Lean Six Sigma Applications in Healthcare

Making progress despite the challenges

Published: Thursday, April 14, 2016 - 14:54

Editor’s note: This is an excerpt from the new book, Innovating Lean Six Sigma, by Kimberly Watson-Hemphill and Kristine Nissen Bradley.

Like every company, healthcare businesses do their work through processes, and any process can be studied and improved using basic lean Six Sigma methods. Figure 1 shows a process view of a healthcare company, where the core value stream is built around having a patient arrive, receive treatment (or not), and then leave. The treatments vary, and how the entrance and exit take place will change from patient to patient and facility to facility, but the basic flow of entrance–treatment–exit is universal.

As with any other business, if the core value stream of a healthcare organization is to function effectively, there have to be many support processes. These include the administrative functions that allow the hospital to run effectively and the supply chain operations that provide the needed supplies and equipment.

Most of the entrance, exit, and support processes are the same kind of transactional processes that occur in any business. Other processes are basically logistics—making sure that the right supplies, equipment, and medications are where they need to be, in the right quantity, and at the right time.

Once you start looking at these functions as processes, it becomes clear that there are many opportunities for applying lean Six Sigma to make improvements. Example projects in each of these areas are shown in figure 2.

Lean Six Sigma has already been very successful in many healthcare organizations. For example, a hospital was averaging 90 minutes to complete the turnover of operating rooms used for hip and knee replacements. Using lean tools—including value stream maps, waste assessments, 5S methods, and quick changeover—the hospital was able to reduce turnover to less than 30 minutes, saving 60 minutes in cycle time. That made the rooms available for additional operational procedures each day, meaning that more patients could receive treatment more quickly. In addition, the hospital replicated the ideas with similar procedures used in other surgeries, and saw gains in multiple areas.

Figure 1: Healthcare core processes

Figure 2: Example LSS projects in healthcare. Click here for larger image.

Here is a sample of other ways in which healthcare organizations have used lean Six Sigma to create operational improvements:
• A healthcare provider system in New Jersey has had a vigorous Six Sigma program in place for several years as part of its initiative to achieve operational excellence. In one project focused on congestive heart failure, length of stay was reduced from six to four days, and chart consistency improved from 67 percent to 93 percent.
• A medical center in Connecticut achieved a 75-percent reduction in bloodstream infection rates in the surgical intensive care unit, with $1.2 million annually in estimated savings.
• One project at a university medical center’s cath lab increased available capacity by 2.08 patients per lab per weekday, with a potential revenue impact of $5.2 million annually.
• A specialty hospital in Rhode Island successfully used Six Sigma and change management to standardize operating procedures for embryo transfer, yielding a 35-percent increase in implantation rates.
• A clinic identified that it was losing thousands of dollars each month as a result of outdated medications and medical supplies. Applying the lean technique known as a “two-bin replenishment pull system” throughout the clinic allowed it to eliminate significant costs associated with outdated medications and medical supplies each month.
• A hospital in the southwestern United States had data showing that 13 percent of billings were being rejected by the insurance carriers because of incomplete data, such as missing social security numbers, incorrect addresses, diagnosis codes not matching, and the like. Improving its third-party billing system is saving the hospital $5 million per quarter.

Reducing complexity

In the world of quality improvement, complexity is an unparalleled source of waste, delays, and errors in processes. Some complexity in healthcare organizations is imposed from the outside by regulations, insurers, and government agencies, and there may not be much that they can do about that. But there is also a significant amount of complexity that is self-induced—and that can be addressed with lean Six Sigma.

Healthcare organizations can be their own worst enemies in some ways, creating internal complexity that imposes enormous but underappreciated costs. One example is the standard practice of allowing clinics to act independently. When we visit a clinic, if we ask the staff members, “Who do you work for?” the answers are typically either “I work for this clinical area” or “I work for that doctor.” People do not say, “I work for the XYZ Healthcare System.” There is a mindset in many clinics and hospitals that allows clinical areas to behave as if they were private practices.

That independence and control sounds great from the viewpoint of the clinical specialties, but it’s not good for the organization. These clinical areas tend to prioritize what is best for them individually, not what serves the organization overall. That level of independence would not be tolerated in other kinds of organizations; a bank, for example, would never consider allowing the tellers at each of its 5,600 branches to decide on their own way of conducting work!

Yet in healthcare, independence and control for each clinical area impose additional complexities on the organization as a result of these decisions. Each area will often expect to be able to customize everything about how its practice is run. For example, one clinic had 200 different consent forms because each clinical area felt that it had to add something specific to its version of the basic consent form. (The clinic later standardized on three consent forms, with additional specific information taken at the time of the patient's visit. This eliminated massive amounts of paperwork, reduced clinical editing errors, and simplified medical records management.)

Some healthcare organizations operate with a physician- or specialty-centered mindset, and changing that focus will not be popular. But if you understand the costs that complexity imposes on a process, and the cumulative effect on the organization’s efficiency and profitability, you will realize that the “private practice” approach, when implemented in a large healthcare system, imposes costs that no organization can support for any length of time. Your guide has to be what is best for both the patients and the business. Lean Six Sigma methodologies have the benefit of reducing organizational complexity, thus freeing up physicians and clinicians to spend more of their valuable time on patient care.

