Six Sigma in Healthcare:

A prescription for change?

Carolyn Pexton
October 24, 2007
CAHPMM Annual Conference
Objectives

2
Articulate the case for organizational
transformation in healthcare
Acquire high-level understanding of Six Sigma
and related change management methods
Learn from case study examples
Know the keys to a successful deployment
The Need for Change in
Healthcare
A Perfect Storm
Patient safety and quality
concerns
Demographic changes
Rapidly changing technologies
and treatment
Digital transition
Workforce issues
Financial constraints
Rising consumerism
Un and Under-insured
Leadership challenges
To a large extent, health care systems were not designed
with any scientific approaches in mind. Too often there are
long waits, high levels of waste, frustration for patients
and clinicians alike, and unsafe care. A bold effort to
design health care scheduling systems, process flows,
safety procedures, and even physical space will pay off in
better, less expensive, safer experiences for patients and
staff alike. Don Berwick, IHI

Time cover story - May 1, 2006
Q: What Scares
Doctors?

A: Being the Patient

The high cost of poor quality:
New payment rules from CMS
Along with human suffering, treating medical errors
such as hospital-acquired infections come with a
high financial cost.
Roughly 1 in 10 Americans will acquire an infection
as a result of their hospital stay, and this stay will
be lengthened in order to provide appropriate
treatment.
Hospitals will no longer be reimbursed by CMS for
certain errors and the additional resources they
require.
Change is imperative!
Centers for Medicare and Medicaid Services (CMS), HHS CMS-1533-FC, Medicare
Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal
Year 2008 Rates.
Hospitals must also redesign
processes and address the
human side of change.
Simply overlaying 21
st
century
technologies on top of 20
th

century workflow will not yield
the necessary cost, quality and
efficiency benefits.
Technology alone isnt the answer
Overcoming the barriers

1. Culture
Overcome resistance
Shape common goals
2. Alignment and accountability
Ensure clear linkage between
improvement initiatives, performance and
strategic goals
Develop consistent management
structure
3. Control
Put mechanisms in place to monitor and
maintain results long-term
Getting there from here
Transformation in healthcare
wont happen without
transparency.


Transparency cant happen without
culture change.
Culture change wont happen without a
bold vision, a common toolset and
unwavering commitment.
Six Sigma Background
and Basics
Where did Six Sigma Come From?
During the first five years, even suppliers were
required to participate in the process
Six Sigma was adopted by Allied Signal and GE
and further developed into a true management
system
Success led to global deployment across a
variety of companies and industries including
healthcare!
Initially developed at Motorola in
the 1980s to improve processes,
meet customer expectations and
maintain market leadership
What does Six Sigma mean?
The term Sigma is a measurement of how
far a given process deviates from perfection
a measure of the number of defects. Six
Sigma correlates to just 3.4 defects per
million opportunities.

A quality improvement methodology that
applies statistics to measure and reduce
variation in processes.

