Healthcare is important to all of us. We like to believe that not only are we being cured of our ailment, but that our healthcare provider really does care about us. If it is our loved one that is being affected, we’d like to believe that the healthcare provider did everything within their power to save or improve their quality of life.

On the other hand, the healthcare provider has to deal with operating costs, government control of health insurance reimbursements, rising malpractice lawsuits, among other financial issues. It is safe to assume that rising healthcare costs isn’t all the fault of the economy; some of those costs could be attributed to the providers not being as efficient and effective as they could be.

Six Sigma to the Rescue

Six Sigma is a data driven process, which means the decision maker is…data. So gut instinct, intuition, even past history doesn’t play any part in changes that need to be made in the present.

This data includes Six Sigma’s own tactics that will prioritize and isolate the issue at hand; then given a time frame (usually 4-6 months) to improve the issue by 50%. Please understand that Six Sigma’s ultimate goal is to get the problem corrected to as near perfection as possible.

The healthcare industry is the ultimate service industry. So as an example, you’d have to define the patient’s needs, requirements and the process that is being targeted for improvement. Each improvement has its own targeted requirement. Patient satisfaction is top priority in the healthcare industry, and it looks like Six Sigma is making its mark.

6Sigma.com has many clients across the healthcare field, including Blue Cross Blue Shield, California Department of Mental Health, Vanderbilt University Medical Center, Aetna, among others.

If you would like more information or are interested in one of our courses please visit the 6Sigma.com training class schedule.

Learn more information about 6Sigma.com’s Lean Six Sigma training coursework, available as classroom, onsite, or online options.

The post Six Sigma and the Health of Healthcare appeared first on 6sigma.

Ask yourself, do you want to deliver faster Six Sigma projects that don’t overstep your budgeting parameters? Then it’s essential for you to outline a detailed plan in your project charter. Your plan will act as your guide through the rough waters of process improvement.

Key performance indicators are highly useful tools here, enabling you to identify precisely which actions benefit you as a company. As such, there are numerous KPIs to help you on your Six Sigma journey, one of which we look at today: Project Cost Variance (PCV). Join us and learn how you can use PCV to deliver Six Sigma projects on time and on budget.

Stay Focused with Project Cost Variance

It’s important to know that Six Sigma relies on the measurement and analysis of process issues. Controlling problems allows you to create solutions that prevent them from recurring, benefitting the business in the long- and short-term. Without a strong plan to follow, you’re likely to lose sight of your goals and business needs. Losing track of your priorities will only send you veering off budget towards slow delivery times. Moreover, this doesn’t just impact you, but also your customers, who depend on you for quality products and services. If customers don’t see any value in your services, or if they see you as unreliable, they’ll take their business elsewhere. For you, this is detrimental, but Six Sigma can help. First, however, we must define cost variance.

What is a Cost Variance?

A cost variance is the amount by which your project exceeds or falls under your maximum budget. Cost variance is one of two key areas that you should monitor throughout your project, the other being schedule variance, i.e., how early or late you are to meet project deadlines. You can use the following equations to calculate both cost and schedule variance:

• Cost Variance = BCWP (budgeted cost of work performed) – ACWP (actual cost of work performed)
• Schedule Variance = BCWP – BCWS (budgeted cost of work scheduled)

What is Project Cost Variance?

PCV is the process of evaluating your project’s financial performance. You should compare the budget you agreed before starting the project with the actual amount you spend. You can calculate PCV by finding the difference between BCWP and ACWP. Your ideal project cost variance should be when your BCWP equals the same as your ACWP. Your project cost variance provides otherwise unavailable insight into your finances throughout the scope of your project. Using it to your advantage allows you to monitor when and where you breach your budget. When you use PCV together with DMAIC, you can actively control your finances, targeting areas for improvement, like overspending. The result is a more focused, efficient, and successful project.

