If you're reading this, that means the world did not end a week ago. On the other hand, it also means your struggle with waste and inefficiency in healthcare continues.
In light of some of the new rules and regulations stemming from the Patient Protection and Affordable Care Act, as well as the noise surrounding the unprecedented level of consolidation in healthcare services, sometimes structural transformation can take a back seat.
This is especially so when so many seemingly more immediate concerns are competing for the CEO's attention.
But you can't rest on working to get waste out of the system. It's a necessary precursor to being able to deliver on value. Excess costs are your enemy, and they're insidious, because they're not as visible as, for instance, a ratcheting down of reimbursement rates, or the potential combination of a local competitor with a deep-pocketed bigger system.
Yet they fester.
The more activist CEOs—those who are not just looking around for an exit ramp for their organization to lock arms with a competitor that is deeper-pocketed and further along the accountable care journey than they are—recognize this. They realize that the prerequisites for survival in an accountable care world have efficiency at the top of the list.
Ron Paulus, MD, who has been CEO of Mission Health in Asheville, NC, for a little more than a year, has focused on eliminating waste because he believes he can drive more volume to his hospital if he can make the visit less wasteful, both in time and other resources.
If that were the only reason to attack inefficiency, it would be enough. Really, the initiative—as well as verifiable tracking of results—adds to the mosaic Paulus can present at contract negotiation time. It also prepares Mission Health to participate in other value-based purchasing initiatives.
What's the most important way to integrate such change? Paulus thinks it first comes from the frontline staff, ironically, some of the lowest-paid employees.
He employs a dedicated team of facilitators to help frontline staff on their value stream mapping—a lean manufacturing technique used to analyze and design the flow of materials and information required to, in this case, provide a variety of healthcare services.
"We have dedicated facilitators, but we believe that you have to get the front line staff directly involved," he says. "So what we have done is provide backfill staff so that we're not decimating the front line when we're asking them to pull out to get into the value stream mapping world."
This exercise ensures that a lot of high-cost steps get analyzed and retuned, but it's only part of the equation of re-engineering processes so that they are more efficient. With the help of the facilitators, Mission Health employees and facilitators also do an experience map at the same time, which requires following patients and caregivers through their entire encounter with the health system, and takes measurements of what patients and caregivers are feeling about the value of certain tasks.
That's where the "shadow" comes in: shadowing patient and caregiver experiences in such a painstaking manner is necessary for effective re-engineering.
At Mission, this observation and re-engineering work is taking place both in the emergency department and the OR, in time-consuming engagements that trace the patient's experiences throughout the entire continuum of their care.
All of this effort stems from the quality team, which includes performance engineers.
If all of this sounds like a lot of work that's outside the traditional scope of providing healthcare services, Paulus concedes that point. But he counters that this is what's required to orient the system toward a future in which only value will be rewarded.
"Outside of patient safety and our patient safety event mapping algorithm, this is the number one priority, because it's getting into how you fundamentally redesign the care process."
Outside of demonstrating value, this kind of work has dramatic potential applications in right-sizing potential capital projects. For example, Mission Health sees more than a 102,000 ED visits annually with 54 beds.
"We probably should have 85 beds, but we can't have 85 beds unless we build something," he says. "So this is to try to maximize the efficiency and to provide learning insight into what the building should look like once we have the ability to do the optimal design."
And to design optimal care processes, he adds. But does this painstaking work result in cost reduction? Many CEOs argue that they've seen many benefits from such re-engineering engagements—except cost reduction.
"It's too early in this experience, but I've done this before and have gotten costs down," says the former chief innovation officer at Geisinger Health System, who built his reputation as a leader on such work at Geisinger, which has been modeled around the country.
The key is going in with a cost target. "I've arbitrarily said we've got to get at least 15% of the cost down in every redesign," he says.
There are two ways to get at that cost, he adds. One is in the marginal costs associated with the care of any given patient. If you eliminate a step, that removes some level of cost. But often, you're still stuck with the fixed cost.
To attack the fixed costs, you increase throughput in the same fixed cost structure. For example, Paulus thinks there's room to see 115 patients through the ED where there once was room for only 102.
Philip Betbeze is the senior leadership editor at HealthLeaders.