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Agenda
• Challenges in healthcare today
• PI and it’s application in healthcare
• PI and financial analysis
Learning Objectives
• Explain the importance of a PI Model to guide learning
• List key problems that PI can address to drive sustainability in healthcare
• Describe how organizational structure and managerial accounting are impacted by PI
Professional Background • 7 years in Automotive Manufacturing
– Ford and Goodyear
– Production, engineering, financial analysis
• 3 years in Electronics Manufacturing
– Rockwell Automation
– PI, engineering management
• 3 years in Healthcare
– Norton Healthcare
– PI
Strengths
Proximity to US Customers
Truck Market Dominance
Weaknesses
Push Flow
Brand / Model Proliferation
High Labor Cost
Opportunities
Leverage Worker Votes
Struggling EUR Brands for Sale
Threats
Transplant Operations
NAFTA
Lax Foreign Reg’s
Internal
External
Favorable Unfavorable
PI efforts over next 2 decades: Lead Time
Reduction Brand / Model
Rationalization Workflow
Efficiency
Industry Need Analogy: 90’s US Auto
US Auto in the 90’s had internal weaknesses that could be addressed to counter external threats
Strengths
Highly Educated Workforce
Outpatient Service Growth
Weaknesses
Controllable Volume Variation
Unnecessary Practice Variation
High Labor Cost
Opportunities
M&A / Partnerships
EBP Sharing
Threats
Retail Markets
VBP / ACA
Higher Deductibles
Internal
External
Favorable Unfavorable
Potential PI Efforts:
Scheduling Optimization
Practice Standardization
Workflow Efficiency
How do we improve without trade-off?
Industry Need: US Healthcare Today
US Healthcare today is facing similar challenges to sustainability that the US Auto Industry faced in the 90’s
Why PI in Healthcare? Healthcare is becoming more competitive
As competition increases, there is greater pressure for an organization to justify its existence
Existence is justified by providing sustainable value
Sustainable value is achieved through PI
PCAST: President’s Council of Advisors on Science and Technology BETTER HEALTH CARE AND LOWER COSTS: ACCELERATING
IMPROVEMENT THROUGH SYSTEMS ENGINEERING
www.whitehouse.gov/ostp/pcast
Find under Documents & Reports (May 2014 Report)
Fact Sheet Recommendations from PCAST
• Recommendation 1: Accelerate the alignment of payment incentives and reported information with better outcomes for individuals and populations.
• Recommendation 2: Accelerate efforts to develop the Nation’s health-data infrastructure.
• Recommendation 3: Provide national leadership in systems engineering by increasing the supply of data available to benchmark performance, understand a community's health, and examine broader regional or national trends.
• Recommendation 4: Increase technical assistance (for a defined period—3-5 years) to health-care professionals and communities in applying systems approaches.
• Recommendation 5: Support efforts to engage communities in systematic healthcare improvement.
• Recommendation 6: Establish awards, challenges, and prizes to promote the use of systems methods and tools in health care.
• Recommendation 7: Build competencies and workforce for redesigning health care.
What is PI?
Performance Improvement (PI) is the practice of enhancing the ability of an organization to learn so that it grows value for its customers with the greatest speed.
CREATE new knowledge SHARE new knowledge
Why Lean and Six Sigma?
Lean Waste Elimination
Standardized Work
Flow
Customer PULL
Six Sigma Standardization, Variation
Defects – Miss Elimination
Optimization
Process Control
SPEED STABILITY & ACCURACY
“We will be the region’s most comprehensive, strongest, and preferred
health care organization, setting the standard for quality and caring.”
What is Value?
An activity that changes the state of the patient or information to meet customer needs and add value (something a customer would be willing to buy / perceive value in having)
Those activities that take time or resources, but do not directly meet customer requirements or add value
Value Added Activity Non-Value Added Activity
Examples of Waste Type of Waste Definition Healthcare Examples
Defects Time spent creating, detecting, and resolving errors
Wrong dose administered to a patient
Overproduction Doing more than the patient needs or doing it sooner than needed
Unnecessary diagnostic procedures
Waiting Waiting for the next activity to occur Insufficient bed volume / turnover post surgery
Not Using Talent Waste incurred due to ignoring employees, their ideas, and their potential / development
Nurses caught in daily workarounds and not engaged in improvement
Transportation Unnecessary movement of the patient, specimens, or materials
Cath lab being far from the ED
Inventory Excessive amounts of supplies Drugs on hand beyond their shelf life
Motion Unnecessary movement by employees Lab techs walking miles per shift in a poor layout
Extra Processing Excessive activity in a process step Unused form data
Sources of Waste Source Definition Healthcare Examples Graphical Depiction
Process Design Waste that is inherent in the processes we do today.