A management system that is
comprehensive and flexible for achieving,
sustaining, and maximizing success.
2
3
4
5
6
308,537
66,807
6,210
233
3.4
Z
B
DPMO
Key Concepts
Critical to Quality (CTQ): Attributes most important to
the customer
Defect: Failing to deliver what the customer wants
Process Capability: What your process can deliver
Stable Operations: Ensuring consistent, predictable
processes to improve what the customer perceives
How does the customer view my
process?
What does the customer look at to
measure performance?
Time to
Park Car
Registration
Walk to
Procedure
Area
Procedure
Time
Time to
drive to
facility
Hospitals View
of Registration
Patients View
of Registration
An Enabler for Cultural Change
Lobby
Time
Target Customer
Specification
3s
3s
6.6% Defects
BEFORE
w i d e v a r i a n c e
Six Sigma illustrated
No Defects
6s
AFTER
slim variance
Target
Customer
Specification
6s
Patients dont feel the averages, they feel the variability
Goal
Six Sigma refers to a
process that produces
only 3.4 Defects Per
Million Opportunities
2 308,537
3 66,807
4 6,210
5 233
6 3.4
Sigma
Level
Statistically...
DPMO
~93.3%
Good
99.99966%
Good
How good are we today?
20,000 lost articles of mail per hour
The Classical View of Quality
99% Good (Z = 3.8s)
Seven lost articles of mail per hour
The Six Sigma View of Quality
99.99966% Good (Z = 6s)
One hour without electricity
every 34 years
68 wrong drug prescriptions
each year
No electricity for almost
7 hours each month
200,000 wrong drug prescriptions
each year
One short or long landing at most
major airports every five years
2 short or long landings at most
major airports daily
5,000 incorrect surgical operations
per week
1.7 incorrect surgical operations
per week
One minute of unsafe drinking water
every seven months
Unsafe drinking water almost
15 minutes each day
How good do we need to be?
Define
CTQs
Statistical
Problem
Practical
Problem
Statistical
Solution
Practical
Solution
The DMAIC
Methodology
...measure your target metric
and know your measure is good...
look for root causes and
generate a prioritized listing of them.
... determine and confirm the
optimal solution ...
be sure the problem doesnt
come back sustain it
and relate it to the customer..,
... define the problem, clarify
Sample fishbone diagram poor x-
ray quality
1. Form cross-functional team
2. Construct cause-and-effect
diagram, listing potential
causes on each branch
3. Prioritize causes on each
branch select important
causes and ignore trivial
ones
4. Conduct detailed analysis
and develop an action plan
5. Follow up until action is
completed and results are
verified
6. If results are unsatisfactory,
use statistical tools (such as
Regression Analysis) to
further analyze the problem



Key roles and responsibilities
Team Members: Individuals who
receive specific Six Sigma training
and who support projects in their
areas
Champions/Sponsors: Trained business leaders who lead the
deployment of Six Sigma in a significant business area
Black Belts: Fully-trained Six Sigma experts who lead
improvement teams, work projects across the business
and mentor Green Belts
Green Belts: Fully-trained individuals who apply
Six Sigma skills to projects in their job areas
Master Black Belts: Fully-trained quality leaders responsible for
Six Sigma strategy, training, mentoring, deployment and results
Translating Goals into Results
The Big Ys

Clinical excellence
Patient safety
Financial results
Patient satisfaction
Physician/staff
satisfaction
Community service
ALL DRIVEN BY
PROCESSES

Wait
Times/Delays


Lab TAT
Radiology TAT
PACU/ED
Admit to Bed
World Class
Team

Reimbursement

Accuracy of
Patient Info
Medical
Necessity
Validation
POS
Collections

Productivity
Nursing
Documentation
Pain
Management

Patient Flow


Discharge
Process
ICU
Throughput
Appropriate
Placement
CTQs
Top Financial
Performance
Excellent
Service
Growth Clinical Quality

Quality
Measures


Core Measures
Performance
(CHF)

Communication
of Quality-Public
Certifications/
Accreditations
Linking Projects to Healthcare Ys
ICU Clinical
Effectiveness
Reconciliation
of Patient
Medicine
Patient
Classification
Process
On Base
Implementation
Cath Lab
Scheduling
System
Reduce FPC
No Shows
Perioperative Service Needs
Quality
Capacity
Net Revenue


Lean Preop Process
Staffing/anesthesia time
Preference Cards
Equipment
replenishment
Preop delays
Surgeon NA
Anesthesia NA
Equipment/
Supplies NA
Block Time
Allocation/Util
Case Time Alloc
Add-on Mgmt
Scheduling Guidelines
Work-Out: Work Process,
Roles, Responsibilities,
Communication
Kaizan Event: TAT

Staff roles
Setup/Cleanup
process
Communication
Level Loading Blocks/
Cases across days/time
by clinical service
Match sched to staffing
New guidelines: Add-ons
First Case Start
Time
Room
Turnover Time
Room
Utilization
Performance
Metrics
Core Business
Metrics
Critical
Factors
Project
Solutions
Patient Safety
Anesthesia Time
Right Side
Instrument Counts
Process for identifying,
reporting, taking
corrective action
Patient
Satisfaction
Physician
Staff
Satisfaction
Community
Relationship
Financial
Viability
Projects and Work-Outs
Becoming a Better Healthcare Provider
Business
Processes
Hospital
Management
Processes
Clinical
Care
Processes
Tools
Outcome
P
e
r
f
o
r
m
a
n
c
e

