Get the E-newsletter
If you want to talk Lean, you can't do better than to talk to Patricia Gabow, MD. Under her leadership from 1992 to 2012, Denver Health was one of the earliest and most successful healthcare adopters of Lean, the Toyota Production System of improvement. The organization's track record earned Gabow election to the Association for Manufacturing Excellence Hall of Fame—undoubtedly the only nephrologist so honored.
She has won a slew of other major awards, as well—among them, the Health Quality Award from the National Committee for Quality Assurance and the Dr. Nathan Davis Award for Outstanding Public Service from the American Medical Association—for her work in leading Denver Health's evolution from a department of the city government to an independent governmental entity that is a national model.
Retired from Denver Health, Gabow is currently a trustee of the Robert Wood Johnson Foundation, a member of the National Academy of Medicine's Leadership Consortium for Value & Science-Driven Health Care and of the National Governors Association Health Advisory Board, and a MACPAC (Medicaid and CHIP Payment and Access Commission) commissioner.
I'm always embarrassed that Lean is the product of an automobile company when it should have come out of health care. The core philosophy of Lean is that transformation is built on two pillars: respect for people and continuous improvement. And while it focuses on removing waste from the perspective of the customer— in the case of health care, our patients and their families—the respect for people also means respect for the workforce. Many people who work in health care today feel unempowered, and Lean is both empowering and democratizing: It relies on the people who actually do the work to solve the problem.
In addition, many of the tools use a problem-solving approach that's not all that different than research, which makes physicians comfortable with it. One of the standard tools is called an A3, a term coined from the name of the size of the paper used by Toyota to solve a problem. When completed, it resembles a research abstract in that it's very precise and very concise. It includes boxes for the reason for action, the current state and the target state, the gap analysis, the solution approach, etc. In general, the tools of Lean are powerful but exquisitely simple and intuitive. If you map the steps walked in doing a task and it ends up looking like a plate of spaghetti (i.e., a spaghetti diagram), you don't need a college degree to understand that there has to be a better way.
Two of the most common problem-solving strategies we use are consultants and committees, and Lean is dramatically different from both.
Consultants typically come in and interview people about the issue, use external benchmarking data to compare performance levels with those of other organizations, and generate a solution, often involving staffing. External benchmarking is often useful, but it is incomplete, so whenever someone said they were in the top 1 percent or 5 percent of whatever in the region or the country, I'd say, "Great, you're now the smartest one in the dumb row" (a saying from my rural upbringing). There is so much waste in health care that measuring yourself against someone else who has a lot of waste doesn't get to the core of the issue.
In Lean, by comparison, you never decide what the problem is by interviewing people about how a process works. You go in and observe the work being done, which is the only way to really understand it.
They are generally made up of leaders rather than frontline workers, and—because there's a belief, especially in academic medicine, that every stakeholder should be at the table—you may have 20 people. And although we know when a committee starts, we often don't know when it ends. Committees take a long time and often don't come out with a clear deliverable; even when they do, it usually has to go up the chain of command, so there are many chances for a veto.
With a rapid improvement event (RIE), which is a standard Lean tool, you pull together eight to 10 people, most of them frontline workers and not all from the area in question. You put them in a room for four days and at the end of Thursday afternoon, they've not only decided what change is necessary to get rid of waste, they've implemented it. All three words are important in an RIE: It's rapid, it results in improvement, and it's a self-contained event.
Healthcare processes are so complicated that you have to use a disciplined structure that comes from the top: You're transforming your system to be something wonderful, not just randomly solving problems with "drive-by" RIEs.
First you need to identify your institution's ultimate goal—your "true north." Your true north has to be noble, it has to be important, and it has to be a stretch, because you want people to be engaged and you want them to believe it's worth their time. Also, to tell people that they can achieve something that's a stretch is a vote of confidence. A true north is not, "We want to make more money."
Next you need to identify the metrics that will tell you if you're getting there, and then you need to determine which areas of the enterprise will do the most to drive those metrics. Those are the value streams you organize around.
