Systemwide Process Improvement

Karen Minich-Pourshadi, for HealthLeaders Media , April 14, 2011
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Although leaders believed the process improvement initiative was successful, they wanted to take the philosophy even further, so they created Total Hospital Efficiency (THE), which installs advanced process methodologies throughout the whole hospital simultaneously, instead of using a targeted approach. Then logistics software is installed to track all patient clinical and nonclinical data. The increases in efficiency, lowered costs, increased revenues, enhanced capacity, and quality are dramatic.

Mercy St. Vincent’s process improvement effort reaps annual financial rewards now that it has linked disparate operating systems: The hospital has reduced average length of stay by 23%, lowered direct costs by $8.6 million, increased operating margin to 5.3% from 2.7%, and has seen improvement in other quality metrics, such as preventable harm and hospital-acquired conditions.

Imran Andrabi, MD, president and CEO at Mercy St. Vincent Medical Center, and Joseph Sober, vice president for service excellence and workflow process, have seen how Lean, Six Sigma, and THE all can work together.

“Lean has helped us generate savings from projects and reduce the length of stay by 1.3 days; it has helped us bear these tough economic conditions. But if someone is going to put one of these into place just for the purpose of cost savings, they would be disappointed because this is also about the patient experience and satisfaction. This goes well beyond enhancing margin,” says Sober.

That’s why Mercy St. Vincent decided to broaden its application of the Lean and Six Sigma tenets to develop a systemwide approach. “THE has allowed us to indentify interdepartment instead of intradepartment issues and bring in leadership and [Six Sigma] black belts to address the issues,” says Andrabi. Leadership looked at its Level 1 trauma center, its Level 3 NICU, and its eight ICUs as a good starting point to improve the patient experience and process. A team was tasked to look at the entire patient flow process, and reduced LOS, thereby creating an additional capacity of 100 beds.

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1 comments on "Systemwide Process Improvement"

james mcniff (4/15/2011 at 8:56 AM)
This same opportunity exists in non-clinical applications like the revenue cycle..Per AHA, hospital expenditures for 2009 was 724 billion dollars..If we assume a 5% margin the net revenue would be about 760 billion..The average hospital's cost to collect is about 4%..This equates to 30 billion spent on the revenue cycle..Through the application of the HIPAA business transactions,intelligent software and process redesign there is the potential of reducing these costs from 30 to 50%..A savings of 10 to 15 billion dollars a year for the industry..




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