LEAN Healthcare: A 10x Return on Investment – The New Reality

It is one thing to pat yourself on the back for job well done. It is quite another to have a nationally recognized thought leader in process efficiency and continuous improvement acknowledge your technology as an important tool for healthcare organizations to adopt if they are serious about making sustainable changes to the way they deliver patient care and degree to which they embrace Lean Healthcare .

Focus & Leverage

Bob Sproull, a senior business consultant, speaker, and author of three books who has expertise in Healthcare, Manufacturing and MRO, gave Optimium Health and our clinical workflow suite, OPTIMI$ER, a special call out in his blog earlier this month. Below is an excerpt:

My blog is focused primarily on the Theory of Constraints and how to use it to maximize the profitability of any company. I also discuss why integrating TOC with Lean and Six Sigma is the most dynamic improvement methodology available today.

In this posting I want to shift gears a bit and talk about some real problems facing healthcare today. This posting is based upon conversations I’ve had with Vicki Harrison of Optimium Health, Inc. As you will see, Vicki’s company has some great solutions for problems that have plagued hospital perioperative services for some time. I know of these problems because I have been confronted with them on my own healthcare consulting engagements. Specifically these problems are centered on work flow into and out of surgical units.

Optimium Health has developed amazing new software that more or less synchronizes all of the required activities needed to prepare a patient for surgery. They call their product OPTIMI$ER and based upon results seen during Phase I it is worth every dollar spent.

Phase I Results Summary: $1,088,000 Net of Increased Revenue and Expense Reduction for Pre Anesthesia Screening Services: Note – Results below reflect only patient clearance process not a full perioperative setting implementation.

Click here to view Bob Sproull’s blog.

About Bob Sproull

Bob is a certified Lean Six Sigma Master Black Belt and a Theory of Constraints Jonah. He is a nationally known speaker and author of three books. His consulting engagements focus on teaching companies how to maximize their profitability through an integrated Theory of Constraints, Lean and Six Sigma (TLS) improvement methodology. He is an experienced manufacturing executive who has served as the former Manager of the Office of Continuous Improvement for Army Fleet Support and a Vice President of Quality, Engineering and Continuous Improvement for two different manufacturing companies.

LEAN Healthcare: Answering The Readmissions Challenge

A recent article in Health Leaders Media that showcases what Detroit Medical Center (DMC), an eight hospital system, is doing to answer the readmissions challenge by improving the workflow that leads up to and follows on from discharge. In fact, the caregivers at DMC’s hospitals no longer use the word “discharge” to describe the process of getting their patients out safely. “Now the word we use is transition, a much more refined process, to get our patients back into their community,” says Suzanne White, MD, the eight-hospital system’s executive vice president and chief medical officer. Optimium Health applauds the work Suzanne White and the team at DMC is doing.

Process Efficiency Can Reduce Readmissions

The challenges DMC faces with high readmission are not uncommon. And with new requirements and payment terms under the ACA, lowering patient readmission rates has become a high priority. To this end, White and her colleagues have detailed descriptions of more than 30 process steps or checks, with potential interventions, that now take place at specified points within the acute care stay. Some are tailored to where the patient is headed: home versus a skilled nursing facility, for example. But the process begins the moment a person is registered as an inpatient, and often involves agencies or care settings outside the hospital, especially private practice physicians and home health agencies. The results, a 25% readmission rate in December 2012 had fallen to 20% in January 2013 and 15% as of August 2013. For the entire article click here.

How Optimium Health Can Help

In response to the growing demand from our hospital partners, Optimium Health has developed a proven workflow technology, OPTIMI$ER, to address the workflow complexities and need for timely and accurate information exchanges between caregivers that accompany discharge planning, or transitions in inpatient care. OPTIMI$ER’s Care Management Suite will interface with existing IT systems to push and pull relevant data which eliminates duplicate entry and data entry errors, as well as to communicate patient status and next step process alerts to the relevant caregivers. Based on discharge planning best practice, the OPTIMI$ER Care Management Suite is customizable to a particular hospital’s needs.

If you would like to learn more about OPTIMI$ER Perioperative Setting or OPTIMI$ER Inpatient Care Management Suites, please contact Heather Guild at: heather@www.optimiumhealth.com.