E
x
c
e
l
l
e
n
c
e

Its really not about projects they are a means to an end!
Patient
Safety
The Ultimate Goal
In simple terms
Listen to the customer
Define their expectations
Measure how many times we get it wrong
Fix it
Prove the fix is real and meaningful
Make it stick !!!!!
Related Methodologies and
Change Management
Techniques
Large scale
improvements
require precise
coordination and a
common
cadence
to advance
smoothly
62% of initiatives
fail due to lack of
leadership
commitment
Change Acceleration Process (CAP)

Changing Systems & Structures
Current
State
Transition
State
Improved
State
Creating a Shared Need
Shaping a Vision
Mobilizing Commitment
Making Change Last
Monitoring Progress
Leading Change
Stakeholder Analysis
UCSS 36
Change Acceleration Process
Stakeholder Analysis
Steps: 1. Brainstorm key stakeholders by name
Plot where individuals currently are with regard to desired change ( = current).
2. Plot where individuals need at the minimum level to be (X = desired) in order to
successfully accomplish desired change-identify gaps between current and desired.
3. Indicate how individuals are linked to each other, draw lines to indicate an influence link
using an arrow ( ) to indicate who influences whom.
r 3/96 4. Plan action steps for closing gaps with influence strategy.
Names Strongly
Against
Moderately
Against
Neutral Moderately
Supportive
Strongly
Supportive
x
Dr. XYZ
Dr. R
Influence
loop


Exercise: Stakeholder Analysis
Take home assignment for your current project:
1. Brainstorm key stakeholders by name
2. Plot where individuals currently are with regard to
desired change ( = current).
3. Plot where individuals need to be at the minimum
level (X = desired) in order to successfully
accomplish desired change-identify gaps between
current and desired.
4. Indicate how individuals are linked to each other,
draw lines to indicate an influence link, using an
arrow to indicate who influences whom.
5. Plan action steps for closing gaps with influence
strategy.
UCSS 36
Change Acceleration Process
Stakeholder Analysis
Steps: 1. Brainstorm key stakeholders by name
Plot where individuals currently are with regard to desired change ( = current).
2. Plot where individuals need at the minimum level to be (X = desired) in order to
successfully accomplish desired change-identify gaps between current and desired.
3. Indicate how individuals are linked to each other, draw lines to indicate an influence link
using an arrow ( ) to indicate who influences whom.
r 3/96 4. Plan action steps for closing gaps with influence strategy.
Names Strongly
Against
Moderately
Against
Neutral Moderately
Supportive
Strongly
Supportive
Define the Problem
Brainstorm
Issues/Barriers
Categorize
Issues/Barriers
Define Headers
for Categories
Prioritize
Categories
2 10 9 4 6
Brainstorm
Potential Solutions
Assess
Potential Solutions
Develop
Action Plans
Share
Action Plans
Report-Out
Action Plans
Kick-Off
Ground Rules,
Introductions,
Roles, etc
Mission
What: Who: When: Resources
Work-Out
Typical Session
What is Lean?
The relentless pursuit of the perfect process
through waste elimination

In healthcare, Lean is about shortening the time
between the patient entering and leaving a care
facility by eliminating all non-value added time,
motion, and steps.
We Spend 75-95% of Our Time Doing
Things That Increase Our Costs and
Create No Value for the Customer!
The 5 steps to Lean Thinking
The continuous movement of
products, services and information
from end to end through the process
Define value from the customers
perspective and express value in
terms of a specific product
Nothing is done by the upstream process until the
downstream customer signals the need
The complete elimination of
waste so all activities create
value for the customer
2
Map the
Value Stream
3
Establish
Flow
4
Implement
Pull
5
Work to
Perfection
1
Specify Value
Map all of the stepsvalue added
& non-value addedthat bring a
product of service to the customer
What are your customers willing to pay for?
Lean Thinking Process
Best practice, patient satisfaction
results, benchmarks, suggestions,
complaints
Inefficient processes, waits, rework,
errors, substandard performance
How do you know you have a problem?

Is data available?

What is expected performance or CTQs?

What is payback/benefits of project?

