Viewpoints
by Eric Gatmaitan

I believe it is fair to say that health systems realize the existence of wasteful and inefficient delivery of service adds to the growing reimbursement gap. These and other market forces are influencing health system models to innovate and implement continuous improvement processes.

Historically, the science of process design and improvement introduced the Industrial Engineering discipline to the manufacturing industry. In the 1980s, many manufacturers resisted process improvement methods, such as the Toyota Production System, because organizations insisted that “we don’t make cars” or “we are different.” Other industries were temporarily insulated from free-market forces and only recognized the need to innovate a few decades later.

To overcome the barriers of “we don’t make cars” and “we are different”, we need only explore the definition of “system” in Health System. Is the word “system” in Health System different from that in Financial System, Insurance System, Manufacturing System, Banking System, or even Office System?

By definition, a system is a group of interrelated elements working together toward a common goal. These interrelated elements include people, equipment, materials, methods and data. Process improvement methods focus on enhancing the “working together” component so that an organization can get the most output with the least expenditure of resources. Simply put, get more with less while improving quality. That’s efficiency! It’s safe to say that any organization in any industry has a common necessity of process improvement.

Indeed, even health systems benefit from process improvement methods initiated in other industries. Material availability with the least amount of inventory, quick changeover of surgical suites, standardized processes and process compliance are but a few components that can be refined. We simply need to open our minds, focus on the methods and adapt process improvement to our own work environments.

A top-down (executive management to operations) implementation is the most effective and efficient approach. Performance metrics and processes need to be designed at a strategic level then cascaded down to the operations level where the day-to-day activities are performed. With a top-down approach, a consistent vision and message is communicated consistently throughout the organization. With over two decades of first-hand experience implementing the top-down approach, the implementation cycle is at least 50% faster, improvements are embedded into the standard operating procedures and a continuous improvement cycle is integrated into the organizational culture.

Certainly, technology will never be the silver bullet that cures all. The same goes with the reliance for vendors to develop and deliver turn-key solutions. This fragmented approach adds to the burden of complexity and conflicted inter-operability of solutions.

Health systems must take the leadership position to innovate and develop the most effective and efficient healthcare delivery system. This takes strong commitment, a disciplined approach and performance accountability throughout the entire organization.  All for the great quest of lowering operating cost, while improving patient care.

More Information on Process Improvement Methods

For the past 20 years, Total Quality Management (TQM), Toyota Production System (TPS), Lean, Kaizen and Six Sigma are the widely published process improvement methods. Various versions, hybrids and labels evolved to custom-fit the approach and “repackage” the methods to fit an industry or organization. No matter how these process improvement techniques are used or what they are called, the underlying objective remains the same – improving process effectiveness and efficiency, while substantially improving quality output.  Here is a summary of the widely used process improvement methods:

Total Quality Management focuses on achieving customer satisfaction through the delivery of high quality goods and services. TQM implementations are driven by each department that monitors performance at satisfying both internal and external customer requirements. The zero-defect goal provides the motivation to continually improve department performance.  In a health system, a defect may be a process non-compliance, wrong diagnosis or ineffective treatment.

Toyota Production System is a process-oriented approach at improving a balanced set of performance metrics that includes safety, quality, delivery and cost. Small work teams of 6 to 8 members review performance metrics on a routine basis and interface with a support staff that provides resources for implementing improvements that are beyond the team’s scope of responsibility.  Inconsistencies and sub-standard performance are the key areas of focus for continuous improvement.

Lean is an approach for reducing waste - unnecessary activities, imbalanced workflow, waste and idle time are a few examples. Project teams, usually formed from cross-functional departments, are organized to identify and reduce waste in a targeted area. The diverse membership enables the team to question every detail of the process and identify potential waste. The identified waste is presented to the work center team and jointly develops an action plan to reduce waste.

Six Sigma was developed by and is a registered mark of Motorola. Six Sigma is a project-based approach that utilizes statistical analysis at understanding the problem statement and evaluating the effectiveness of the process improvement initiative. Six Sigma aims to reduce the number of defects to 0.0003%, virtually the same as the zero-defect goal of TQM.

Kaizen, Japanese for “improvement”, is a project-based process improvement initiative to implement big changes in a target area in a limited time-frame – often within a day or a week. These events, known as Kaizen Blitz or Kaizen Events, are used by organizations to showcase improvements that inspire and encourage the entire organization.

Attend the Spring 2009 IDN Summit to hear Eric Gatmaitan discuss these programs further in his session, Strategic Management Track: Understanding the Variety of Total Quality Management Applications.