Optimizing Patient Flow

The Institute for Healthcare Improvement (IHI) and 50+ participating hospitals have been working together to evaluate what influences the smooth and timely flow of patients through hospital departments, and to develop and implement methods for optimizing patient flow. Specific areas of their focus include:

  • Reducing waits for inpatient admission through emergency departments
  • Achieving timely and efficient transfer of patients from the intensive care unit and the post-anesthesia care unit (PACU) to medical/surgical units
  • Improving flow from the inpatient setting to long-term care facilities

LEAN Focus: Unclogging Bottlenecks in the ED, ICU, OR and Related Pre- and Post-Care Areas

IHI recently updated a white paper about how to optimize patient flow that was first released in 2003. Since workflow optimization through a combination of best practice process improvements with the overlay of technology to help orchestrate tasks and facilitate accurate and timely information exchange between caregivers is at the heart of Optimium Health’s mission, we thought our readers would appreciate reading about the work IHI is doing. Below is an excerpt from IHI’s introduction to its white paper aptly called “Optimizing Patient Flow – Moving Patients Smoothly Through Acute Care Settings”:

While few hospital areas are designed to achieve optimal flow of patients, the emergency department, intensive care unit, and operating rooms and their related pre- and post-care areas tend to be major bottlenecks because they are non-interchangeable resources. Reducing delays and unclogging bottlenecks depend on assessing and improving flow between and among these departments, and throughout the entire system, rather than in isolated departments. IHI believes that the key to improving flow lies in reducing process variation that impacts flow. While some variability is normal, other variation is not and should be eliminated. Hospitals working with IHI have tested a range of changes to reduce process variation and improve flow. These changes are described in this white paper.

Optimium Health brings over 25 years of clinical process and technology expertise to this discussion. Importantly, we ensure our clients achieve a return on investment in less than 3 months due to workflow efficiencies that lead to operational cost savings and/or incremental revenues from additional capacity to serve more patients. If you would like to learn more about how Optimium Health can cost effectively improve patient flow in your organization, please contact Heather Guild at: heather@www.optimiumhealth.com.

Breaking Through the Status Quo: Lower Costs While Delivering Value

Like a plant pushing out from a rock, the healthcare industry is being asked to overcome inertia, break through the status quo, and create the future of health care.

This apropos analogy comes from the opening page of the Ernst & Young New Horizons Health Care Industry Report 2013. The report focuses on 9 operational topics, from optimizing information technology to ensuring regulatory compliance and ethics, using case studies from hospitals across the country to illustrate common challenges and how these organizations overcame them. The report also has the endorsement from respected health care thought leaders such as Peter Pronovost, MD, and Don Berwick, MD.

A recurring theme is the potential for lowering the cost of healthcare while still creating exceptional value for patients, clinicians, supporting staff, and administrators. There is a call for hospitals to identify “waste” in how they get things done and to eliminate the “waste” by improving the processes associated with care delivery. “Waste” in this case is defined as all the tasks and activities that lead to duplications of effort, defective information exchanges, and missed steps that result in compromised outcomes. This theme is at the heart of both LEAN thinking and the OPTIMI$ER workflow technology solutions that Optimium Health has specifically designed to help streamline patient flow, lower costs, and improve patient care.

Below is an excerpt from the report:

Over the past half century in the US, innovation in biomedical science has proliferated. Yet, our system for delivering and paying for care has not kept pace with these scientific breakthroughs.

Today, spurred by government reforms and market shifts, industry stakeholders are working together to pursue system innovation with new vigor: lowering costs while delivering exceptional value, using data to improve outcomes, creating the workforce of the future to support emerging care models, managing health holistically and engaging patient to be empowered partners in their care.

This edition of New Horizons is focused on how health care innovators and change agents are addressing the challenges within their own organizations across the continuum of care, and at state and national levels.

If you would like more information on how Optimium Health can help your organization lower operational costs while improving care delivery, please contact Heather Guild at: heather@www.optimiumhealth.com.

OHI Speaks at Health Financial Management Association Mid-Atlantic Conference

On September 26th, OHI and our client, Jerry Henderson, LifeBridge Health’s VP of Perioperative Services at Sinai Hospital in Baltimore, gave a presentation at the Health Financial Management Association (HFMA) Mid-Atlantic Region Annual Conference in Virginia Beach. Over 260 healthcare executives were in attendance from Virginia, West Virginia, the District of Columbia, Maryland, and several neighboring states to learn more about the future of healthcare under the Affordable Care Act and how to operate more efficiently in order to get out from under the weight of rising healthcare costs.