- Long distances between the ED and CT Scan (motion) - Error opportunities resulting in extra inspection (defects / extra processing)
Unevenness Waste that is generated by variation of patient volume or supply delivery
- Poor coordination with EMS resources causing waiting in ED (waiting) - Infrequent ordering of supplies resulting in high inventories (inventory)
Overburdening Waste that results from insufficient capacity
- Poor planning with changing community needs resulting in diversion of patients to other facilities or rushing service (transportation / defects)
ED
CT Scan
Lab 100 ft
NHC DMAIC Improvement Process
PROCESS
MEASUREMENT
ASSESSING PROCESS
PERFORMANCE
*
*
PROCESS
STEPS
FOLLOW EVIDENCED-
BASED PROCESS
PROCESS
IMPROVEMENT
MODEL
DMAIC Process Overview
Phase Outcome
Define - Problem Defined - Key process metric(s) identified (id by customers)
Measure - Understand Current Process - List of inputs that might be causing the problem - Accurate baseline data (KPOMs)
Analyze - Process waste identified - Prioritized list of critical barriers and root cause(s)
Improve - New process identified - Actions needed to deploy new process + pilot
Control - Hard-wired process w/ hand-off to business
owner - Celebration!
Project Overview • Project Description: In 2011, 24 ED Stroke Patients were
treated with rt-PA out of a total Stroke Patient population of 558 patients (4.5%). Of the 24 patients, only 4 (16%) had a door-to-needle time of 60 min or less. Timely use of rt-PA benefits the patient in the following ways: – Drug Effectiveness: 33% probability of a higher-score recovery
outcome vs. no treatment
– Increased Benefit: Increased probability of favorable outcome at 3 months post-event as OTT (Last known well to rt-PA administration) decreased showing statistical significance (p=0.005<<0.05)
• Project Scope: All stroke patients eligible for rt-PA. – Start: Patient arrival at ED / End: Administration of rt-PA
• Project Goal: Achieve median DTN time of 60 min or less.
DMAIC
Current State VSM DMAIC
What we wanted to know: How does the process flow?
What we found: Most of the process time is spent waiting after the patient is done in Radiology and there are opportunities to improve.
• Process observations were made for each process step at each hospital
• Process was timed (stopwatch, checklists, timestamps)
• Current State VSM was assembled based on findings
ICU (NH or NBH)
General Public
EMS
ED Wait29.0 min (95%)
3.0 min (Median)
6.9 min (Average)
EMS
Transfer Pt12.0 min (95%)
0.0 min (Median)4.8 min (Average)
Transfer Pt1.08 min (NAH)0.5 min (NBH)X min (NSH)Y min (NH)
= 1
Sign-in
= 1
Triage
= 3
Stroke Response
= 2
CT / CTA
= 2
Admin rt-PA
Pt Info
= 1
Patient Registration
Stroke Order
EMR System
Records Management
Register Pt
Pt ID #
Pt ID bracelet
Add’t Wait15.8 min (95%)
2.1 min (Median)6.3 min (Average)
Wait on Lab &CT Results
Wait on Either:56.9 min (95%)
12.4 min (Median)19.3 min (Average)
N = 44 (includes 3 no waits)
Wait on Lab Result:56.9 min (95%)
32.4 min (Median)35.8 min (Average)
N = 8
Wait on CT Results35.5 min (95%)
10.5 min (Median)17.1 min (Average)
N = 33
Transfer Pt1.08 min (NAH)0.5 min (NBH)X min (NSH)Y min (NH)
Wait on Tx Decision
(includes CTA Wait)60.7 min (95%)
46.7 min (Median)51.2 min (Average)
N = 9 (Total rt-PA Pts in Study)
CTA TAT:82.0 min (95%)
61.0 min (Median)61.7 min (Average)
N = 6
Pure Wait on Tx Decision(All tests in)
41.7 min (95%)17.7 min (Median)16.7 min (Average)N = 8 (one had MRI)
# Admin = 1
Avg. Time = 2.00 min
# RN = 1
Avg. Time = 2.17 min
# RN = 1
# PCA = 1
# ED MD = 1
Avg. Time = 3.33 min
Call Ahead Order for CT
# RN = 1
# CT-Tech = 1
CT Avg. Time = 2.92 min
CTA Avg. Time = 4.83 min
# RN = 2
Avg. Time = 4.33 min
With the exception of the ED Wait queue, 95% wait times are really the maximum non-outlier data point of the set.
