People Process Technology Blog

Lean in Healthcare or ‘We’re working the wrong problem.’

Posted by: Ken Pilone, Sr. OD/Lean Consultant, TBD Consulting

With all the fuss about the ‘Obamacare’ legislation, it seems we have lost sight of the REAL problem here.  All of the attention seems to be focused on how to pay for our nation’s healthcare needs.  Rarely if ever do you hear anybody asking, "Why are health costs so high in the first place?" 

The question needs first to be asked, why providers charge so much.  While there are no easy answers, this much is clear:  The entire end-to-end process of providing health services is riddled with waste! 

There are at least two ways to look at the formula for making a profit.  The first and most common is, cost + profit = price.  You have only to look at the Post Office to see how this plays out.  Their motto might be, “Inefficient, no problem.  Just raise the price of a stamp.”  This formula doesn’t allow for any scrutiny into what drives cost in the first place.  The second formula, and the one most overlooked is, price – cost = profit.  This works well in highly competitive markets where price is more or less dictated by the customer and thus is essentially fixed. 

Think about it.  For any consumer product to have a chance at being successful in the marketplace, it shouldn’t cause sticker-shock for the customer.  For example, if I want to buy a toaster, I can expect to pay between $15 and $50 depending on features, brand, retailer, etc.  But, if I see a toaster on the shelf with a price of $200, I might react like, Jeez, I just want toast for Pete’s sake!  Does it also do my laundry? We’re not likely to be too sympathetic if the maker responds with, “Well, that’s just what it costs to make it plus a little profit.”  That’s not our problem!  If they can’t compete, well, then they have the right to go out of business!

Herein lies the rub.  When healthcare providers THINK and subsequently ACT as if they have no real competition, where is the incentive to look for and eliminate waste?  There is also a mindset working in this industry that cost doesn’t really matter to their customers (patients) because those big, greedy, money-grubbing insurance companies are going to foot the bill anyways.  Right?  We think it’s all their fault we’re in this mess.  And the finger-pointing ensues.

If we zoom out far enough, we can find some hope from this dilemma.  Ironically, there is a potential model right under our noses in the Emergency Rooms across the country.  The routines in place when an ambulance pulls up are very tight, efficient and well-rehearsed.  This is a completely customer-centered process.  All non-essential tasks and activities are suspended until the crisis is over.

Unfortunately, we haven’t examined all other healthcare related ‘value streams’ with the same eye towards fast, efficient, waste free work. It’s as if by some invisible elastic band around us, we revert instantly back to the ‘norm’.  But, what if we used the same critical lens to look at all the other processes in place in the system?  Start with identifying who are REALLY the customers and track backwards to see how value is created for them.  Along the way we will find waste of unimaginable proportions. 

Doing this will help us solve the healthcare crisis its root cause, waste and inefficiency.  This is the center point around which healthcare providers’ lean/PI staff SHOULD be revolving.

The Training Brand is Back! - Good news for HRD

Posted by: Jonena Relth, President and Leadership Evangelist, TBD Consulting

Training Magazine and Conferences are back! This is very good news for the performance improvment industry.  Jonena

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Reposted from Google Alerts

In case you haven't already heard through the grapevine, the Training brand is back! It's been acquired by Minneapolis-based Lakewood Media Group, led by a group of former Lakewood Publications executives, including Phil Jones one of the first Training editors and later VP of Conferences. Lakewood Media Group is the perfect fit as Training was the flagship brand at Lakewood Publications.

 

The acquisition of the Training brand includes its print and digital products, online and face-to-face events, and the prestigious Training Top 125 awards program. What's more, we're both back on board with Lakewood Media Group and we'll continue to work with all of you to develop the best in conference content.

 

Training 2011 Conference & Expo will be held as scheduled February 7-9 in San Diego. Stay tuned for more info, including a Call For Presenters for this event. We look forward to working with you all again!

 

Julie Groshens and Leah Nelson
Training magazine Events
julie@trainingmag.com and leah@trainingmag.com

 

How Big Is Your Cave?