We had 15 value streams at Denver Health (e.g., revenue cycle, community health services, perioperative services)—each with an executive sponsor and a small steering committee, maybe four or five people, who started out by mapping the stream: At a 30,000-foot level, what does the flow of an orthopedic patient in the operating room (OR) look like, for example? Then they identified the major bottlenecks, the areas with the most waste, and picked out roughly eight of them to tackle in a year, each with the potential to generate at least $50,000 of financial benefit.
We wanted to be a model for the nation. My favorite quality metric is mortality because it kind of rolls up everything you're doing in one. For every year we were doing Lean, our observed-to-expected mortality was below 1 (which is the expected rate of death for a population of patients). In 2011, we had the
lowest observed-to-expected mortality of all the academic health centers in the University HealthSystem Consortium. And we had a very vulnerable population: 70 percent minority, 30 percent non-English speakers, 40 percent uninsured prior to the Affordable Care Act.
When we surveyed our employees about Lean in 2012, we had an 85 percent response rate, and 83 percent of respondents said they understood Lean and how it helped us maintain our mission. You can't get 83 percent of Americans to agree on the name of the country!
Our ROI on the Lean consultant—our teacher, or sensei—whom we hired to work with us was exceptional. We realized around $194 million of hard financial benefits between 2006 and 2012, divided about equally into hard savings, increased productivity, and improved revenue cycle management.
The problem is that most of them are using it in a halfhearted way. It's a leadership-intensive approach—it's not something you can hand off to your quality improvement department and not be engaged in. We trained all our people from mid-managers up, including physician and nurse leaders, to be our Black Belts in Lean; their job was to get rid of waste in what they did every day. Almost every RIE team had a leader who was a Black Belt and also included one of seven trained facilitators from the Lean Systems Improvement Department.
Each value stream steering committee met monthly to discuss the last three RIEs and plan the next three. As CEO, I met monthly with the executive staff Lean sponsors, the director of the Lean department, the facilitators, and our sensei to discuss any issues with past or upcoming RIEs. I also met monthly with the director of Lean and the associate CFO, who was responsible for assessing the financial benefit of the RIEs, and reviewed the Black Belts reports, which were provided first monthly, then quarterly.
The other big problem is that organizations try to use just a few tools without understanding and embracing the core philosophy of respect and continuous improvement in the service of eliminating waste. A lot of healthcare leaders don't believe there really is that much waste in their organizations.
Finally, so many people and organizations are making so much money off our dysfunctional system that there's sometimes little incentive to change.
First of all, you need guidance on this journey—a sensei. And when you consider Lean consulting groups, you should look for teachers who have actually led a Lean transformation—not someone who went to three courses and has done two RIEs.
Second, you need to set an aggressive pace. You see big organizations that have one or two value streams and are doing one or two RIEs every few months; as an organizational leader, you could be dead by the time you get where you're trying to go at that rate. On the flip side of that, you need patience. Healthcare systems are complex, and you have to learn the tools, you have to do enough events and have enough people involved to make progress. It took us probably seven or eight RIEs in our OR value stream before we really started to see change.
Finally, you have to measure your results, have sound metrics, give feedback, and be transparent about what you're doing.
It's not just our own experience that we learned from. There are other systems that have been very successful—Virginia Mason, Seattle Children's, Cincinnati Children's, New York Health and Hospitals. I've been around the track and seen a lot of different approaches to improvement. Lean is the only one I've seen that hits the bull's-eye on quality, cost, and employee engagement.
I think many people don't understand how empowering it is to the workforce. Toyota said, "First we build people and then we build cars," and Lean is an investment in our employees. I'm not a "touchy-feely" sort of person, but the first time I saw a clerk stand up proudly to address a big group of people, including leadership, at a report-out from an RIE, it almost brought tears to my eyes.
One thing we didn't realize before we started out was that Lean returns joy to the work, which is something a lot of people in health care don't feel anymore. I remember, after one of our very early RIEs, someone shared with me a comment they'd overheard a clerk making to some of her colleagues: "You've got to get on one of those rapid things!"
Lauren Phillips is president of Phillips Medical Writers, Ltd., Bellingham, Wash., and a frequent contributor to Leadership.
Interviewed for this article: Patricia A. Gabow, MD, senior adviser with Simpler Consulting, LP, and former CEO of Denver Health.