The post Six Sigma and KPIs: Project Cost Variance appeared first on 6sigma.

Six Sigma helps organizations in all industries reduce variation (any result the customer does not expect). In a healthcare setting, patients are the customer, and to reduce variation in their eyes, healthcare providers need to deliver quality care. This can be done by focusing on improving healthcare processes by making them efficient and cost-effective for both the organization and its patients.

Variation or defects lead to customers becoming dissatisfied. And when it comes to matters of health, the severity of the dissatisfaction can lead to loss of life. For instance, if a patient is incorrectly diagnosed and given the wrong medication and/or treatment, their health can severely deteriorate. Through Six Sigma, healthcare providers can eliminate such errors from happening.

Unfortunately, the healthcare industry doesn’t have many processes that can be automated. This means humans are at the forefront, which makes variation a major concern. That is where Six Sigma can play a vital role in making the healthcare industry better.

How Does Six Sigma Improve Healthcare Processes?

Too much human involvement means that there are too many variables to consider. And to make it worse, these variables tend to be small, making them difficult to quantify. But through Six Sigma’s DMAIC methodology, this becomes easier.

Here is how healthcare providers can use DMAIC to their advantage:

• Define: The problem being experienced, whether it is long wait times for a doctor’s appointment or improper diagnosing, needs to be identified. Afterward, it needs to be defined in a clear and concise manner.
• Measure: How much do the healthcare processes need to be improved? The Measure phase is where the extent of the problem is assessed and put in quantifiable terms. As such, the Six Sigma team comes up with the necessary performance measures and KPIs.
• Analyze: The data is collected in regards to the performance indicators identified in the previous steps, allowing the team to analyze and zero in on the areas of improvement.
• Improve: The team begins making changes to the processes in order to improve the problematic processes.
• Control: The performance of the healthcare processes is monitored to see if the changes have indeed led to improvement. If not, the previous steps are repeated. Furthermore, this step is repeated continuously, regardless of success, to improve the processes on an ongoing basis and ensure that any gains stick.

Outcomes of Using Six Sigma to Improve Healthcare

When Six Sigma is implemented correctly, the healthcare organization should experience the following outcomes:

• Customer satisfaction will be improved
• Turnaround of lab results will be faster
• Human errors from doctors, nurses, and other healthcare professionals will either be reduced or eliminated
• The wait time for doctor appointments will be reduced
• The supply chain will be streamlined, increasing the pace at which healthcare services are delivered
• Medical claims will be reimbursed much faster

Conclusion

With Six Sigma, healthcare providers can improve their processes, leading to cost reduction and customer satisfaction. Not only will this improve the quality of life for people who rely on their services, but the organizations will see their bottom line increase as well. However, Six Sigma needs to be implemented correctly by following the DMAIC methodology to experience its positive impact.

Learn more about our training and courses

The post Importance of Six Sigma Implementation in the Healthcare Industry appeared first on 6sigma.

Six Sigma has benefits that make it an essential process improvement methodology no matter the industry. However, the origins and popularity of Six Sigma are in the manufacturing industry. For instance, it has seen tremendous success in adding value to production processes, leading to a quality output that not only increases customer satisfaction but the organization’s bottom line as well.

Anything that is Six Sigma-related can also have a similar impact on health systems like hospitals. Essentially, it can significantly improve patient care, which also improves customer satisfaction. Here are a few ways in which it can help with this through quality improvements. Six Sigma can:

• Make service delivery faster by reducing the number of times patients have to wait to be helped by a doctor
• Reduce errors made by nurses and other hospital staff, leading to better patient care.
• Allow patients to get their lab and other diagnostic results faster by minimizing the turnaround time
• Increase the rate at which insurance claims are processed for faster reimbursements.
• Make the hospital’s services appealing to customers by making sure that the customer’s voice is a major factor when formulating healthcare services
• Provide patients with their medical records, as well as other pertinent health information much faster

DMAIC (define, measure, analyze, improve and control) is what can play an integral role in helping hospitals realize the above-mentioned benefits through Six Sigma. Here’s a general overview of how it can be used in a hospital setting to improve patient care.