Posted by:  Ken Pilone

Trust in your people, empower them and let them help you find and eliminate the waste that they see every day!  Unleash their passion and they will rally around you in ways you have yet to imagine!

As our economy continues to circle the drain, panic is beginning to set in.  The President has recently signed into law a bill to boost job growth.  But our confidence in our government is at an all time low.  What little credibility there may have been in our elected leaders has all but vanished in a sea of cynicism and a deep rooted sense of disillusionment and disappointment.  Fear has replaced optimism. 

This bill claims to be able to create 250,000 jobs but our economy has lost 8.4 MILLION jobs since the start of the recession.  The approach congress has taken is to provide meager tax incentives for companies that create jobs that last 1 year or longer.  How meager?  The company would get a 6.2% reduction in payroll Social Security taxes through December of 2010 and a whopping $1,000 credit for employees that lasted a year.  Huh?  In other words, you can save $1,000 if you hire a person for, say, $50,000!  Like I said, meager. We are now forced into a ‘back to basics’ frame-of-mind. 

So what do we do now?  We must attack this problem at its source.  Business has to collectively and deliberately create jobs.  We need to do it for the benefit of our nation.

We need to go back to what I call a ‘caveman mentality’.  When you think about it, why did early humans live in caves in the first place?  Answer: to avoid being eaten.  The cave was a place to shelter from the elements and predators.  But it was more than that.  It was also a place for people to work collectively for the common good.  It was a place where people could find peace and community not just protection. 

Companies are modern day caves.  They provide people with many of the same needs for shelter, a place where basic needs are met and a place for social interaction.  Just as some caves were better than others, some companies are better than others but the basic needs are the same.  What kind of cave do you have?  Do your people feel safe and secure?  Are they?

We know that business, particularly small business is and always will be, the primary economic engine that drives our economy and hence our lifestyle.  We can’t rely on the government to help us.  That much is clear.  Here’s what we need to do.  We have to manufacture jobs! 

But how do we pay for them?  Time for a little basic math.  Businesses have 3 choices; they can add profit to their cost of doing business to establish price (cost + profit = price); they can keep price steady to stay competitive and reduce cost to retain profit (price = profit – cost); or they can do both.  We can achieve more from reducing cost than from increasing profit or raising prices. 

This is how we create jobs.  We mobilize everybody in the company to find and close all the small holes in the enterprise where profit seeps out.  This allows us to keep more of what we make and to create jobs for others who desperately need a cave right now.  Open your cave to more people who will bring more diversity, creativity, innovation and profit!

There is meaning in this for us.  Of course we must be able to make money to stay afloat.  But beyond that, why does your company exist?  Is there any higher purpose beyond trying to please your shareholders and the B.O.D.?  I hope so.  Wouldn’t you rather hire people vs. laying them off? 

This isn’t a trick question.  The fact is that it is your PEOPLE that will determine their own fate if management will only let them.  Turn them loose on the problem; not the solution.  Don’t say to them, ‘sorry folks but we have to lay off 20% of you because of lack of profit’.  Instead bring them the problem to solve.  Say something like, ‘people, we have a great problem to be solved but it can be solved with your help’. 

Take a humility pill.  And as I said above, trust in your people, empower them and let them help you find and eliminate the waste that they see every day!  Show them through your actions that there is a higher purpose.  This will unleash their passion and they will rally around you in ways you have yet to imagine!  Think of the families you will save from the abyss!

Prepare to be amazed.

All the best, Ken

How to Stay Afloat

Posted by: Ken Pilone, TBD Consultant and Lean Expert

If you think about it, a ship will sink just as fast from a thousand small holes as it will from one big one.  In fact, it would sink faster.  Why?  Because big holes get noticed.  The captain of the ship will swiftly mobilize every member of the crew when a torpedo hits and yet be completely oblivious to all the tiny leaks occurring throughout the ship all the time.  As long as the ship can pump the water out as fast as it comes in, nobody seems to notice. 

