Get the E-newsletter
Shortly after Don Shilton was named
president of St. Mary’s General Hospital in Kitchener, Ontario, in 2010, the
hospital’s board set a new vision for the organization: to be the safest and
most effective hospital in Canada.
Its success would be measured by a
risk-adjusted mortality ratio that is reported annually for all hospitals in
“Twice in the last five years we
actually have had the lowest mortality ratio in the country,” Shilton (pictured at right) says. The
mortality ratio measures expected deaths versus actual deaths in acute care
hospitals, with a ratio lower than 100 indicating fewer than expected deaths. In
the most recent year, St. Mary’s score was 71—third-best in the country—compared
to a national average of 91.
Along the way, St. Mary’s has cut patient
falls by more than 50 percent and hospital-acquired infections by more than 75 percent,
while also reducing staff injuries and inpatient length-of-stay. Most importantly,
the organization has created a culture in which all staff members are trained
and expected to initiate improvements. That’s why Shilton believes St. Mary’s
has come so far on its Lean-focused safety and quality journey—and is only
“Many organizations fail at a Lean implementation
because it requires a transformation of the culture within your organization,
and that’s a difficult thing to do,” Shilton says. “If you can stay at that,
then five, six, seven years later, you have an organization that is extremely
high-performing with extremely engaged staff who want to make it an even better
Healthcare leaders who wish to
achieve operational excellence must exhibit a special kind of leadership, says
John Toussaint, MD (pictured at right), CEO of Catalysis, a not-for-profit education institute in
Appleton, Wis. His work is inspired by principles developed by former Toyota
engineer Shigeo Shingo, whose ideas are applied to Lean and other
Toussaint headed the ThedaCare
health system in northeastern Wisconsin more than 15 years ago, when Lean
manufacturing principles were just beginning to be used in health care. As a teacher
and student, he has visited more than 200 healthcare organizations in 19
countries, seeing firsthand the many ways that leaders’ aspirations for high
performance get lost in implementation.
“I was at a hospital the other day
that had 245 breakthrough strategic initiatives—that's just ridiculous,” he
says. “That kind of activity creates tremendous overburden on the organization,
so it doesn't focus and it can't get any better at anything.”
The principles in the Shingo Model
require leaders to keep a tight focus on what excellence means for their organizations,
Toussaint says. That means identifying a very small number of strategic
initiatives—maybe just three or four—that set the direction for the
Similarly, leaders need to focus on
a small number of metrics that are directly related to the strategic
initiatives. “What are the things that will let us know that we're either
winning or losing on our organizational performance?” he says.
The leaders’ next job: Articulating
the vision and the metrics to the entire organization. “That’s so everyone who
works there understands, first of all, why they work there, and then whether
the organization is achieving its goals,” Toussaint says.
At Salem Health Hospitals and
Clinics in Oregon, organization-wide strategic initiatives have focused on
improving compliance with hand-hygiene protocols and reducing
healthcare-acquired infections. Meanwhile, individual work units use Lean
principles to address issues specific to their work. For example, the 20-member
finance department at Salem Health used the Lean problem-solving approach to
complete more than 80 projects in the first 10 months of the current fiscal
year. The department’s goal is for each staff member to complete at least four
such projects a year, says Reid Sund (pictured at right), manager of the department and controller
for the system.
“There are problems every day, so we
use the Lean tools to do our work in a methodical way,” Sund says. “Our culture
in finance is that that’s how we solve problems; there's really no other
method. It might not be structured—sitting down and writing it out—every time,
but we use the methodology even in the way we discuss problems.”
Lean leaders at Salem Health learned
from experience that excellence thinking must be embedded in the organization
at all levels, says Debbie Goodwin (pictured at right), RN, BS, MSN, a Kaizen (Lean) learning and
development consultant at the health system.
In its first foray into Lean management,
Salem Health used an event approach, in which a group of employees gathered to
tackle a specific problem using a protocol centered on rapid process improvement.
That required a lot of time and effort and did not generate sustainable
improvement, she says.
In 2012, Salem Health moved to an
“all-in” commitment, with a focus on training Lean leaders in all departments
and embedding Lean fundamentals into the way that frontline staff conduct their
work. “We really needed more of a cultural transformation with our Lean work,”
Goodwin says. “Everyone needs to be involved.”