Kaufman Hall: Five Key Learnings from HFMA’s Financial Analytics Leadership Council
Grant Thornton: Guiding Organizations Through Cloud-Based ERP Adoption
A senior leader at Grant Thornton LLP HealthCare Advisory Services talks about key ways to lay the groundwork for a shift to cloud-based ERP solutions. Insights stem from a presentation given at the HFMA Large System Controllers Council.
HealthTrust: Solving Workforce Management Challenges
R1 RCM: Partnering with Healthcare Organizations to Reimagine the Revenue Cycle
Two senior leaders at R1 talk about the advantages of working with an innovative revenue cycle partner that offers technology-enabled revenue cycle and patient experience services.
6 Patient Revenue Cycle Metrics You Should Be Tracking (and How to Improve Your Results)
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
10 Ways to Reduce Patient Statement Volume (and Reduce Costs)
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
Reduce Patient Balances Sent to Collection Agencies: Approaching New Problems with New Approaches
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
The Future of Online Patient Billing Portals
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
Payment Portals Can Improve Self-Pay Collections and Support Meaningful Use
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
Large Health System Drives 10% UP (Patient Payments) and 10% DOWN (Billing-related Costs)
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
ICD-10: Managing Performance
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
Clarity Drives Collections
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Orlando Health Gains Insight into Denials, Reduces A/R Days with RelayAnalytics Acuity
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
Revenue Cycle Payment Clarity
To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Streamlining the Patient Billing Process
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Wallace Thomson Hospital Automates to Maximize Limited Resources
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
7 Steps for Building and Funding Sustainability Projects
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Key Capital Considerations for Mergers and Acquisitions
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
Key Capital Considerations for Mergers and Acquisitions
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Trend Watch: Providers adapt as value-based care moves from hype to reality
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center case study
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
Reforming with a New 50-Bed Acute Care Facility
Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.
5-Minute Briefing on Revenue Integrity Through HIM WhitePaper Hospitals FS
As the critical link between patient care and reimbursement, health information enables more complete and accurate revenue capture. This 5-Minute White Paper Briefing shares how to achieve cost-effective revenue integrity by your optimizing HIM systems.
5-Minute Briefing on Accelerating Cash Flow Through HIM WhitePaper Hospitals FS
Speedier cash flow starts with better CDI and coding. This 5-Minute White Paper Briefing explains how providers can improve vital measures of technical and business performance to accelerate cash flow.
5-Minute Briefing on Reducing the Cost of RCM WhitePaper Hospitals FS
Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.
Providers Focus Too Much On Revenue Cycle Management
The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.
Lucille Packard Children’s Hospital Stanford Case Study
How Lucile Packard Children’s Hospital Stanford increased payments received within 45 days by 20% and reduced paper submission claims by 70% by using ZirMed solutions.
Using Predictive Modeling To Detect Meaningful Correlations Across Claims Denials Data
The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
ZOLL and Emergency Mobile Health Care Case Study
Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.
Maximizing Medicare Reimbursements White Paper
Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.
Denials Deconstructed: Getting Your Claims Paid
Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
Automation and Operational Improvement Drive Sustainable Results
Physician practices must improve organizational efficiency to compete in this era of reduced reimbursement and escalating administrative costs.
Revenue Cycle Management Resolves Migration Implementation Issues
Many healthcare organizations are pursuing next-generation health information systems solutions. Learn more about Navigant's work with University of Michigan Health System.
Partnering For Success – Provider Achieves Strength in Stability
The proper implementation of healthcare information technology systems is crucial to an organization’s financial health.
Building a Clinically-Integrated Network
As value-based payment models evolve, providers are challenged to maintain superior clinical outcomes while controlling costs.
Winning in the Post-Acute Marketplace
Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.
Building A Common Vision with Employed Physicians
HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.
Practice Performance Improvement
The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.
Clinical Integration Without Spending a Fortune
Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.
Adding Value to Physician Compensation
Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?
Effective Revenue Cycle Management in Your Network
Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.
Succeeding in Value-Based Care
This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.
Therapy: Benefits at All Levels of Care
Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.
Does Your Budgeting Process Lack Accountability?
With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.
Cost Accounting: the Key to Cost Management and Profitability
Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.