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Utilizing Six Sigma to Improve Health Care Processes and Profits
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Utilizing Six Sigma to Improve Health Care Processes and Profits
by Dave Wojczynski
9/23/03 - In an ever-changing and increasingly competitive environment, health care professionals can no
longer succeed by merely providing quality health care. In order to survive, they must
demonstrate exceptional business and marketing savvy as well.
Health care providers are confronted daily with business issues and questions such as:
* How can we grow our business and expand services in order to generate greater
profits?
* How can we most efficiently manage payor contracts?
* How can we be certain that we're coding procedures correctly and not leaving
money on the table?
* How can we most effectively understand, document, analyze and quantify our processes?
* How can we eliminate unpredictable patient volume and avoid making reactive decisions?
* How can we assess and manage emerging risks, such as those discussed in the Health Insurance Portability
and Accountability Act?
If you can answer these questions with absolute certainty and complete confidence, then you'll be able to
compete successfully in today's market. If you can't, you'll likely fail.
A proven technique
Fortunately, a proven technique exists that can not only help answer these questions with extreme confidence
but also provide the tools necessary to accurately monitor the success of critical business processes and
initiatives.
Many successful Fortune 500 companies have used Six Sigma for years to systematically increase their
revenues and operational efficiencies. Now, for the first time, the same proven principles are being applied to
health care organizations with amazing results.
Six Sigma is a proven process improvement methodology designed to achieve 99.99966percent efficiencystatistically known as six sigma-translating to 3.4 defects per million opportunities.
Six Sigma's mathematical rigor measures critical processes objectively in order to quantify variation and
determine the root causes of inefficiencies. Steps are then taken to systematically eliminate and control the
inefficiencies. More advanced applications of this science employ regression models and design custom
experiments to understand process performance and predict future outcomes.
Simply stated, Six Sigma is the easiest way for an organization or facility to understand its problems, what is
causing them, and how they're affecting overall business performance. After years of experience, many of us
have become so proficient in performing some of our most critical and fundamentally basic tasks that our
ability to self-analyze those functions is paralyzed.
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Utilizing Six Sigma to Improve Health Care Processes and Profits
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Proactive decision-making vs. knee-jerk reactions
A key ingredient of Six Sigma is teaching the ability to step back from our daily routine in order to
systematically ask ourselves why we do things the way we do. Often, the processes, people and routines
currently in place aren't performed because of some deliberate and overt act of solving a problem, but are
knee-jerk reactions to a pressing issue that forces us to make decisions quickly. Continual knee-jerk
decisions, made with the best intentions, become entrenched in our organizations and cultures--ultimately
becoming a set of less-than-optimal processes.
At its most fundamental level, Six Sigma is a problem-solving methodology that provides a set of tools and
techniques to help us become better managers. The most common misconception confuses the methodology
with other quality programs such as those of the International Organization for Standardization or the Joint
Commission on Accreditation of Healthcare Organizations. Although it shares many common statistical
attributes with traditional quality programs, Six Sigma is a new breed of dynamic analysis that helps
organizations continually improve performance. It combines the best of project management and data
analysis and provides a catalyst to create sustained organizational and cultural change. This change is
accomplished by teaching, coaching and investing in the most valuable assets within our organizations: our
employees. Incorporating Six Sigma at your facility provides a unique mechanism for skill development and
job growth.
The initiative is successful because it maximizes knowledge and experience, complementing it with a robust
and structured problem-solving methodology that not only permits you to step back but forces you to step
back in order to arrive at accurate conclusions based on data and facts. It eliminates the necessity of relying
on instinct, subjective feedback and opinions to justify decisions. The tools provide structure and balance
parallel to daily time demands and issues that require problem-solving skills. The most successful Six Sigma
organizations are able to self-assess and admit that they have ample room for improvement. They also realize
that many of their issues have been pushed aside for some time and are willing to invest the time, money and
resources needed to initiate a more efficient and effective work environment.
Case study examples of Six Sigma at work
* Reduce payment cycle time by 20 percent, and reduce aging receivables balance by $300,000.
* Streamline presurgery testing process, reducing patient wait time by 50 percent, and reduce the number of
cancelled procedures, resulting in more than $500,000 of financial benefit.
* Improve patient care by increasing patient assessment quality and nursing interview time without adversely
affecting overall process cycle time.
* Optimize surgical scheduling process, eliminating redundancies and wasted resources and equipment.
* Optimize a patient scheduling process by focusing on process quality and quantity.
* Identify more than $250,000 of financial opportunity associated with unbilled and rejected claims by
isolating the true causes and linking them with steps to address the problem.
* Identify marketing opportunities by analyzing and segmenting the referring physician population in terms
of gross charges and number of rejected claims.
Make no mistake, Six Sigma is not the end-all, be-all answer to facility improvement. It's a long-term
cultural commitment to change the approach of running a business. It requires the patience to develop a
long-term proactive business focus rather than a reactive knee-jerk response. It's not a quick fix. The
methodology is woven throughout the internal cultures of industry leaders like Motorola, GE and McKesson.
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It identifies organizations that are willing to do whatever it takes to provide the best products and services to
their customers and staff. Six Sigma is only for facilities that believe in their vision for the future and will
ultimately separate themselves from competitors.
About the author
Dave Wojczynski is vice president of Six Sigma and client services for Source Medical
(www.sourcemed.net), a leading provider of outpatient information solutions with products installed in
more than 3,500 facilities nationwide. Prior to joining Source Medical, Wojczynski developed and
implemented Six Sigma programs for GE and NBC. Wojczynski has an MBA from Northwestern University
and is a certified Master Black Belt in Six Sigma methodology. Letters to the editor about this article can be
sent to [email protected].
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10/23/2003