Do you have the appropriate sponsor?
Project funnel and tool selection
Six
Sigma
DMAIC

Voice of
Customer


Opportunities
Scoping
Projects
Priority
Setting
Low
Hanging
Fruit
Work-Out
Tool
Selection
Lean
CAP
Mgmt
Engineering
Study
CQI
Team
Change Acceleration Process (CAP) a
process that proactively plans for change
acceptance for successful implementation
Work-Out - a process that promotes rapid
problem solving via involvement and
accountability
Lean - an improvement methodology focused
on eliminating waste through detailed analysis
of workflow in relation to time
Six Sigma an improvement methodology
driven by the statistical analysis of data
to identify causes of unwanted variation and
defects
Synergistic Tools and Processes
Healthcare Case Study
Examples
Improving process/safety for medication administration
Reduction in Blood Stream Infections in ICU
Reducing ventilator acquired pneumonia
Emergency Department Patient Wait Time
Improved Patient Throughput in Radiology
Reduction in Lost Films
MR Exam Scheduling Improvement
Staff Recruitment and Retention
Operating Room Case Cart Accuracy
Physician (Professional Fee) Billing Accuracy
Appointment Backlog for Hospital-Based Orthopedic Clinic
Quality of Care and Satisfaction of Families in Newborn ICU
Healthcare Project Examples
Pioneers in Six Sigma for
Healthcare


Commonwealth Health Corporation web site www.chc.net
In March 1998, John C. Desmarais,
Commonwealth Health Corporation's
President and Chief Executive Officer,
introduced CHC to Six Sigma, a quality
initiative program developed by Motorola
and perfected by General Electric.
By the end of 2001, over 2000 employees had attended at
least one full day of Six Sigma awareness training,
Initial projects generated annualized savings of $276,188 in
billing, decreased annual radiology expenses by $595,296,
and reduced errors in the MR ordering process by 90%.
Within 18 months, CHC had increased efficiency, improved
the patient experience, eliminated over $800,000 in costs
and reenergized the culture.

Project Description :
PS - Moving Treat-to-Street patients through the ED
takes too long. PD - One-third of our patients wait
longer than 60 minutes to be seen by a physician.
Project Scope:
In Scope - Treat to Street pts, Staffing patterns (ED MDs
& RNs), Equipt, FTEs, Registration, Lab, X-R.
Out of Scope - ED Admits, ED Hold Hours, Bed Control,
Housekeeping, Transport to Floor, MR, US, CT, Pharm.
Potential Benefits:
Decrease LWBS
Increase patient satisfaction (Press Ganey #s)
Reduce ED LOS (Soft Dollars)

Alignment with Strategic Plan:
Customer Service
Growth
Efficiency
Project Title: ED Throughput

Customer(s):
Patients, Physicians
Case Study: Improving ED
Throughput
What is the Right Y (CTQ) to Measure? How will it be measured?
Y = Door to Doc Time. From the time a patient enters through the door until the physician
enters the exam room to assess the patient, measured in minutes.

What is our goal?
We will improve the average ED Throughput Time for Treat and Street Patients by 40%.
This will reduce the weighted average Door-to-Doc time from 65 minutes to 40 minutes.
We will improve our throughput yield of patients seeing a physician within 60 minutes
(USL) from 67% current to 80%. This reduction in our defect rate of 13% represents over
7,500 customers.

Measure
What are the specification limits? (LSL, USL) What is the Target?
Based upon our VOC data, we have set a USL of 60 minutes and a Target Mean of 40
minutes.
Value Stream Map Opportunities for Performance Improvements:
Analyze
Door-to-Doc Subcycle
Other Flow
(blood, etc.)
Patient Wait Time
Phone Call
ED
Waiting
Room
Triage
EKG, Draw
Blood, UA,
Order X-Ray,
administer Pain
med
2- RNs
1 Tech
Front
Desk / QR
Treatment