Workflow Technology Drives $2MM-$3MM Bottom Line Improvement

The focus of OHI’s presentation centered on lowering costs and generating revenue in the perioperative setting using LEAN methodology and the application of workflow technology to improve resource utilization and patient flow. The case study examined performance in the clinical unit responsible for clearing patients for surgery and in which the OPTIMI$ER workflow technology was recently installed. Annualized results after one month of operation total $2MM to $3MM bottom line improvement. This includes:

  • 60% increase in staff satisfaction with regard to the patient clearance process.
  • 1-2 additional surgical cases/day due to a reduction of errors and omissions leading to surgical delays and cancellations. The estimated incremental revenue is $750k-$1.5 million.
  • A technology overlay that will facilitate the unit’s ability to bill for services currently offered free of charge – the estimated incremental revenue is $1.2 – $1.5 million.
  • 1 FTE reallocated to another service area due to a reduction manual process steps, documentation, and information transfer. An additional FTE reallocation is anticipated by year end. The estimated cost savings are $150k.
  • $20k savings in paper, ink cartridges, and fax maintenance.

The attendees, largely hospital CEO’s, CFO’s, COO’s, and revenue cycle managers were very receptive to the issues outlined and the solution offered. In particular, they acknowledged that EHR’s are not providing the workflow efficiency they had hoped for. And that an overlay solution like OPTIMI$ER that can interface with the EHR as well as other clinical and financial IT systems is a promising path to explore.

If you would like a copy of the Sinai Hospital case study or would like to speak with OHI about OPTIMI$ER, please email: heather@www.optimiumhealth.com.

Clinical Process Improvement: Inspiration from Unlikely Places

A few months ago, Optimium Health formed a strategic partnership with MS2, a health consulting firm specializing in hospital patient flow efficiency. OHI and MS2 share a firm belief that clinical process improvement is a key contributor to improving both the patient experience and the care organization’s operational performance, including lowering costs and increasing revenues.

We also share a belief that healthcare can learn from other industries to solve some of its problems.For example: it can learn from restaurants like the Cheesecake Factory, which delivers quality and consistency across more than 200 menu items in 164 locations (reference my June 7, 2013 post), and manufacturers like Toyota, which use LEAN thinking to ensure the journey of how something gets done is as important as the outcome of what gets done (reference my April 1, 2013 post). And, we also believe healthcare can learn from an item most of us keep in our kitchen drawer.

What Can We Learn From Funnels?

A few years ago, Dr. Emilio Belaval, the founder of MS2 wrote an article about Emergency Department (ED) capacity and used the analogy of how a funnel works to illustrate his points:

When a hospital doubles ED physical capacity, it never doubles inpatient capacity nor doubles the number of radiologists, consultants, lab techs, analyzers, transporters, etc. As such, even a modest increase in ED volumes puts significant strain on all the ancillary departments we need to help us service demand and the inpatient units we need to unload admitted ED patients to. This markedly increases variability in system interfaces and increases the time patients actually spend idle in ED beds.

To illustrate this, close your eyes and imagine we are pouring sand into a three-dimensional funnel. As we pour sand on the top of the funnel some sand makes it to the bottom opening and exits the funnel but, if we pour sand more briskly, the funnel will eventually fill up as sand is being poured in faster than it can exit. The sand that spills over the top (because it does no longer fits in the funnel), represents patients accumulating in the ED waiting room and hallways.

Read the full article here.

Affordable, Sustainable & Tailored Solutions

We love the funnel analogy since it combines the laws of science with what we know as “common sense” because we experience it in our everyday lives. Importantly, it helps us visualize the complexity of a clinical process issue in a simple way. Dr. Belaval goes on to write about how we can use lessons from the funnel to make sure we consider the big picture when tackling patient flow and process inefficiency. For example, fixing one thing in isolation may lead to bottlenecks upstream or downstream once the whole process is set into motion.

If you have issues with ED efficiency or clinical process issues in perioperative, chemotherapy, radiology, and other critical areas of care delivery please contact us for a free consultation. Optimum Health, in partnership with MS2 where appropriate, will do our best to find a solution that is affordable, sustainable, and tailored to your organization’s needs. Email heather@www.optimiumhealth.com.

LEAN Healthcare: What Can We Learn From Cheesecake?

The Need for Productivity Transformation

Medicine has long resisted the productivity revolutions that transformed other industries. But the explosive growth of provider systems like Medstar, Stewart, and Kaiser Permente aim to change this mindset. An article by Dr. Atul Gawande, a surgeon at Brigham & Women’s and professor at the Harvard School of Public Health, recently published in The New Yorker magazine offers some inspiration for change from an unlikely source: The Cheesecake Factory.

Below is an excerpt from the article:

The place (the Cheesecake Factory) is huge, but it’s invariably packed, and you can see why. The typical entrée is under fifteen dollars. The décor is fancy, in an accessible, Disney-cruise-ship sort of way….The waiters are efficient and friendly….They try to make you feel as if it were a special night out. As for the food….it was delicious.