Think of sales as the bilge pump in this analogy.  We tend to think we can overcome our wasteful practices if we could just sell more.  This puts the company under great stress.  Wouldn’t it better to keep what you make in the first place rather than have it leak out all over the place?

The trick is to teach ALL of your staff to ‘see.’  They can be trained to identify waste that you may not be aware of in the first place.  For example, do you create reports that nobody reads?  Do you even know?  Every product, service, task and goal should be challenged to determine what value it provides and, most importantly, to whom.  Who is the ‘customer’ of the report (internal or external)?  What do they do with it?  Is it 100% useful?  What if you omitted section 3?  What improvements do they want?

Here’s an easy but powerful way to attack this.  Have your managers invite their staff to a meeting.  The price of admission is a stack of sticky notes on which each person lists every task, project, etc. they are responsible for, one task per note. The manager draws a window of 4 panes on a whiteboard as below:

RR (Right work done Right)	RW (Right work done Wrong)
WR (Wrong work done Right)	WW (Wrong work done Wrong)

The group then posts their notes on one of panes, pin-the-tail-on-the-donkey style, representing what they think the value to the customer is according to the below:

RR = work customers want and is of high quality

RW = work customers want but needs improvement

WR = work customers don’t want but is of high quality

WW = work customers don’t want and is of low quality

 

Keep in mind that some tasks may overlap two or more panes meaning that it may have some parts that are RR and other parts that may be RW, WR or WW.

 

After each person has put up their notes, stand back and look at your wall.  What do you see?  NOTE:  the top panes represent value-added work.  That is to say that you have determined that there is in fact a customer for those tasks.  Those below are, by definition, non-value added -- meaning the customer either doesn’t exist or doesn’t want that service, product, report, etc.  Pay close attention to the WR box.  This is where pet projects and sacred cows tend to collect.  This is also a great place to start in lowering the waterline to expose waste.

 

For each sticky note, an action should be taken even if it is just to validate that it is indeed work that you should be doing.  One tricky part is work that is regulatory in nature or required by company policy or procedure, e.g., creating budgets or conducting performance appraisals.  The challenge here is to first determine if it is truly needed and, if so, to be as efficient as possible so as to minimize the time you spend on work your customers aren’t willing to pay for.

Employees tend to love this process.  It is a way for them to safely tell you, the manager, what they are doing that may not, at least from their point of view, be necessary.  By listening carefully, you may be able to lighten their load a little while at the same time drawing closer to your customers and building morale and trust.

Try it.  You’ll like it.

Tough Times Profit from Having Fun!

Posted by: Heather Rodriguez, Director of Quality

While perusing the TBD newsletter archives, I came across this encouraging article that I found very relevant for today's business economy.  I think we could all use a little more fun in our workplace.

With the US in recession and companies downsizing or closing all together, it's little wonder that many people walk around with a sense of impending doom!  The overall impact on the workplace can be manifested as apathy, compliance, greater fear to take risks, less energy toward the job or a greater sense of being security minded. 

Now that I’ve totally bummed you out, let’s see what we can do to help bring some energy back into your workplace.

 

Remember those zany folks from Seattle's Pike Place Fish Market? Obviously, your place of business probably doesn't involve slinging hundreds of pound of fish everyday, but I think there are some very valuable ideas to extract from these philosophies -- especially in these times.  I’m going to borrow from the four principles of the Fish! Philosophy. 

 

Philosophy One:  Play.    No, you don’t have to rollerblade through your center or throw stuff, but what you can do is:  Don’t take yourself so seriously!  As the manager, you can initiate safe and relaxing play opportunities for your employees.  Identify ways to bring a smile to each ermployee’s face.  Some simple suggestions you can do today:  give your employees tactile toys to play with or host a picnic lunch with blankets, paper plates and simulated ants.  But you say, “Some people just don’t like to play!”  Wrong!  Some people just play differently than others.  Acknowledge their preferences to not play physically and integrate some intellectual play like crossword puzzles, jigsaw puzzles, anagrams, etc. 