X-Ray
In ED
Lab
Team Area
Tube/blood
MD
Portable
Fax
written
report/ED
Call critical values
Arr QR QR Triage Triage Bed Bed MD
6.3 min 11.6 min 23.5 min 22.9 min
Current Average Cycle Times
Patient Flow
People Flow
(RN, MD, etc.)
E-Info Flow
Analyze
Statistical Analysis
Door-to-Doc
Environment
Measurements
Methods
Materials
Machines
People
Associate Attributes
Physicians
Nurses
Registration
Patient Attributes
Office Equipt
Pyxis
EKG
Computers (screens)
Dynamap
Supplies
Software
Chart
Triage Sheets
Ancillary Svcs
Transportation
Advanced Triage
Financial Metrics
LWBS
Satisfaction
Time
Triage Level
Staffing
Seasonality
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Door-to-Doc Causes (Xs)
Analyze
What Xs (inputs) are causing most of our variation?
Results for: Historical DOE Door to Doctor Time
Factorial Fit: D2D versus Express Care, X-Ray, Bed Open`
Estimated Effects and Coefficients for D2D (coded units)
Term Effect Coef SE Coef T P
Constant 87.34 2.547 34.30 0.000
Express Care 35.56 17.78 2.547 6.98 0.000
X-Ray 36.06 18.03 2.547 7.08 0.000
Bed Open -37.81 -18.91 2.547 -7.42 0.000
Express Care*X-Ray 33.69 16.84 2.547 6.61 0.000
Express Care*Bed Open 32.56 16.28 2.547 6.39 0.000
X-Ray*Bed Open 14.06 7.03 2.547 2.76 0.025
Express Care*X-Ray*Bed Open 5.19 2.59 2.547 1.02 0.338
S = 10.1865 R-Sq = 96.87% R-Sq(adj) = 94.12%

Analysis of Variance for D2D (coded units)
Source DF Seq SS Adj SS Adj MS F P
Main Effects 3 15979.9 15979.9 5326.6 51.33 0.000
2-Way Interactions 3 9571.7 9571.7 3190.6 30.75 0.000
3-Way Interactions 1 107.6 107.6 107.6 1.04 0.338
Residual Error 8 830.1 830.1 103.8
Pure Error 8 830.1 830.1 103.8
Total 15 26489.4
What Xs (inputs) have we chosen to improve?
1. Bed Availability
The Measure Phase data demonstrated that Door-to-Doctor time increased by two to
three times when there is no bed open for the patient.
2. Ancillary Services
The data further showed that the time it takes to perform an X-Ray or Lab testing is
statistically significant in relation to Door-to-Doctor time.
3. Express Care
Lower acuity patients (i.e. Level 3 / Express Care) wait longer to see a physician than
do higher acuity patients (i.e. Level 1).
What do we want to know?
Screen Potential Causes?
Discover Variable Relationships?
Establish Operating Tolerances?
Improve
Value Stream Map Key Points / Opportunities for Improvement:
Improve
Registration
If rooms ful
may reg pt
while
waiting.
ED
Waiting
Room
Triage
EKG, Draw
Blood, UA,
Order X-Ray,
administer Pain
med
2- RNs
1 Tech
Front
Desk / QR
Bedside Registration
Patient Flow
People Flow
(RN, MD, etc.)
E-Info Flow
Patient Wait Time
Impacts:
1 Inc. Patient Satisfaction
2 Red. time by 8.7 minutes
3 Red. variability in process
Non-value added
step removed
What is the mean and median of our process? What is the standard
deviation?
Measure Phase Control Phase +D %
Mean score 64.3 minutes 39.8 minutes 38.1%
Median 38.5 minutes 34.0 minutes 11.7%
Standard Deviation 44.7 minutes 27.7 minutes 38.0%
HI/LO 241 / 11 minutes 129 / 4 minutes 46.5% (HI; outliers)
Range 230 minutes 125 minutes 45.7%
What is our process capability (Z score, DPMO, Yield %)?
Z Short-Term Score = 1.91s 2.35s 0.44s
DPMO = 333,333 175,000 <109,523>
Yield % = 66.7% 82.5% 15.8%
Improve
What are our financial results? How were they calculated?
Our Financial Impact is $1,120,650 and reflects the improvement in LWBS visits and the
corresponding admissions as well as a conservative (5%) recognition as a result of
throughput improvement.