The chain serves more than eighty million people per year. I pictured semi-frozen bags of beet salad shipped from Mexico, buckets of precooked pasta and production-line hummus, fish from a box. And yet nothing smacked of mass production. My beets were crisp and fresh, the hummus creamy, the salmon like butter in my mouth…The whole table was happy.

I wondered how they pulled it off. I asked one of the Cheesecake Factory line cooks how much of the food was premade. He told me that everything’s pretty much made from scratch—except the cheesecake, which actually is from a cheesecake factory, in Calabasas, California.
I’d come from the hospital that day. In medicine, too, we are trying to deliver a range of services to millions of people at a reasonable cost and with a consistent level of quality. Unlike the Cheesecake Factory, we haven’t figured out how. Our costs are soaring, the service is typically mediocre, and the quality is unreliable. Every clinician has his or her own way of doing things, and the rates of failure and complication (not to mention the costs) for a given service routinely vary by a factor of two or three, even within the same hospital.

Healthcare Must Learn From Other Industries

Gawande goes on to draw insightful observations of how The Cheesecake Factory operates with great efficiency, consistency, and quality of service and how hospitals can learn from this casual dining chain of 160 restaurants. His message is clear, healthcare needs to learn from the good work being done in other industries to lower costs, improve service, and increase customer (or patient in the case of hospitals) satisfaction in the face of increased competition.

Toyota achieved these advantages over its competition in large part thanks to LEAN manufacturing – An operational ethos which is now being embraced more openly in healthcare. Southwest Airlines has done the same through standardization of planes to improve on-time departures and arrivals, a critical component of customer satisfaction as well as the airlines cost profile and profitability.

Clinical Workflow Optimization Should Be Part of the Solution

Optimium Health could not agree more with Dr. Gawande’s message. That is why we have tailored business process management (BPM), or more simply put, workflow technology to the clinical setting. BPM has been widely used in banking, manufacturing, and many other service industries for decades. Yet, until now, in healthcare use of BPM is relatively uncharted territory.

If you would like to learn more about how Optimium Health’s HIPAA compliant solutions can complement your on-going Lean Healthcare initiatives and help to make your healthcare organization more productive with lower costs and higher measures of patient and staff satisfaction, please contact Heather Guild at: heather@www.optimiumhealth.com.

Optimium Health and MS2 Form Strategic Alliance

Thursday, May 1st, 2013 – Annapolis, MD; USA

Optimium Health is pleased to announce our strategic partnership with Medical Strategies & Management Systems (MS2), a leader in patient flow logistics whose aim is to improve operational efficiency. Optimium Health’s workflow technology overlay, OPTIMI$ER (TM), will complement MS2’s existing arsenal of tools for client engagements that require a technology solution in order to achieve optimum patient flow efficiency.

Founded in 2004 by clinicians, MS2 is a team of Hospital patient flow logistics experts focused on hospital process redesign, capacity management and operational efficiency. They help hospitals identify and solve the operational constraints that limit institutional patient flow and decrease patient satisfaction with hospital services. MS2’s mission is to help develop operationally efficient and adeptly managed provider health organizations without the need for capacity expansion, staffing increases or technology investments.

MS2 currently serves Hospitals, Healthcare Systems, Physician Groups and Healthcare Consulting Firms that need to identify, design and implement fundamental system-wide changes to address complex patient flow deficiencies. Our clients are able to increase market share, improve staff retention, obtain recognition as a service leader, increase revenue margins, and avoid costly physical capacity expansions. Some of the issues we help solve include:

Emergency Department Problems:

  • ED Overcrowding
  • Lengthy Waiting Times
  • Declining ED Revenues
  • Patients Leaving Unseen
  • Ambulance/EMS Diversions
  • Patient and Staff Dissatisfaction
  • Poor Ancillary Department Interfaces
  • High Emergency Department Boarding Hours

Hospital Operational Issues:

  • High Hospital Readmission Rates
  • Low Number of Predicted Discharges
  • Low Number of Discharges Before Noon
  • High Number of PACU Boarding Hours
  • Declining or Stagnant HCAHPS Scores
  • Lengthy Admissions/Discharge Processes
  • Poor Utilization of OR, PACU, ICU and IP Units
  • Unaddressed State Reportable Core Measures

Learn more at: https://www.ms2group.com.

Why Your Hospital Should LEAN Forward

Mark Graban, the author of Lean Hospitals, asserts that, “waste is any problem that pops up during the day that delays care.” And Christopher Kim, MD, MBA, of the Departments of Internal Medicine and Pediatrics at the University of Michigan asserts, “up to 40% of time spent in hospitals is waste.” The article from which these quotations came is nearly 5 years old but the situations it describes are no less true in 2013 than they were in 2008.