 

Philosophy Two:  Make Their Day.  As the manager, you can make a big impact by helping your employees through this fearsome time.  Little things still count…and in today’s world, it may be more meaningful than ever before.  Find an appropriate way to acknowledge your employees when they are fully engaged in serving their customer.  Do it daily.  A pat on the back, small note, an email acknowledging their smile, a single, fresh-cut flower…the small things are important in an overwhelming world. 

 

Philosophy Three:  Be There.  People need reassurance that those closest to them are actually there for them.  Pull up a chair and sit facing the employee.  Ask how they are doing.  Inquire about their family, especially if someone has a deployed military member.  And most important of all, listen.  Jot down a few notes, if needed, to remind yourself to check back in a few days to follow up on the family member. 

 

Philosophy Four:  Choose Your Attitude.  Yes, it’s all about you!  The attitude you choose will have a big impact on your work environment and the overall business. Choose an attitude of optimism.  The more in tune you are with your employees, the greater impact you’ll have upon their attitudes and performance…so it’s up to you to bring some life and energy back into your workplace!

Hey, maybe it isn’t so bad after all! New Poll: American Confidence in Access to Care Is Growing

Posted by: Peggy Salvatore

 

"Americans are showing more confidence in their ability to get and afford the health care they need, according to a poll released Tuesday,” The Associated Press reports on Cleveland.com.  Jul 22, 2009

 

This Associated Press story comes with many caveats, and it is based on Robert Wood Johnson monthly polls that are not considered statistically valid, but rather a sample of opinions collected unscientifically. But certainly, the top line is instructive as health reform efforts wend their way through Congress past a wary citizenry. To sum it up, Americans are looking at the current administration, the economy and the fate of companies like GM and Chrysler, and saying to themselves, “Hey, maybe our healthcare system isn’t so bad after all!”

 

• Can we afford all the care we need and want? For most folks, the answer is sometimes but not always.

• Do we always get the best care the first time? For most folks, the answer is not always.

• Do we think some services may be overpriced? Sure.

• Do we think we can do better, give more care to more people and lower costs in the bargain? Sure we do. It is in our collective character to wonder how we can do it better, cheaper and help more people. We are innovators and humanitarians. Those traits are hard-wired into our national psyche.

 

So, it’s not that Americans don’t want to tackle health reform. We are just looking a bit askance at the current players who want to improve the system and find ourselves asking if this is the gang and these are the conditions under which we want to conduct that good old American exercise of continuing to make a good thing better.

The Hot Health Reform Debacle

Posted by: Peggy Salvatore

More heat than light in the dog days of summer. So, turn on the ceiling fan, fill an ice tea glass, and sit back in the lounge chair to take a long, cool look at the health reform debacle.

Back in June, I spoke on the health system at a Toastmaster’s meeting locally here in Pennsylvania. My subject dealt briefly with the structure of the health system, and was inherently and intentionally benign. Afterwards, I was approached by members of the group who said, “You didn’t mention the uninsured,” and the ever-popular, “Why didn’t you talk about a nationalized health system, like they have in Canada?”

Quite on purpose, my passion and mission is education about the system.  Informed debate is the best vehicle for defining a problem and crafting a solution to that problem. Under the hot August sun, our collective national passions have been ignited in town hall debates around the country.  The health care debates are informed by our personal – read: emotional – experiences with the health system and propelled by our political proclivities.

Let’s slowly swirl the ice cubes around in our tall glass and consider that there are those stubborn things called facts that will ultimately, whether we include or ignore them, drive outcomes. In the quest for higher quality, lower costs and the pursuit of a truly compassionate patient experience, let’s consider that the more we know about the health system, using the best data collected under optimum conditions, will give us the right answers. You can hear the solutions just under the din of the fan blades overhead.

 

A Whitman’s Sampler of EHR Issues

Posted by: Peggy Salvatore

Remember the Whitman’s Sampler? It was that big yellow box of high-cal, low-cost chocolates in the drug store near the checkout on Mother’s Day wrapped in an ersatz pink bow imprinted on the box. When you opened the box, every candy was different. So, Mom bit in with great anticipation – was it cherry crème or peanut cluster?