In Sund’s finance department, that
means all supervisors complete Lean leader orientation, a 12-week program in
which participants learn Lean concepts—team huddles, visual management boards, and
four-step problem solving, among others—and demonstrate mastery of them.
That training is reinforced by a
coaching matrix. “I’m constantly being coached not only by my supervisor, but
we also have a Lean sensei who rounds on me,” Sund says. “She is very helpful
in providing feedback on various things we are working on.”
Meanwhile, Sund uses a “coach,
coach, tell” approach to managing his staff. That means he first coaches them
to use Lean fundamentals to solve problems and only instructs them on what to
do if the coaching is not effective.
Exhibit: Guiding Principles of Operational Excellence
St. Mary’s General also takes the
“all-in” approach to cultural transformation through Lean principles. Three
years ago, Shilton challenged the 1,300-member staff to implement one
improvement per employee during the year. The staff exceeded that goal—and the
next year’s goal of two per employee. “Then last year, we hit three
improvements per employee,” he says.
Such a performance shows that the
hospital’s employees want St. Mary’s to strive to improve, while other
statistics show they like working at a place that is focused on improvement. In
the most recent employee engagement survey, 91 percent of staff said St. Mary’s
is a good place to work at—compared to a Canada-wide healthcare average of 58
percent. Similarly, St. Mary’s staff, on average, said they look forward to
going to work 91 percent of the time, compared with 74 percent for their
colleagues around the country.
“Engagement is through the roof,”
Shilton says. “So, we have people regularly coming up with ideas and
implementing improvements to the organization.”
That engagement translates to improvements
not only in quality and safety but also in financial performance. As St. Mary’s
General has increased market share, Shilton says, the number of inpatient days
has increased by 7.3 percent in the past three years, and total salaries have
increased by 7.1 percent. But the overall cost per inpatient day has decreased
by 0.9 percent.
Likewise, emergency department (ED)
visits increased by 8.1 percent during that period, but the hospital’s cost per
ED visit fell by 4.9 percent. “A whole systemic culture change has really led
us to become a high-performing organization,” Shilton says.
That culture change has been
supported by structural changes in the way St. Mary’s General operates. For
example, the manager of every unit meets daily with the charge nurse or unit
lead to go through a standardized set of questions to prepare for predictable
“If we have a sick call this
afternoon, how are we going to handle that? Or where are we going to put the
next two admissions that come from the emergency department?” Shilton says.
Likewise, each manager meets with
his or her department director every week; each director meets with a vice
president once every two weeks; and each vice president meets with Shilton once
a month. At each of the meetings, the conversation is driven by a set of
questions that are designed to proactively address predictable problems.
As with any cultural transformation,
creating enterprise excellence through Lean fundamentals will happen only if
the organization’s top leaders embrace it for themselves. That means not only
learning Lean concepts but using them consistently, Goodwin says.
“This is challenging for people who
have previously been recognized and rewarded for a different leadership style
because this is very much a coaching style that says leaders don’t have all the
answers,” Goodwin says. “If senior leaders tell the mid-level folks in the Lean
office to do Lean but don’t do it themselves, those [implementations] don’t
work so well.”
Change requires adequate support. Training department heads and
supervisors in Lean methodology is not sufficient to achieve significant and
lasting improvement, Goodwin says. Salem Health, with a staff of about 4,800,
employs about 10 staff members who are dedicated to coaching leaders and
supporting initiatives throughout the organization or to managing the health
system’s Lean strategy. “Building an infrastructure of resources was definitely
needed to implement the Lean system here,” she says.
Focus on quality and safety. Although Lean principles, by
definition, seek to improve efficiency by eliminating waste, healthcare
organizations that focus primarily on financial performance will not succeed in
a Lean transformation, Shilton says.
“Make it all about improving quality
and safety; do not make it about saving money,” he says. “The only way you are
going to be successful with this is by engaging the frontline staff in the
journey and in wanting to make your organization better—and people don’t become
nurses or doctors or social workers because they want to save money.”
Butcher writes about healthcare business and policy topics for several HFMA
Interviewed for this article:
Goodwin, RN, MSN, kaizen (lean) learning and development consultant, Salem
Health, Salem, Ore.; Don Shilton, president, St. Mary’s General Hospital,
Kitchener, Ontario; Reid Sund, controller, Salem Health, Salem, Ore.; John Toussaint, MD, CEO, Catalysis, Appleton Wis.
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.