Aggressive Cost of Quality Recovery Case Studies

100-Day Workout Productivity Series- a more sophisticated enhancement to Workout & other rapid improvement approaches, the 100-Day Workout Productivity Series is a facilitated, quality-based, aggressive cost reduction approach designed to achieve aggressive cost recovery while improving or maintaining process quality in each 100-day project. Successful application candidates include Productivity Optimization / "In Quality"-"Out of Quality" Staffing to Demand, ED Throughput, Surgery Throughput, Patient Care Throughput, & other processes in which capacity suboptimization and excess waits drive up cost of quality.

The 100-Day Workout Productivity Series, shown below, aims at aggressive cost recovery from variation in the staffing-to-demand and "In Quality/ Out of Quality" staffing processes. These proven 100-Day Workouts produce rapid cycle gains, while maintaining or improving quality and service, at the same time, building new skillsets within the management team.

Key aspects of the 100-Day Workout Productivity Series method include:

• Manageable focus.
• Cost of Quality recovery.
• Accountable infrastructure.
• Stretch goals from comparative benchmarks.
• Disciplined execution intensity.
• Apprenticing your staff.

Case Study 1: A Mid-Atlantic Health System Facing Financial Issues

A multi-hospital system located in the mid-Atlantic region required $80 million in additional capital to qualify for financing for its new consolidated facility. The executive team realized its staff required new and innovative methods if they were to achieve their goals. The senior leaders acknowledged effective implementation must be system wide and required an “all hands on deck” approach to succeed.

Health System implements 100-Day Workout Productivity Series
Caldwell & Associated implemented an on-site mentoring and apprenticing program for selected members of its staff. Leaders and managers received training in the 100-Day Workout Methodology and support from Lean-Six Sigma Blackbelts for the purpose of optimizing patient flow and capacity. Each cycle of the 100-Day Workout method focused on a different priority:

Cycle 1- Waste Walk: Prior to launching the program, Caldwell & Associates assisted WMHS in establishing aggressive benchmarks and setting nonnegotiable goals. This was accomplished through the use of Caldwell & Associates proprietary benchmarks featuring data from LA County, one of the most cost competitive markets in the country. The benchmarks were presented to hospital management during a Goal Setting Workshop where managers were presented the concepts of the 50% Gap Closure technique of goal setting. Managers also were provided the tools and support to achieve their nonnegotiable goals. Each department head and manager received training in the 7 categories of waste followed by mentoring in the creation of department level 100-Day Action Plans. To help insure success, Caldwell & Associates developed a customized system for reporting managers progress on the 100-Day Action Plan for senior management.

Cycle 2 - Focus: Rapid Cycle Productivity Variance Hardwiring: During the second cycle, Caldwell & Associates assisted the leadership and management team in defining the frequency of productivity variance response for each department (e.g. daily, biweekly, monthly, or quarterly), and then established contingency plans (similar to JCAHO’s Failure Modes Effects Analysis [FMEA] process). These actions improved reaction times to variations by predetermining an immediate response to deviations to plan without requiring direct executive intervention.

Cycle 3 - "In Quality" Staffing/ Staffing To Demand: During this third cycle of the 100-Day Workout, Caldwell & Associates assisted executives and managers in defining “Quality Staffing” based upon hour-by-hour variances in workload demand and staffing plan assumptions. In addition, Caldwell & Associates developed the reporting systems necessary for managers to proactively manage and adjust to deviations in demand. Due to the success of Cycle 1 and 2, the health system was able to self-implement cycle 3 of the 100-Day Workout.

Demonstrated Results of WMHS Implementation
As a direct result of the services provided by Caldwell & Associates, WMHS achieved:

Measurable benefits
• A $2.5 million improvement in financial operating performance in first cycle of the 100-Day Workout.
• A 30 hr reduction in hours worked per day.
• An ROI on Caldwell & Associates Services 7:1 ( only includes savings from first cycle).

Intangible benefits
• The health system has tackled costs in “Fixed Overhead Departments” as a result of the 100-Day Workouts.
• Organization -wide determination to close operating gaps.
• Rapid deployment of proven methods and techniques for improving productivity and performance.
• Certified two Black Belts, appropriately trained to certify future Black Belts without outside assistance.

Case Study 2: River Region Faced Unfavorable Managed Care Contract

River Region Medical Center, a multi-hospital system located in Vicksburg, Mississippi faced significant cost issues resulting from aggressive renegotiation from their largest payor. In addition, the Emergency Department found patients were frequently “leaving without treatment” (LWOTs) and ED patient satisfaction fell below the 5th percentile. River Region’s senior management acknowledged they needed to achieve immed

iate gains in their cost structure. In addition, there was a strong desire to optimize ED patient flow to reduce LWOTs and improve ED patient satisfaction.

River Region’s Needs • Improve the Medical Center’s cost position • Reduce the number of ED LWOT’s below 3.2% • Improve patient satisfaction scores

 

 

 

River Region engaged Chip Caldwell & Associates to critically examine operations waste, productivity, and work flow of its emergency department.