Today’s health news headlines are like a Whitman’s Sampler of issues, each one containing some luscious nugget that suggests how the implementation of electronic health records might impact the healthcare system.

Let’s pick a few morsels from the news, courtesy of HealthLeaders Media on July 30, 2009. http://www.healthleadersmedia.com/enewsletter/web-version/HealthLeadersMediaDaily_30_July2009.html

“Millions of Dollars are Lost Because of Miscoded Durable Medical Equipment Supply Claims. Durable medical equipment suppliers miscoded claims in 2006 resulting in the federal government, private insurance, and individuals overpaying them $42 million for items like wheelchairs and oxygen, an investigation by the Office of Inspector General said yesterday.”

How might we make sure we are paying the right price for DME on time and with less administrative cost? Proper coding saves time, efficient electronic billing and payments tied to the codes expedite correct payment. As one wag said, a million here and a million there, and pretty soon you are talking about real money. DME coding is just one financial leak in the system that can be repaired.

Or how about this little nugget:

“Red Flags Deadline Pushed Back Again. The Federal Trade Commission announced today that—for a third time—it has pushed back enforcement of the Red Flags anti-fraud regulations until Nov. 1, a full year after it was first scheduled to take effect.”

Red Flag compliance is about making sure financial institutions and creditors have written identity theft programs.  For our purpose here, the interesting fact we take away is that government agencies make a lot of rules and regulations, but they often don’t take effect when or how they are supposed to. A lot happens between the law and its implementation, so consider that fact as you look at the laws regarding electronic health records, how timelines affect you, and the kinds of implementation procedures you may need.

A look into the sampler box of news items every day reveals yet another flavor of issues. And, of course, each problem contains its own solution. There is no problem or issue facing the health system that we can’t resolve by tapping into the deep reserve of brilliant, caring people who populate our hospitals, medical offices, research facilities, insurance industry and manufacturing sectors.  Interconnect these people, their financial and medical information, and put it to the service of patients in the interest of quality care at a reasonable cost using the information technology at our disposal today, and you’ve got a boxful of answers.

Smart Change: Healthcare Intelligence

Posted by: Peggy Salvatore

“Now or never.” These are the words of the President of the United States on health reform. Today, we in America are faced with making critical decisions regarding the future of our healthcare system. We all have opinions about how to improve our system to serve more people, make it more affordable, and improve the quality of care. Our opinions are almost always based in personal experiences, such as when you took your child to the ED or your mom to the oncologist.

With a nod to the fact that this is an incredibly complex issue and there is no simple solution, some changes to our current system will simply be smarter than others and net better long-term results.

Ponder a personal experience and consider what could have improved the interaction with your physician, hospital or pharmacy. All politics is local, and all healthcare is – ultimately- personal. Think about it.

What is the best experience you’ve had? The worst? The one you wouldn’t wish on your worst enemy? And what could have made it better?

Here is where I’ll start to beat my personal drum: electronic health records, when fully integrated and secure, will solve many quality-of-care issues, lower system costs and, by extension, make care accessible to more people.

How would your complete medical record, accessible to all your caregivers, have affected your experience in the health care system?

Smart change requires intelligence. We have the electronic capability to gather good intelligence and use it. Estimates say it will take a full generation to put enough medical data online to reap the benefits of our investment. “Time’s a’wastin”. The government’s offering the money to make it happen now. So, how ‘bout it?

Peggy Salvatore has been developing managed care and healthcare reimbursement web-based training programs for the healthcare industry for 10 years. She also writes eLearning programs on general business topics such as time management, project management and leadership. Prior to that, her background includes extensive research, analysis and writing for professional journal articles, white papers and executive background briefings on a broad range of health policy issues. She was a political reporter and columnist and covered the 1988 Republican National Convention before leaving daily journalism for the business world. She holds an MBA with a concentration in strategy and economics.