How Hospitals Can Utilize the DMAIC Methodology

One must keep in mind that quality improvement comes after solving significant problems within the system set in place. For that, the DMAIC method is the most used, highly-structured and data-driven approach for identifying and eliminating problems.

Let’s look at each one of the phases in the hospital context:

• Define: Patients are identified, along with what they want and need. On top of that, everything identified is defined in a clear and concise manner, along with the process’ end goals and capabilities
• Measure: How good is the current level of healthcare? This needs to be measured to get an accurate picture of what needs improving. A number of key permanence indicators (KPIs) can be used here, such as staff-to-patient ratio, patient wait time and patient satisfaction levels.
• Analyze: After the Measure phase, there will be data that needs to be analyzed using Six Sigma’s tools. To get an accurate picture of the problem that is affecting the quality, the team might have to utilize advanced statistical methods.
• Improve: This is where the patient care process goes through a number of changes to make it better. At this phase, it is crucial to make sure progress is tracked so that data is available to inform the team on whether the changes made are effective or not.
• Control: At this stage, the improvements made will be standardized. The team will create standard operating procedures, which may include protocols and policies, that will guide future patient care improvement efforts and ensure that the improvements made so far do not get undone overtime.

Conclusion

Six Sigma can make a huge and positive impact on hospitals, as far as improving patient care goes. And as more patients become satisfied, the hospital can get more patients and increase its bottom line. With the DMAIC method at the hospital’s disposal, improvement is more than likely.

Learn more about our training and courses

The post How DMAIC Helps Hospitals Improve Patient Care appeared first on 6sigma.

Six Sigma is a manufacturing methodology aimed at improving processes and reducing the occurrence of defects in products. However, defects are not just found in products, but in services as well. So if you’re wondering if Six Sigma can apply to something like the health insurance industry, the simple answer is “Yes”.

People need health insurance to pay their medical expenses, meaning errors (defects in this scenario) have a huge impact on their lives. This can range from health insurance being too expensive to afford to insurance claims being delayed or wrongly declined.

How Six Sigma Applies to the Health Insurance Industry

In 2011, a report by the American Medical Association (AMA) showed that the error rate in the health insurance industry is 19.3%. This costs the industry $17 billion annually (it is no wonder the cost of health insurance is high). So how can Six Sigma help insurance companies reduce their error rate?

First of all Six Sigma provides health insurance companies with a way of measuring the quality of performance. It uses a statistical model that gives a rating between 0 and 6. When the quality of performance measures at 0, it indicates that there is low-quality performance. On the other hand, a rating of 6 translates to high-quality performance and the achievement of Six Sigma (3.4 defects per million opportunities).

When insurance companies discover that they fall below reaching Six Sigma, they can work hard to improve their processes. Six Sigma is applicable wherever there are definable and repeatable processes. Thankfully, health insurance is full of such processes, from issuing policies to claims processing to insurance payouts.

One tool within the Six Sigma arsenal they can use to improve their processes is the DMAIC model. DMAIC, which stands for Define, Measure, Analyze, Improve (and Standardize) and Control, is a series of data-driven steps for process improvement.

3 Benefits of Six Sigma in the Insurance Industry

When health insurance companies utilize Six Sigma the right way, they can experience the following three benefits:

1. Standardization of Insurance Claims Submission

By putting in place consistent procedures for information gathering on insurance claims forms, these companies can standardize their insurance claims submission process. This can significantly reduce the number of insurance claims that are filed with inaccurate and/or insufficient information. Furthermore, it can also reduce the costs of processing insurance claims since customer follow-ups are dramatically decreased.