2.00 min 2.17 min
6.9 min
3.33 min
4.8 min 1.08 min
7.75 min
6.3 min 1.08 min 19.3 min
4.33 min
51.2 min
Expected DTN = 110.24 min
NVA Time = 90.66 min
VA Time = 19.58 min
# Admin = 1
CT Order
Lab Order
CT Order
CTA Order
= 3
Review CT
# Radiologist = 1
# ED MD = 1
# Neurologist = 1
CTA Order (as needed)
rt-PA Order
= 2
rt-PA Decision
# ED MD = 1
# Neurologist = 1
Issue Order for rt-PAto be administered
rt-PA Door-to-Needle (DTN) ProcessCurrent State: Data Range from 12/01/11 to 03/31/12
For N = 4 (4 of 8 had rt-PA)Draw to Lab: 23.2 min (Average)
CBC: 5.3 min (Average)INR: 20 min (Average)
CMP: 25.8 min (Average)
Post CT Wait for CTA Order:87.8 min (95%)
19.4 min (Median)36.6 min (Average)
N = 6
Process Step: CTA Scan
Aspect Question NBH NSH NH NAH
Systems
How is the impact to
DTN known? (Is it
quantifiable?) - Acute stroke checklist follows patient
- Not known/checklist not with patient
-manually write completion time
-Checklist not with patient - could check
MSTAT for recorded times -Unknown-checklist not always with patient
Pathways
Who is to do the Process
Step(s)?
(How clear is this?)
-CT tech
-Room 1 only
-CT tech
(CT1 preferred due to faster processing time -
10 mins vs 30 mins)
-CT techs
-2 scanners - 129 Seimens preferred for CTA -CT tech
Connections
How does he / she know
when service is
needed?
(How is this signaled?)
-Order from MD (requested based on
discussion with neurology)
-Currently creatinine result is awaited before
performing exam
(CTA done when patient has weakness on
one side and/or contraindications to tpa)
-Radioligist notifies ED MD of CT result
-ED MD consults with neurologist to
determine if CTA is necessary
(Outsourced to VRC at night)
-ISTAT creatinine done in ED - no delay
waiting for result
(table weight limit CT 1 650 #'s/ CT 2 450 #'s)
-Call from ED
-Can see order in computer
-Call from ED MD/neuro
-Can be verbal order
-Consent obtained if possible-use implied
consent if not
Activities
How does he / she know
what is needed?
(How is this
determined?)
-Standard process
-CT tech training
-Standard process
-CT tech training
-Contrast dose 1 cc/pound-max 100cc's
-Implied consent used if not able to obtain
consent from patient/family -Same
-Standard procedure
-CT tech training/annual competencies
-Same level skill training all shifts
-Contrast load calculated per protocol
Activities
How does he / she know
it is done correctly?
(How is this verified?)
-IV checked with saline flush (blown IV could
delay)
-View images real time to see if contrast is
flowing
-Monitor for adverse reaction real time
-Must have internet for transmitting images
(Re-visit ED MD/neurology dialogue
structure)
(Pts at low risk for CIN; investigating NOT
waiting for result to do exam)
-Check computer to verify no contrast allergy
-20g IV necessary to inject contrast
(CT 1 allows test bolus of saline prior to
contrast)
-Audible alarm for high pressure during
injection
-Images visually checked real time to verify
contrast was delivered
-Long distance to radiology - patient should
stay in dept. until determination is made for
CTA
(Have had issues with internet connectivity
at night - event actio plan?)
-Same with these additions:
-Do not use implied conset. Will wait for ED
MD to sign before completing exam
-Only manualy flush available to check IV
-No internet connectivity issues reported
-Radiologist on back up call
-CT tech review images real time for contrast
flow; contacts radiologist if needed
-Alternative contrast options posted in
radiology for contrast allergies
-Machine does test bolus to check IV; high
pressure alarm
-Daily QA's done; biomed does preventive
maintenance on machines; not posted
anywhere
-
Comments
Impact of Top 3 Priorities DMAIC
What we wanted to know: What is the impact of our efforts?
What we found: Focusing on just the Top 3 improvement priorities alone will address over 70 min of the 110 min expected DTN Time.