Bad Processes Lead to Waste

We whole heartedly support the hospital LEAN movement and why your hospital should LEAN forward. Bad processes lead to waste. Waste leads to higher costs, lower employee satisfaction, and compromised patient outcomes. No one wants to blindly perpetuate that destructive cycle. Equally important, in today’s environment of increasing demand for services and decreasing amounts of reimbursements, hospitals must address HOW work gets done (the process) and not simply WHAT work gets done (the task) if they are to survive the profit squeeze.

The strength of LEAN initiatives is the critical examination of clinical processes, breaking them down into parts, and eliminating waste through a series of deliberate steps. The weakness of LEAN initiatives is poor sustainability, in large part because workflow technology is not part of the LEAN strategy and people revert to old behaviors that compromise the LEAN initiative.

Technology Offers Repeatable, Measurable, Sustainable Results

Thus, whether you use our clinical workflow technology, OPTIMI$ER, or build your own process solution, we strongly advise you make workflow technology part of your LEAN strategy. Keep in mind, defining a technology solution should follow the hard work of understanding how people currently do their work, mapping the current state process, and then determining the desired future state process. There is no value in automating a bad process! Process case studies across multiple clinical settings demonstrate how technology can help orchestrate clinical workflow in a repeatable, measurable, and sustainable way leading to:

  • a reduction of errors, omissions, duplications and delays
  • an increase in financial performance, employee productivity and satisfaction, and patient safety and satisfaction
  • a return on investment that can be achieved in 3-6 months

Please contact us if you would like to discuss opportunities for you to further your efforts to LEAN forward. Email vicki@www.optimiumhealth.com.

Health IT Is Needed To Drive Operating Room Efficiency

Hospital Executives agree, Health Information Technology is a critical component for operating room staff to better manage increasing surgical case volume, to lower the cost per patient served, and to drive successful outcomes. This declaration comes from a survey conducted by independent research organization Penn Shoen Berland among 142 hospital executives including CEOs, COOs, CFOs, CIOs, and CNOs.

Aging populations with increasing needs for surgical procedures, as well as a general population with more access to healthcare are the primary reasons case volume across US operating rooms has steadily increased over the past several years. Assessing the state of operating room (OR) volume today and in the future:

  • 49% of respondents report that OR case volume has increased in the past year
  • 73% expect OR case volume to increase over the next 3 years
  • 39% seeing an increase for inpatient cases and 91% anticipating an increase in outpatient cases

In order to meet increasing demand with the resources they have today, more than 79% of decision-makers agree that Health IT solutions tailored to the way ORs work will drive success inside the OR. The executives go further to say that the top 4 strategies to help reduce escalating OR costs are:

  • Increasing OR efficiency and patient throughput (73%)
  • More closely managing overall workflow (57%)
  • Cutting spending on supplies (52%)
  • Reducing overtime (35%)

The top 3 perioperative IT capabilities executives want for OR management are:

  • Scheduling (20%)
  • Seamless integration between departments and systems (16%)
  • Information capabilities such as data storage/audit trail; real-time data; EHR (12%)

Finally, 76% of executives say that “scheduling the OR is inherently different from scheduling other services in the hospital. And, therefore requires a uniquely tailored process and IT solution.”

Clearly, these executives see perioperative IT solutions as having tremendous potential to help control costs while delivering efficiencies that can help hospitals meet the demands of rising surgical volumes. Prior to the introduction of the OPTIMI$ER Surgical Workflow Technology Suite, there have been no orchestration overlay solutions that streamline and guide care givers through the 100-200 steps necessary to get each patient to surgery. Because OPTIMI$ER increases the efficiency of handoffs, and increases the communication between people and systems, it can greatly enhance the functionality of legacy IT and processes that are currently in place. OPTIMI$ER is the game-changer:

  • OPTIMI$ER interfaces with most legacy systems and will provide mechanisms that enable the automated “pull” and “push” of data with those systems in such a way that workflows are enhanced.
  • OPTIMI$ER will guide caregivers through all the tasks and information exchanges necessary to get a surgical patient from first appointment to first incision, seamlessly and safely.
  • OPTIMI$ER was designed with the perioperative care giver in mind – it is not an off the shelf process management system.

If your hospital or surgical group practice sees a similar demand for ORs on the horizon and you question whether or not your current IT configuration will drive operating room efficiency necessary to meet increasing demand, please contact Vicki Harrison at vicki@www.optimiumhealth.com.