Control
What is the plan for monitoring/ auditing the process? What is the Control
Plan?
Metric
Target
Values Measurement Definition
Measurement
Method
Upper/Lower
Spec Limits
Control
Method Frequency
Responsibility
(Who will measure) Alert Flags
Door to Doctor Time
< 60 minutes;
Yield = 80%
Time begins when a patient
crosses the reaches Quick
Registration. This time is
completed when a physician
greets the patient at the bedside. Manual - CDR Web USL = 60 minutes
Dashboard;
Xbar-R Chart Weekly M. Kelly-Nichols
Two out of three weeks where
80% of patients are not seen
by a physician within 60
minutes.
LWBS% < 1.0%
Patient leaves the ED after at
least completing the Quick Reg
process but before physician
performs examination.
Automated -
ED Tracking
USL = 1.0% of
ED visits
Dashboard;
Xbar-R Chart Weekly M. Kelly-Nichols
Two out of three weeks where
LWBS % exceeds 1.0%.
Project Title: Linen Utilization

Project Description: To Identify
opportunities within the organization
which allows for better linen utilization
without compromising quality or patient
care.
Project Scope: The use of linen for inpatients.


Problem Statement: Currently, our linen usage
is higher than what is expected for a facility of
our size and acuity level. We need to look for
ways to better utilize our daily linen supply and
lower our overall pounds per patient day as well
as our cost per patient day.

Case Study: Linen Utilization
What is the Right Y (CTQ) to Measure? How will it be measured?
Y = Pounds Per Patient Day of Linen Used
Pounds Per Patient Day of Linen Used by Service Line


What are the data sources? How will the data be collected?
Data Sources include the Linen Distribution Program currently in place, as
well as national benchmark data.

What is our goal?
To reduce the overall linen utilization to between 14 and 16 pounds per
patient day.


Step 1
Inventory of linen
is taken in Linen
room.

Step 2
Linen order for the
next day is placed
with Tartan.

Step 3
Linen is received
the following
morning.

Step 4
Exchange carts
from previous day
are filled.

Step 5
Linen re-stock
amounts are
recorded in Textile
tracking program.
Step 6
Linen carts are
exchanged for
those already on
Nursing Units.
Step 7
Secondary
deliveries are made
to units as required
at 12 hour mark.
High Level Process Map

What is a defect, unit, opportunity?
Defects=Missed Delivery and Stock Outs, and any reading <14 or >18 lbs
per patient day
Units = Pounds per Patient Day
Opportunity =monthly data per unit

What Xs (inputs) are causing most of our variation?
Usage variations, training, old behaviors.


What are the specification limits? (LSL, USL)
LSL=14 Pounds per Patient Day Average
USL=18 Pounds per Patient Day Average

Graphical Analysis
Linen Usage by Unit
August 2003
1
0
.
7
7
9
.
0
2
9
.
6
6
1
0
.
7
7
8
.
6
3
8
.
0
4
9
.
9
2
9
.
1
1
0
.
5
3
8
.
7
4
1
7
.
0
7
1
7
.
4
1
1
0
.
3
7
1
6
.
3
2
1
3
.
2
4
1
3
.
2
4
1
5
.
3
8
1
0
.
1
3
1
3
.
2
4
1
3
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6
2
1
3
.
3
5
1
3
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3
5
1
9
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0
2
1
3
.
3
5
1
8
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8
8
1
4
.
4
5
7
9
11
13
15
17
19
21
8 S L&D 7 North 7 South 6 North
Rehab
6 South
SNF
5 North
Resp.
5 South
Onc
4 North
CVDOU
4 South
DOU
CCU CSU ICU GSH
AVG
Unit
P
o
u
n
d
s
Avg. lbs/PD National Avg.
Patient Linen, $771,000.00
Scrubs, $125,000.00
Ancillary Areas,
$138,000.00
Patient Linen Scrubs Ancillary Areas
Linen Pounds
Per patient Day
19. 76
20. 75
19. 79
20. 9
19. 42
20. 37
20. 17
19. 47
19. 89
18. 7
16. 1
17. 17
17. 01
16. 44
17. 1
17. 3 17. 3
16. 1
10
12
14
16
18
20
22
M
a
r
-
0
2
A
p
r
-
0
2
M
a
y
-
0
2
J
u
n
-
0
2
J
u
l
-
0
2
A
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g
-
0
2
S
e
p
-
0
2
O
c
t
-
0
2
N
o
v
-
0
2
D
e
c
-
0
2
J
a
n
-
0
3
F
e
b
-
0
3
M
a
r
-
0
3
A
p
r
-
0
3
M
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y
-
0
3
J
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-
0
3
J
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-
0
3
A
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g
-
0
3
S
e
p
-
0
3
Month
P
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d
s