= 2
Admin rt-PA
Wait on Lab &CT Results
Wait on Either:56.9 min (95%)
12.4 min (Median)19.3 min (Average)
N = 44 (includes 3 no waits)
Wait on Lab Result:56.9 min (95%)
32.4 min (Median)35.8 min (Average)
N = 8
Wait on CT Results35.5 min (95%)
10.5 min (Median)17.1 min (Average)
N = 33
Wait on Tx Decision
(includes CTA Wait)60.7 min (95%)
46.7 min (Median)51.2 min (Average)
N = 9 (Total rt-PA Pts in Study)
CTA TAT:82.0 min (95%)
61.0 min (Median)61.7 min (Average)
N = 6
Pure Wait on Tx Decision(All tests in)
41.7 min (95%)17.7 min (Median)16.7 min (Average)N = 8 (one had MRI)
# RN = 2
Avg. Time = 4.33 min
19.3 min
4.33 min
51.2 min
Expected DTN = 110.24 min
NVA Time = 90.66 min
VA Time = 19.58 min
For N = 4 (4 of 8 had rt-PA)Draw to Lab: 23.2 min (Average)
CBC: 5.3 min (Average)INR: 20 min (Average)
CMP: 25.8 min (Average)
Post CT Wait for CTA Order:87.8 min (95%)
19.4 min (Median)36.6 min (Average)
N = 6
#1 Tx Decision
#2 Lab Label
#3 rt-PA Box
Over 40 improvement
options found!
#1: Tx Decision Roadmap DMAIC
What we wanted to know: How is delay in the Tx Decision addressed?
What we found: This is the EBP and NHC Neurologist accepted Tx Criteria. Following this and the broader process for Acute Stroke will reduce delays in Tx.
Stroke call from ED
Process Step to continue Tx Decision
evaluation
Give rt-PA
Contraindication – STOP and Do NOT
give rt-PA
Does CT Scan show Hemorrhage or other
contraindication?Yes
No
Does CT Scan show previous
stroke?
Gather patient data to determine when last stroke occurred
Last stroke within last 3
mos?
Do NOT give rt-PA and consider other
Tx optionsYes
Yes
Do NOT give rt-PA and consider other
Tx options
No
No
Does initial history review show any
contraindications?
Do NOT give rt-PA and consider other
Tx optionsYes
No
Is bleeding abnormality, thrombocytopenia, or any
anticoagulant use suspected from history?
Do lab results show abnormal values for INR,
H&H, or platelets?Yes
Do NOT give rt-PA and consider other
Tx optionsYes
Verify Last Known Well
Last Known Well > 3 hrs ago?
No No
BloodPressure NOT
Controlled> 185 / 110
No
Yes
Do NOT give rt-PA and consider other
Tx optionsYesGive rt-PA No
Do NOT give rt-PA and consider other
Tx options
Process Map for rt-PA Tx DecisionNorton Healthcare
• Worked with Stroke Neurologists to develop a shared view of risk (Contraindication to Tx)
• Mapped with input from EBP research and Stroke Neurologists (red is contraindication)
• Minimizes delay between receiving required results and issuing an order
• Included in related physician onboarding documentation
DTN Time Comparison DMAIC
What we wanted to know: How will we control DTN Time?
What we found: We have an on-going measurement system, processes in place, and a system team committed to continuously improving.
07/15/2012
06/26/2012
05/20/2012
03/05/2012
01/14/2012
12/01/2011
11/12/2011
10/03/2011
07/29/2011
05/27/2011
02/17/2011
200
150
100
50
0
Date
DTN
Tim
e (
min
)
_X=59.3
UCL=100.5
LCL=18.1
Pre-Project Project
1
DTN Time (min) by Project Stage All solutions implemented with
negligible cost!
PI Impact to Culture
Good Hero
Reactive
Fire fighter
Broken Processes
Fragmented efforts
Great Leader
Proactive
Permanent fire preventer
Efficient, integrated processes
Aligned efforts
PI Opportunities in Healthcare 1. Redesign Practice Care Settings – Increase Prevention
2. Optimize Scheduling of Procedures – Stabilize Demand
3. Increase Accuracy of Productivity – Optimize Staffing
4. Iterative Redesign of Work – Continually Improve
A significant amount of the nation’s cost-of-care concerns can be addressed by incorporating these strategic objectives
Opportunities mostly focus on addressing operational concerns rather than clinical concerns
Operational vs. Clinical
The science in healthcare has traditionally been on the clinical side, but there is opportunity to have operational excellence
Core Clinical: Activities that involve Dx, Tx, or Prevention
Shared Territory: Where clinical factors have operational implications or where operational limitations influence clinical decisions
Supporting Operational: Activities that are not part of Dx, Tx, or Prevention
Many activities are considered operational: - Scheduling - Staffing - Allocation of Equipment - Capital Planning
Redesign Practice Care Settings
P1-3. Enhance Patient & Provider
Relationship (Assessment,
Dialogue, etc.)
