With hospitals and doctors under tremendous pressure to improve costs and quality fast, clichéd calls to “aim for the low-hanging fruit” are ringing in every boardroom and bedpan from Sarasota to Seattle.
But medical providers should set their sights a bit lower.
Why? Because “in health care, the low-hanging fruit isn’t just low-hanging fruit; the fruit is lying on the ground, and we have to be careful not to trip over it.”
That’s the axiom that Indiana University management professor Mohan Tatikonda repeats regularly to the physicians in an MBA program for MDs started in 2013 by IU’s Kelley School of Business in Indianapolis. His students, who hail from around the country and have been practicing medicine for an average of 20 years, shortened the phrase to simply “watermelons on the ground.”
It means that first-year MBA concept employed decades ago in most other industries can yield huge results among health care providers.
“On average, the state of operations in health care delivery is primitive. Fundamentally primitive,” Tatikonda said. “Just the basic understanding of patient flows, materials flows, information flows. Having them documented and diagrammed. This kind of thing until very recently was just not very common.”
It’s not that things such as Six Sigma or Lean are unknown to health care leaders. Consultant Chip Caldwell estimates that about 75 percent of hospital systems are using Lean in some way, compared with 53 percent identified by a 2009 survey by the Association Society for Quality. Only about one in 10 hospital systems is using Six Sigma currently, Caldwell estimates, down from a peak of popularity in the 2000s.
Some hospitals, such Virginia Mason and Barnes-Jewish, have employed these techniques to wide acclaim.
What few health care provider organizations have done, Tatikonda said, is make a regular, sustained habit of using process improvement concepts, so that all the people in their organizations became used to thinking that way.
The Affordable Care Act has now given health care providers the financial motivation to do exactly that. And the good news is that even small-scale projects that MBA students do for class can have a big impact in real-world health care environments.
Here’s one example: Tatikonda paired up one of his students, an ophthalmologist, with a Six Sigma expert from an Indiana manufacturing company to redesign the patient flow process at the Midwest Eye Institute in Indianapolis.
They found that that nearly all the eye patients took one of five paths through the office. So they figured out how they could eliminate time in a waiting room by having staff members immediately start patients into one of those five paths.
The result? Average visit time dropped by 20 minutes—or about 16 percent—while patient and employee satisfaction scores shot up.
Dr. Tom Ciulla, the ophthalmologist, who is a retinal surgeon at the Midwest Eye Institute, said Tatikonda and the Six Sigma expert were laughing, because the process of eliminating bottlenecks is the kind of efficiency work manufacturers did in the 1970s.
“That’s how far behind we are in medicine,” Ciulla said.
Here’s another example: Tatikonda worked with medical researchers at the Indiana University Vector Production Facility to develop a costing tool for the set up time, run time and materials needed for research-sized batches of gene and cell therapy agents.
The tool revealed various cost-saving strategies familiar in other industries, such as the fact that doubling a batch size only increased costs by 20 percent, not 100 percent. Their findings were published by the academic journal Human Gene Therapy and the tool is now made available to medical researchers by the National Gene Vector Biorepository.
“Set up and run time, capacity; this is MBA 101,” Tatikonda said. “It’s just so fundamental.”
At the very least, having clinicians learn these basic business concepts has given them a common language with their non-clinical administrators.
That was critical at the Indiana University Health hospital in Goshen, Indiana, which had been losing key physicians due to frustrations with what Dr. Len Henry, the hospital’s director of surgical oncology, called a “frenetic pace of change” and “metric terrorism.”
So Henry developed swim lane charts for all the people a surgeon like himself interacts with on a given day at the hospital. He then interviewed the 22 people he identified, from the receptionist to the CEO, using structured questions about the problems they saw in the hospital.
This work produced three key goals, with several actions points for each. Among them were: 1) Employ physician recommendations in decision making; 2) Consistently describe how success on metrics or finances benefit patients; and 3) Manage change more effectively by allowing time for stabilization between projects.
Henry handed his finding to the hospital’s CEO. The CEO presented it to all of the hospital’s vice presidents and, within days, Henry noticed a difference in how administrators were communicating with physicians and soliciting their input.
“I see people from the C suite and they comment about it. So I now it’s been looked at and taken seriously,” Henry said. “I’ll be curious to see our next physician satisfaction survey.”
Tatikonda predicts it will take another decade or more for health care providers to gather up all the ground-level and low-hanging fruit they can harvest with sustained process improvement efforts.
“Right now,” he said, “many of them are in the walking steps of understanding their processes.”
J.K. Wall is a health care reporter at the Indianapolis Business Journal and writes The Dose blog on the business of health care.
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