p
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P
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D
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Achieved goal of 14 Pounds per Patient Day. Education and focus on Scrubs,
and ancillary usage will contribute to maintaining this goal.

What are our financial results? How were they calculated?

Our Per Patient Day costs for linen have decreased by 20% over 2002. From
an average of 20lbs to an average of 16lbs.

What is the WWW (Who-What-When) plan for turning the project over to the
process owner? What is the plan for monitoring/auditing the process?

The process is a permanent one and will be tracked through reports given to
the units, Executive Sponsor, and the Linen Utilization Committee.

The Linen Utilization Committee will oversee the process and progress.



Customer Need
Four hospital system enjoying 50% market
share
Materials management improvements needed
to leverage economies of scale, utilize best
practices, and prevent inefficiencies:
Pricing structure for orthopedic implants
highly variable
Inconsistent orthopedic implant utilization
Deficiencies in OR charge master
capture
Gap in OR supplies between what patient
pays vs. what hospital is charged
OR on hand inventory management
needed
Process Improvement to Reduce Cost
Case Study: Supply Chain Improvement
Barry D. Brown Health Education
Center at Virtua West Jersey Hospital
Voorhees
Solutions
Orthopedic Implant Pricing Cap Determined actual versus lowest and average
prices to establish a fair cap price.
Orthopedic Implant Demand Matching Examined 132 medical records and
compared implants used against widely accepted industry criteria for implant
selection by orthopedist
Charge Master Review Reviewed OR charge master systems and identified
opportunities for improvement and standardization
Price Point Reduction Identified price reduction opportunities
OR Inventory Reduction HISI contracted to conduct physical inventories in
four ORs and two surgical centers
Reduce Costs
Sustainable Results With Bottom Line Impact
Results
Project results along with data shifted purchases to a primary
orthopedic implant vendor, savings of $159,000 were attained.
Annual savings of $239,400 through demand matching template
at all hospital sites that do hip and knee replacement surgery.
Patient billing data review in FY2000 indicated potential loss of
greater than $200,000 annually due to missing charges, much of
which was rectified with the corrections in the current charge
masters.
Project savings attained totaled $63,845 plus shared savings with
orthopedic cap project.
Conservative inventory reduction by facility: Facility A $187k,
Facility B $92k, Facility C $47k, and Facility D $18k. Represents
an 8% reduction of the $4.1MM of baseline inventory on hand.
Improve Quality
Summary, Keys to
Success and Q&A
Better patient safety
with 91% improvement
in post-surgery
antibiotic use,
delivering annual
savings over $1 million
at hospital in Southeast
Achieving 35% higher
take home baby
rate with increase in
successful
implantation at
hospital in Northeast
The Big Why
Shorter ED wait
times allow 28 more
patients per day to
be seen, with
potential financial
impact over $13
million annually at
hospital in Southern
California
Think about it.
Are the mission, vision and values of your
health system merely bullet points on a web
site, or are they clearly understood and
activated across the organization?
Are people empowered to drive change and
accountable for results?
Culture Change
Gain leadership support and dont skimp on planning!
Identify opportunities and define the value proposition
Ensure strategic alignment with organizational objectives and
incentives
Develop a business case, identify team leaders and build a
plan for deployment
Establish measurements and evaluate performance
Manage change through ongoing communication efforts
Monitor results and sustain improvement through review and
recognition
Keys to implementing Six Sigma in
healthcare
and network with others who have
embarked on similar initiatives!
For more information contact:
Carolyn Pexton
925-275-0726
Carolyn.Pexton@med.ge.com

And visit the iSixSigma healthcare
portal
www.healthcare.isixsigma.com