2. Reducing Escalation of Claims

When there are clear guidelines for escalating claims concerning coverages, the number of avoidable escalations can be greatly reduced. They can even be eliminated if other systems of daily performance measurement are put in place.

3. Improved Customer Satisfaction

One way customer satisfaction can be improved is by minimizing frustration. Frustrations can occur because of things like delays. By standardizing quality performance procedures, health insurance can minimize frustration and increase customer satisfaction.

Conclusion

Six Sigma applies to all industries that have repeatable and definable processes. This includes the health insurance industry as well. And when done properly, Six Sigma can lead to benefits that can decrease costs and increase satisfaction – both of these can boost the insurance company’s bottom line.

Learn more about our training and courses

The post Does Six Sigma Apply to the Health Insurance Industry? appeared first on 6sigma.

The patients were assigned personal care managers who would work with them. These managers would educate the patient about their disease, which also included speaking to their families about the medications as well as helping to assist in the patient’s treatment plan with mental health and other medical providers. 

Even after all these efforts, readmission rates were still very high, especially for mental illness and substance abuse.

Enter Six Sigma! The approach was simple: they began a project using the DMAIC template to find the possible causes for such a high readmission rate. They needed to determine the missing gap that caused the missed goal, and since it was such a wide gap, something needed to be fixed. So after using the DMAIC template (Define-Measure-Analyze-Improve-Control), the findings proved interesting.

Here were the results:

• The readmission data was incorrect and misleading.
• The accountability of the high-risk patients was inadequate.
• The follow-up plans for these high-risk patients was inadequate.
• The follow-up communication did not add value, it wasn’t effective.

The Improvements:

• Create and redefine a customer-focused readmission goal.
• Create an improved discharge and follow-up plan for the patient.
• Give auto ICM enrollment both to providers and patients.
• Improve communications and delivery.
• Implement all protocols and training for all care coordinators, which includes employee assistance programs and all nonclinical services.

The results after one year:

• A 53% decrease in readmissions.
• A savings of $3,000 per patient as well as a 49% decrease in inpatient care expenditures.
• A 14.9% improvement in the rate of patients taking their medications as prescribed.

The project was a huge success, although it took a year and a lot of data, Cigna achieved their goal and continues to do so.

Interested in improving systems at your healthcare organization? For more information on our Lean Six Sigma courses and services, please visit 6sigma.com. 

. 

The post The Cigna Health Insurance Story Starring Six Sigma appeared first on 6sigma.

Interesting, right? It makes sense. After all, you are dealing with real data that doesn’t lie (whether the weight is actually coming off). It is real for you to see. It’s a lot of work, but it is fun!

Let’s see how applying the DMAIC template to the real-world situation of a diet would work: 

Define: State the reason you want to lose weight. Outline the types of foods you want to include in your diet, and also include all the reasons you are going on this diet.

Measure: Here is where it gets fun. Go get your cholesterol, blood pressure, and  triglycerides checked — this will give you a baseline. Then weigh yourself and take measurements, including how many hours you are sleeping (there are apps available for this). Then also write down your current eating habits as well as what you do for exercise. 

Analyze: Take the above data and do a complete Root Cause Analysis. Use the brainstorming tools and the 5 Whys to get to the root of the weight gain. This alone can help you gain momentum on your weight loss once and for all. You will be making spreadsheets of all the data; this way it is easy to compare how much you have improved.

Improve: Now that you have collected all the information and have begun putting this new way of eating and exercising into action, you can start tracking the improvement. You might want to try different approaches that are easy for you to follow. Then pick the best one and try it out. If after two weeks you are feeling good and see improvement, then move to the next phase.

Control: Now that you have picked out both your eating and exercise routines, be sure to monitor it. If it is working, stay on it. After one month, take your health measurements and compare them to your baseline. Do the same with the other data.

For more information on our Lean Six Sigma courses and services, please visit 6sigma.com. 

The post Six Sigma and Your Diet appeared first on 6sigma.