We are not advocating that all decision making be removed from the physician or clinical area’s hands. That would be absurd. But the balance of control currently leans too far toward the individual practice in a clinical practice setting, and healthcare organizations must look for ways to reduce complexity, focus on the patient, improve medical outcomes, and be cost-competitive in today’s market.

A much more efficient approach is to involve physicians and staff members in a discussion aimed at reaching consensus about the areas where autonomy helps them best serve the welfare of the patients. Then everything else—meaning processes and tasks that do not directly affect patient care—should be examined with a more holistic process mindset. Then improvements must be made accordingly, such as standardizing the scheduling processes and consent forms, as discussed earlier, and developing new standards for everything from requests for particular office supplies to improving the use of electronic medical records.

Deployment challenges in healthcare

When it comes to deployment strategies, there are more similarities than differences when comparing healthcare organizations to other businesses. The overall approach to deployment in healthcare will have the same components seen in any other organization, such as:
• Conducting an assessment up front to evaluate status and opportunities
• Mapping core value streams and identifying the performance measures that need to be improved
• Launch: training the resources and starting projects
• Maturity and sustainability: project monitoring, expansion, and integration into the organization

Yet as with the application of lean Six Sigma methodologies, there are differences in the deployment details for healthcare organizations that have proved to be challenging if they are not addressed directly.

Challenge: accounting for stakeholder complexity
Although the fundamentals of process improvement are the same no matter what the setting, projects in healthcare differ in the relationships between the steps and the players (see figure 3). In healthcare processes, it’s not always clear who the suppliers and customers are. For example, a hospital is a supplier to the patient but a customer of the physician. Similarly, an employee can be both a supplier and a customer in some processes. Plus, many processes will cross paths with many different stakeholders.

Figure 3: Complex relationships

There are many overlapping and often conflicting relationships in healthcare that have to be considered. For example, if you focus solely on improving patient outcomes, you may have a negative effect on insurance agency outcomes. Though you may need to be more patient-focused, steps taken to improve a patient’s experience could affect the physician. You cannot overemphasize stakeholder analysis tools when working in process improvement.

Challenge: working with physicians
Physicians control and/or influence many of the processes in a healthcare setting, and rightly so. That’s why engaging physicians in the improvement effort right from the start is absolutely critical. The goal should be to involve them, educate them about lean Six Sigma and how it has been used in healthcare companies, and work with them in focusing on the holistic process and how each subprocess affects the whole.

Share the data that show why change is needed. Emphasize the potential for improving patient outcomes and the effect both on them personally and on the business (such as reducing the amount of nonvalue-added work and documentation that physicians must complete for each patient).

Making time for physician involvement is always a challenge. Start small by finding one or two who will agree to serve as advisors on pilot projects that will free up their time for more patient care. That could include tackling issues such as reducing the number of administrative tasks and/or making those tasks simpler—or any kind of project that will make their lives easier. Once physicians see the results and feel the effect of quality improvement efforts, they often become enthusiastic supporters.

Controlling the controllable

There are many issues in the healthcare sector that are not under the control of providers, some of which are subject to change depending on political and societal forces. Providers also have much more complex stakeholder relationships than most other businesses. But in what may feel like a dark tunnel, lean Six Sigma methods offer a glimmer of light. They help providers better control the aspects of their operations that are within their span of influence.

So while a provider may not be able to reduce the number of medical codes imposed by the government, he or she can create processes that are able to deal with that complexity with minimal cost and stress to the business systems. Although that provider cannot control what kinds of reimbursements government agencies and insurers will make, her or she can create internal efficiencies that will allow better care to more patients at a lower cost.

This ability to control the controllable is why we view lean Six Sigma as a vital competitive element for healthcare organizations. Improving processes and systems lets them create a more resilient and flexible organization that can respond quickly, even in an unpredictable environment like healthcare.

This article is an excerpt from Innovating Lean Six Sigma (McGraw-Hill Education, 2016), by Kimberly Watson-Hemphill and Kristine Nissen Bradley.

About The Authors

Kimberly Watson-Hemphill

Kimberly Watson-Hemphill, founder and CEO of Firefly Consulting, is a globally known expert in the field of innovation and operational excellence. She is a co-author of Fast Innovation (McGraw-Hill, 1st edition, 2005), and co-author of Innovating Lean Six Sigma (McGraw-Hill Education, 2016). She has led global lean Six Sigma deployments in multiple industries, including one that saved more than $1 billion.

Kristine Nissen Bradley

Kristine Nissen Bradley is a principal with Firefly Consulting. She is a certified Master Black Belt in both lean Six Sigma and design for lean Six Sigma and has worked with thousands of business leaders to successfully deploy this methodology over the last 25 years. Bradley is co-author of Innovating Lean Six Sigma (McGraw-Hill Education, 2016).