By Eric Hummel, Steve Villaescusa
As the healthcare industry grapples with financial pressures, limited resources, changing regulations, personnel shortages, the public’s increased attention to quality of care, and other challenges, many organizations have found hope from an unexpected source—Six Sigma. This article offers an overview of Six Sigma, also referred to as Process Excellence, and what it is, how it works, how it is implemented, and how it is being used in healthcare.
Six Sigma is an extremely effective strategy that businesses outside of healthcare have been using for several years to improve customer satisfaction, achieve extremely high levels of process performance, and to rapidly identify cost savings. More recently, healthcare organizations, providers, and accreditation groups have expanded their quality initiatives to include implementing Six Sigma strategies with solid success.
The traditional healthcare approach to quality and performance improvement has been similar to an emergency room treatment tactic; get in and fix it at point of delivery. This approach has its limits in today’s complex, highly regulated, resource challenged, and interdependent healthcare environment. Additionally, the reasons to improve have expanded. High quality care no longer translates into increased revenue as competitive pressures, including managed care, keep service prices low. To increase revenues, providers now have to significantly increase the activity volume without increasing resources. They have to reduce the potential for errors and at the same time, use more efficient and timely processes.
How Does Six Sigma Work?
Six Sigma can greatly improve a healthcare organization’s financial and operational performance because it identifies and aligns improvement initiatives with strategic objectives and business goals and looks at key processes across the entire system. In fact, the direct involvement of executives, the focused alignment with organizational strategic objectives, and an increased array of statistical tools are the cornerstones of a Process Excellence method. Six Sigma examines quality, as defined by the customer, in order to focus on the requirements and expectations that are truly critical and measurable. Disciplined methodologies and aggressive variation reduction can speed improvement efforts and sustain gains. The average Six Sigma Black Belt project is completed within three to six months (versus an industry improvement project norm of 12 –24 months) and provides an average bottom line financial benefit of between $150,000 – $500,000.
A large midwestern hospital implemented Six Sigma to tackle the problem of having a significant number of inaccurate case carts delivered to their delivery rooms. The problem caused surgery delays and significant time lost in retrieving correct instruments and supplies. Surgeons and staff were very dissatisfied. A Six Sigma project team defined the problem, collected data and measurements, analyzed the current process, investigated key factors, and implemented an improved process with recommendations on how to sustain the improvement. The estimated first year savings in staff and inventory costs was approximately $200,000.
Implementing Six Sigma
Implementation of Six Sigma begins at the leadership level and should be based upon the organization’s strategic objectives and business goals. After establishing a baseline of how well the organization is performing against its goals, gaps and opportunities can be identified. Typically, potential Six Sigma projects are identified, prioritized, selected, and chartered by the executive team or a portion of the leadership group. Projects, both improvement and design, should be leveraged to ensure they provide significant strategic and financial benefit. The executive team stays active by shaping the portfolio of projects and taking part in scheduled project “tollgate” reviews.
Both Six Sigma improvement and design projects are conducted following a structured and disciplined methodology. Improvement projects typically use the DMAIC (Define, Measure, Analyze Improve, Control) methodology. Design projects typically use a DMADV (Define, Measure, Analyze, Design, Verify) methodology.
DMAIC or DMADV steps have defined goals, outputs, critical checkpoints, and relevant tools. Tollgate reviews are project reviews that the project sponsors or the leadership team conduct on a regular schedule. These reviews should occur at the end of each step in both the improvement and design methodologies. They allow the sponsor and leadership team to monitor the project, allocate resources, and ensure that the team has completed each step with sufficient rigor.
A vice president of finance at a large hospital with responsibility for several financial strategic initiatives looked to Six Sigma for help in improving the hospital’s revenue accounting. The executive team had identified the decrease of late claim generation as a key project after reviewing the core processes and measures (“Big Y’s”). After determining the potential for success of the project, a team was formed. They quickly defined late claims associated with lab results for an initial point of investigation. The team included members from a private lab the hospital used for most of their emergent lab testing. The team estimated the loss of revenue and cost of rework was over $250,000. Improvement was focused on the claims related to certain lab tests that were identified as causing a significant portion of the late claims. Solutions were tried with good success and are currently being implemented and used to identify where these solutions and improvements could further benefit the claims generation process.
Training and Roles
The organization needs to select and train the right people to lead projects. Future leaders are often selected to participate, and their training is viewed as a key part of their developmental process. It is important to establish selection criteria, develop a training plan, and dedicate the time and resources required to make the program successful. No one training plan fits all organizations.
Six Sigma Training is conducted at all levels of the organization. The champions, process owners, and project sponsors usually come from the leadership team. They identify the strategic direction, process focus areas, and select and manage improvement projects. Master Black Belts act as coaches to Black Belts and the leadership team. Black Belts act as project leaders and as key internal change agents. Green Belts are team members.
Recently, a hospital organization identified the length of their project improvement teams running from two months to over two years. It was determined that there was too much variation in the length of the project teams, as well as the quality of results they were receiving. A team was put into place after training the executives and the directors of quality about more sophisticated project chartering and the value of executive involvement in project tollgate reviews. The team is responsible for improving the project improvement team process and implementing the improvements across the organization.
Managing Six Sigma and Sustaining the Gains
One fundamental key to Six Sigma organizational success is the extent to which leaders take an active role in participating and influencing the application and acceptance of Six Sigma’s discipline and philosophy into their culture. Leaders need to establish accountability and link Six Sigma activities to strategic goals. Supportive behaviors include focusing on process management, using process measures as a key part of the figures and data, regular review of these measures, identifying and removing barriers, conducting frequent progress reviews, and communicating progress. Leaders also support the initiative by developing an execution mentality toward accomplishing stated expectations, and continually reviewing the linkages between the organization’s reward and recognition system while sustaining the improvements process functioning.
Typical Projects and Benefits
Six Sigma projects in healthcare are focusing on direct care delivery, administrative support, and financial administration. Examples of beneficial Six Sigma projects in healthcare include:
- Patient satisfaction
- Speed and accuracy of admissions
- Bed availability
- Care coordination
- Accuracy of lab results
- Rapid emergency room treatment
- End of life care
- Surgery scheduling
- Inventory control
- Supply chain
- Billing accuracy
- Insurance denials
- Documentation
- Human resources
A hospital reviewed patient satisfaction information and found they were below their benchmark in the speed of admitting patients to rooms. A review of the data indicated one source delaying notification to environmental or support services when patients were discharged and rooms were available for preparation for new admissions. In addition, the hospital had been diverting some admissions through the emergency room because inpatient rooms simply were not available.
A Six Sigma project team was formed. After defining the problem and scope of the project, the team discovered that the room preparation process had thirteen steps and seven handoffs. They implemented a new process with only six steps and four handoffs, which saved significant time and staff rework. Fewer patients were diverted to other hospitals and patient satisfaction regarding admission to the hospital significantly improved.
As in the example above, common outcomes of Six Sigma implementation include higher quality care, more effective administrative and support processes, significantly reduced defects, higher quality of service, improved timeliness, greater customer satisfaction, improved staff morale, reduced costs, better utilization of resources, increased market share, and improved organizational performance.
If you are looking for ways to stretch limited organizational resources to meet increasing demands, you may want to consider Six Sigma. To find out more about how to implement and use Six Sigma in your organization, contact Stephen Villaescusa.
Posted by oriel 
Posted by oriel 
