The healthcare industry is in the throes of multi-dimensional change. Declining reimbursement, competitive forces, disruptive technology, accountability for high quality clinical outcomes and stakeholder satisfaction, along with funding formula change and innovative financial sources require effective strategies to deal with these variables.
Pressures to do more with less, in the wake of limited resources point toward well-crafted strategic planning as a pivotal imperative to address this confluence of challenges.
One of the processes gaining traction for application to assist with these challenges in the healthcare industry is a philosophy known as Lean Six Sigma. The combination of these philosophies (i.e. Lean and Six Sigma) has its roots in industry.
Lean is linked to the evolution of process improvement at Toyota while Six Sigma developed at Motorola and General Electric. Lean Six Sigma is employed to reduce waste, improve efficiency and standardize work processes and materials to improve quality and optimize the return on investment (ROI) for resources used and services linked to an organization’s mission.
Lean Six Sigma
The American Society for Quality (ASQ) offers a widely accepted definition of the Lean and Six Sigma initiatives, which approach their common purpose from slightly different angles. Here’s how they compare:
|Waste reduction||Variation reduction|
|Using less technical tools such as kaizen, workplace organization and visual controls.||Using statistical data analysis, design of experiments and hypothesis tests.|
The combined construct of Lean Six Sigma has the following attributes:
- Recognizes the value of each initiative and tailors these elements, situationally, to the issue being studied.
- Forms a fact-based, data-driven philosophy of improvement that values defect prevention over defect detection.
- Catalyzes customer satisfaction and bottom-line results by reducing variation, waste, and cycle time.
- Promotes the use of work standardization and flow, thereby creating a competitive advantage.
- Applies anywhere that variation and waste exist, and every employee should be involved.
Strategic planning tools can be considered and in various feasibility determination and activation stages. A basic tool, SWOT Analysis (strengths, weaknesses, opportunities, and threats) analysis is a common starting point that helps identify internal strengths and weaknesses as well as external opportunities and threats. After an assessment (ideally from an internal bottom-up approach) identification and engagement of key stakeholders is refined.
One approach is that opportunities be identified for use as potential goals to be —established. Goals to be attained should be considered for depth and achievement with metrics to measure performance and outcomes. Opportunities for further improvement consideration in a Lean Six Sigma project can be considered from the internal weaknesses identified.
Priority should be given to weaknesses that affect Mission or and influence the greatest return on investment (ROI) opportunity. (Note: One of the pitfalls of Lean Six Sigma that individuals who are new to the process consider is that they take a problem that is too large to handle and manage concretely. The approach of an inch-wide mile deep is far more effective.)
-Dr. John D. (Jack) Rudnick, Jr., FACHE, holds a Master Black Belt in Lean Six Sigma. He is a professor in the Division of Business Administration and Accountancy at Thomas More College.