P1. Leadership (Standard Performance
Metrics, Aligned Direction, Stakeholder
Engagement)
P1. Staffing
(Reliable & Efficient Workflows, Balanced to
Volume)
P1. Clinical Design
(EBP Protocols, CEP)
P2. Volume Balancing
(Panel Sizing, Scheduling)
Redesigning practice care settings, starting with primary care, drives preventive care efforts while testing concepts
Workflow Redesign
Eliminating unnecessary work, rebalancing assignments, and redesigning the Provider – MA flows have improved capacity
Reception Patient 2
Desk Nurse/LPN
MA
Provider
Check-out/Scheduling Patient 1
Patient 2
Patient 2
Provider Patient 1
MA Provider Patient 2
MA Patient 1
Provider Patient
MA
Room 1
Room 2
2
3a
3b
5a
5b
4
16
i ii
• Redefined work roles to balance work load
and move interruption away from the MA
• MA now able to be in a cyclical workflow
with provider for higher throughput
Optimize Scheduling of Procedures
Total Excluding
Weekends Current State
Simulated
(~15% Vol. Increase)
OR minutes 87,685 101,520
Actual LH 10,471 10,891
Target LH 9,663 11,188
Prod. Index 92.29% 102.72%
OR min per LH 8.25 9.32
Avg Daily OR min 4,384 5,076
Reducing daily scheduling variation allows for increased utilization and efficiency
>10% Productivity gain possible by
reducing CV from 0.36 to 0.07
Increase Accuracy of Productivity • Productivity standards are based on benchmarks
– Internally modified to better reflect current process – Do not identify true process potential (theoretical capacity)
• Benchmarks are based on peer group performance – Disguises waste from unevenness, hides potential
Hospital Nursing Surgery
Pulmonary
Services Imaging Cardiology
Hospital
Total
#1 30.51 1.68 2.34 0.42 1.05 35.70
#2 (21.91) 3.81 2.57 3.00 6.77 (2.20)
#3 (15.94) (3.24) 0.30 (1.92) (1.48) (15.39)
#4 (3.63) (0.67) 3.00 1.21 1.56 6.12
#5 (28.89) (3.52) (1.48) (2.34) (1.10) (32.58)
System (39.86) (1.94) 6.72 0.37 6.80 (8.36)
Variable Paid FTE Opportunity
(Based on Consultant Productive Standard Recommendation)
Opportunity to
apply
improvement in
practices too
0.67 FTE opportunity was
found to be closer to a
5.00 FTE opportunity
More accurate measurement of performance allows for gaps to be better understood and addressed
Iterative Redesign of Work
Current processes are continually challenged in a structured manner through procedures for increased efficacy
• Operational procedures include plans for reaction to abnormal events – Stop the process to analyze and fix
– Set new standards (inspect for what you expect)
• Take every opportunity to encourage finding problems and solving them – Can’t fix what you can’t see
– Everybody should have a specific role to play
• Structure reports & accounting for identifying system level problems with drilldown
Report Example
Data can be arranged for higher power analysis that identify where further studies / engagement is most beneficial.
Provider
Name
Total Var from AVG
by Px: OR Supply $
Surgeon A $210,798
Surgeon B $66,470
Surgeon C $34,064
Surgeon D $20,434
Procedure
Total Var from AVG
by Px: OR Supply $
Count
over AVG
Count of
Cases
Px 1 $53,971 30 33
Px 2 $52,467 30 32
Px 3 $36,088 11 11
Px 4 $25,944 25 25
Px 5 $15,238 7 7
Px 18 $0 0 1
Px 19 -$11 0 1
Grand Total $210,798 138 173
Provider Name
Total Var from AVG
by Px: OR Supply $
Count
over AVG
Total Var from AVG
by Px: OR Implant $
AVG Var from AVG
OR Minutes by Px
AVG Var from
AVG LOS by Px
AVG Var from
AVG SEV by Px
Count of
Cases
Surgeon A $52,467 30 $201,192 28 (2.1) (0.6) 32
Surgeon B $26,847 22 $139,927 33 (2.4) (0.8) 22
Surgeon X ($19,051) 0 ($6,009) 75 0.7 0.1 30
Surgeon Y ($24,108) 7 $20,423 (43) (0.2) 0.2 71
Surgeon Z ($40,117) 1 ($365,280) (6) (0.3) 0.1 64
Managerial Accounting
Segment reporting provides more insight than traditional allocation of costs.
