it is vital for CHCA to continue to help present the case for the value of children’s health — medical care along with wellness and prevention.”
In October, the Revenue Cycle Forum members will discuss reimbursement trends and the implications for range of financing models. Final results will be presented to Owner Hospital CEOs at the November Executive Dialogue. Next spring, plans include having COOs and CFOs further discuss the results and implications at their Forum meetings. In addition, CFOs are also providing input to the project.
If you have additional questions about this project, please contact Jacqueline Kueser (Jacqueline.kueser@chca.com).
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