Caldwell & Associates applied its skills in Lean-Six Sigma methodology to assist senior management in isolating the changes with the potential to yield the most significant improvements in patient care and productivity. Caldwell & Associates expert staff employed the 100-Day Operations Waste Workout, techniques for enhancing accountability, and the DMAIC method (Define-Measure-Analyze-Improve-Control) to systematically produce the desired results.

Non-Negotiable Goal-Setting Workshop: To assure the year-long process remained focused, Caldwell & Associates led managers in a 3-hour Non-Negotiable Goal-Setting Workshop thirty days prior to 100-Day Operations Waste Workout. Each manager’s goals were set at benchmark levels resulting in a 39 FTE reduction target on a 1002 FTE base, plus a 3 percent non-salary cost target.
100-Day Operations Waste Workout: Caldwell & Associated provided managers with the tools and support required to achieve their goals. Support included the services of a master blackbelt in Lean-Six Sigma methodologies to identify opportunities for improving workflow. Training also included workshops in the 7 categories of waste and the Waste Walk Methodology. As part of the 100-Day Workout, Caldwell & Associates assisted managers in creating 100-Day Action plans and deploying a system for monitoring progress.
Lean -Six Sigma Deployed in ED / DMAIC:: Caldwell & Associates then used its extensive healthcare experience to complete a through analysis of River Region Medical Center’s workflow. This information was transformed into specific strategies for improving the performance of the Emergency Depatment. The team had targeted 3 key areas of focus and designed specific strategies to realize the opportunity contained in each area.

Demonstrated Results of River Region Implementation
Through two cycles of 100-Day Operations Waste Workouts and ED DMAIC project facilitated by Caldwell & Associates, River Region Medical Center gained:

Measurable Benefits
· 35% reduction in LOS, thereby achieving the worldclass benchmark of 1.9 ED LOS
· Patient satisfaction scores increased from 2 percentile to the 77th percentile
· River Region realized a $1 million improvement in cost position
· ROI on investment in Caldwell & Associates services were 5:1

Intangible Benefits
As a result of deploying Caldwell & Associates’ expertise, River Region achieved:
· Staff acceptance of nonnegotiable goals.
· Rapid deployment of proven methods and techniques for improving productivity and performance.
· Apprenticed in Lean-Six Sigma Design Techniques and 100-Day Workout method to ensured sustainability.

Alabama Medical Center Realizes $5.8 Million Gain in Operating Performance

An Alabama facility was facing a dangerously low operating margin of 0.5% and in search of innovative ideas to improve performance and increase capacity of their facility. Chronic challenges in the operating room and the emergency department were foremost on the mind of senior leadership. The medical center was planning an expansion, but it was necessary to realize immediate gains in productivity from their existing facility.

Medical Center Needs • Achieve a 5.0% gain in operating margin • Rapidly increase capacity of OR and ED • Increase patient throughput of existing facility • Improve patient satisfaction scores • Increase revenue and decrease operating costs

 

 

 

 

Medical Center deploys Caldwell & Associates’ 100-Day Workout Productivity Series

The medical center engaged Caldwell & Associates to implement its full Productivity Series featuring the 100-Day Workout method. As part of this program, Caldwell & Associates began to mentor and apprentice its staff providing them the tools for success and ensuring the sustainability of performance. The 100-Day Workout method consisted of the following:

Nonnegotiable Goal Setting Workshop: Prior to launching the program, Caldwell & Associates assisted St. Vincent’s in developing aggressive benchmarks using its proprietary LA Confidential data base featuring performance data from one of the most cost competitive U.S. healthcare markets. These aggressive benchmarks were presented in a Goal Setting Workshop where managers received instruction in the 50% Gap Closure Method and nonnegotiable goal setting.

100- Day Waste Workout: To achieve their nonnegotiable goals, the medical center managers received training in the 7 categories of waste and mentoring in the Waste Walk method. They were provided with techniques for identifying departmental waste and developing strategies to recover costs. Additionally, Caldwell & Associates apprenticed managers through the creation of personalized 100-Day Action Plans. To facilitate flawless execution, Caldwell & Associates developed a customized system for reporting progress on the 100 -Day Action Plans, thus keeping the medical center's executive team well-informed of progress.

3 Cycles Implemented: Each cycle of the 100-Day Productivity Series brought a different focus. Cycle 1 focused on waste recovery and familarizing managers with the method. Cycle 2 focused on hardwiring responses to unacceptable variances in productivity. Cycle 3 assisted the medical center in establishing definitions of quality staffing and creating methods for matching staffing to demand. The results were analyzed for effectiveness and an estimated ROI was computed and verified by the medical center’s Finance Department.

Demonstrated Results of the Medical Center's Implementation
As a direct result of the services provided by Caldwell & Associates, the medical center was able to achieve:

Measurable benefits
• A $ 4 Million reduction in operating expenses by senior managers.
• A $1.8 million reduction in operating expenses through 100-Day Waste Workout implementation.
• A 10% increase in OR capacity.
• A 7% increase in ED capacity.
• An ROI on Caldwell & Associates Services 19:1.

Intangible benefits
• Staff acceptance of nonnegotiable goals and determination to close operating gaps.
• Rapid deployment of proven methods and techniques for improving productivity and performance.
• Sustainable processes through on-site mentoring and apprenticing.

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