• Traditional allocation spreads indirect costs to business units via assumed cost driver
– Cost driver may not be highly correlated
– Costs do not necessarily go away if unit is closed
• Segmented income statements only assigned traceable (direct) fixed costs to business units
– Traceable costs disappear if unit is closed
– Common costs are lumped into a cost pool
– Structure allows drilldown to see performance gaps
Segment Reporting Example: Step 1
The Medical Group has a low segment margin that is due to relatively high variable patient care expense in Primary Care.
Example Only Healthcare, Inc.
01/01/14 - 03/31/14
Total Company Hospital Medical Group
Unrestricted revenue $85,000,000 $70,000,000 $15,000,000
Variable expenses:
Variable patient care expenses $66,500,000 $55,000,000 $11,500,000
Other variable expenses $9,000,000 $7,000,000 $2,000,000
Total variable expenses $75,500,000 $62,000,000 $13,500,000
Contribution margin $9,500,000 $8,000,000 $1,500,000
Traceable fixed expenses $4,500,000 $3,500,000 $1,000,000
Division segment margin $5,000,000 $4,500,000 $500,000
Common fixed expenses not
traceable to individual divisions $5,000,000
Net operating income $0
Divisions
Medical Group Division
01/01/14 - 03/31/14
Total Division Specialty Primary
Unrestricted revenue $15,000,000 $6,000,000 $9,000,000
Variable expenses:
Variable patient care expenses $11,500,000 $4,000,000 $7,500,000
Other variable expenses $2,000,000 $500,000 $1,500,000
Total variable expenses $13,500,000 $4,500,000 $9,000,000
Contribution margin $1,500,000 $1,500,000 $0
Traceable fixed expenses $500,000 $200,000 $300,000
Service line segment margin $1,000,000 $1,300,000 ($300,000)
Common fixed expenses not
traceable to individual services $500,000
Net operating income $500,000
Service Lines
Segment Reporting Example: Step 2
Addressing the challenges for Primary Care Office B would significantly impact the company’s net operating income.
Primary Care Service Line
01/01/14 - 03/31/14
Total Service Office A Office B Office C
Unrestricted revenue $9,000,000 $2,000,000 $4,000,000 $3,000,000
Variable expenses:
Variable patient care expenses $7,500,000 $1,600,000 $3,450,000 $2,450,000
Other variable expenses $1,500,000 $300,000 $700,000 $500,000
Total variable expenses $9,000,000 $1,900,000 $4,150,000 $2,950,000
Contribution margin $0 $100,000 ($150,000) $50,000
Traceable fixed expenses $200,000 $50,000 $100,000 $50,000
Service line segment margin ($200,000) $50,000 ($250,000) $0
Common fixed expenses not
traceable to individual lines $100,000
Net operating income ($300,000)
Practices
Some factors to investigate further for Office B: • Revenue integrity (e.g. proper coding of visits and supporting documentation) • Compensation structure (e.g. NP to MD ratio) • Practice efficiency (e.g. visits per provider per day and use of tests / supplies)
Segment Reporting Impact
Segment reporting can drive the business to be structured with better clarity.
• Only have common costs where necessary – Examples: CEO compensation, corporate office lease
• Make common costs traceable where possible – Example: Accounting staff of 20 broken out to cover
business units
– Supporting departments can still have central leadership to ensure standardization
• For more see managerial accounting text – Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2008).
Managerial Accounting 12e. New York, New York: McGraw-Hill/Irwin.
Summary
• Challenges to healthcare sustainability (SWOT)
• PI to minimize waste & grow value
• Transforming into a proactive culture is a journey
• Great opportunities to improve operations
• Need to align reporting and structure
Getting Started
• Find a PI Mentor
• Identify a project need
– Culturally manageable
– Strategically important
• Get a Senior Leader Champion
• Pick a PI Methodology (e.g. DMAIC) and follow it
Recommended