Tools for Achieving
Operational Excellence in
Healthcare Organizations
Presented by
Kevin Gilson, Associate Consultant
Theseus Professional Services, LLC
http://www.theseuspro.com
at the LifeSpan Annual Conference
May 10, 2007
Agenda
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Introduction
What is Operational Excellence?
What can Operational Excellence
contribute to your organization?
MBNQ Program criteria as a tool for
achieving Operational Excellence
Case Studies
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Introduction
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Why should you be interested in
operational excellence or performance
excellence?
What’s in it for You?
What is the current trend in health care
quality programs?
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In 1998 the Milbank Memorial
Fund asked:
 Why has health care lagged behind other sectors of
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the economy in quality improvement?
Why have clinical quality improvement efforts
apparently failed to move the sector quality?
How do we enlist physicians and other health
professionals to work on meaningful improvements in
the quality of health care?
How will changes in the expectations and behavior of
consumers and patients affect quality?
What will be required to transform health care into a
sector capable of delivering quality care and
constantly improving care?
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Is it Complicated?
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Applies to everyone regardless of size
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Its not rocket science
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Large multi-facility organization
30 bed facility
6 bed facility
Doesn’t come from a planet far, far away
Is either free or materials cost under $10
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Health Care’s Challenges
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Your organizations are facing:
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Demands for higher levels of quality
Escalating costs
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More expensive procedures and medications
More debilitating disease conditions
Constraints on reimbursements by CMS, Medicare, Medicaid
and payers - trying to hold the line on cost
Regulatory issues from CMS, states and payers
Marketplace challenges - increased competition
Challenges are getting more complex
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Case Study - Client
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Consultation: Write a Quality Plan to
implement Continual Quality Improvement
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What we did:
Developed method for conducting an assessment
 Assessed organization
 Identified strengths and opportunities for
improvement (OFI)
 Suggested next steps
 Jointly developed a Plan with management input
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Case Study - Client
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What we found:
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Organization - 250 full-time personnel
Financial reporting comprehensive
Key business processes not known
Absence of key process metrics
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“Gut feel” was predominant metric
Some customer survey information
No basis for CQI - problem areas unknown
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Case Study - Client
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What they need to do:
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Understand key processes and programs
Develop metrics and goals
Manage this data to identify CQI opportunities
Quality Councils - upper and middle management
 Data display for decision-making
 Implement a Corrective Action process
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Teams to implement CQI
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Variability - the Enemy
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What is Variability?
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Dr. Deming: Constancy of Purpose
Characteristics:
Differences among people
 Differences among patients or clients
 Differences in the way the same service is
rendered by the same or different people
 Differences in the way relatives or concerned
parties perceive service delivery
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Variability and Healthcare
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Care is great - but only on day shift
This home is great - but the last one…..
The person who answers the phone in the
afternoon has answers
We want nurse “X” to work with our mother
Are broken processes responsible
for this variability?
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Aspects of Variability
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Variability:
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Costs money
Expends time (hidden costs)
Ineffective health care delivery
Patient safety issues
Can result in costly recoveries from errors
 Extended stays in higher level of care
 Lawsuits or mediation
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Definition of Operational
(Performance) Excellence
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No one definition
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Consultants usually define OE in terms of
their consulting philosophy
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Six Sigma, TQM, Lean, Toyota Production System
Baldrige National Quality Program
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Health Care Criteria for Performance
Excellence
Used by the Maryland Performance
Excellence Award program
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Components of OE
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OE emphasizes:
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Process
Systems thinking or perspective
 Patient-focused excellence
 Valuing staff and partners input
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Results
Managing by fact
 Focus on the future - agility
 Visionary leadership
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Evaluating OE
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Baldrige (MBNQA) components
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Leadership
Strategic Planning
Focus on Patients, Other Customers, and Markets
Measurement, Analysis and Knowledge Management
Workforce Focus
Process Management
Results
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MBNQA
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Leadership
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Visionary leadership
How senior leaders guide and sustain your
organization - create sustainability
 Organizational governance - vision and values
 Create and promote a culture of patient safety
 Communicate organizational performance with a
focus on action - performance measures
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Governance and social responsibility
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MBNQA
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Strategic Planning
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Strategy development
What is your process?
 What are your Key Strategic Objectives?
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Strategy deployment
Action plans
 Key performance measures/indicators
 Actions based on reviews and fact
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“Act on Fact”
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MBNQA
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Focus on Patients, Other Customers, and
Markets
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Determine requirements, needs, expectations
and preferences of customers
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Voice of the customer
Current health care service needs
Customer satisfaction and loyalty
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Case Study - VoC
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Assessment of needs
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All stakeholders have:
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Requirements - what must occur
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Needs - would be nice if it occurs
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Desires of patient or other customers
Expectations - unexpressed requirements
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Regulations - CMS, state, local jurisdiction
Medical requirements for the best quality of life
Patient/family requirements
Failure to deliver on expectations = requirement failure
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Case Study - VoC
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Gathering requirements, needs,
expectations
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Mom is in your care
Daughter lives in Iowa and is a senior citizen
Neither has really thought through the issues
of Mom in assisted living
Limited resources
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Voice of Customer
Category
Patient (Mom)
Relative
(Daughter)
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Requirements
Needs
Expectations
Medication
Comfort
Mobility
Physical Therapy
Diet
Environment
Patient Safety
Activity
Personal Care
Take care of Mom
Visit Mom
Environment
Control expenses
Comfort
Personal Care
Limited visits
Crisis notification
Information
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MBNQA
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Measurement, Analysis and Knowledge
Management
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Performance measurement
Performance analysis, review and
improvement
Management of information resources
Data, information and knowledge
management
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MBNQA
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Workforce Focus
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Workforce enrichment
Workforce and leader development
Workforce capability and capacity
Workforce climate
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MBNQA
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Process Management
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Design of work systems
Core competencies
 Work process design with patient safety view
 Emergency readiness
 Systems thinking point of view
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Work process management
Work process improvement (CQI)
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Case Study - SSM
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SSM Healthcare System
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First health care organization to receive a site
visit in the MBNQA program
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Started CQI program in large multi-state health
care system in 1990
Established focus on management process
redesign to achieve bottom-line results
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Focus on process from customer viewpoint
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85% of breakdowns are poorly designed processes
15% are people issues
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Case Study - SSM
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Two important views:
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System thinking
Application of the MBNQA criteria
Writing the application
 Feedback from Examiners
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First recognition
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1999 Missouri Quality Award
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Case Study - SSM
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Systems Thinking - 5 principles
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Openness - behavior of living systems can only be
understood in the context of their environment
Purposefulness - why do people do what they do?
Multidimensionality - complementary relationship
between parts
Emergent property - success, failure as measures
Counterintuitiveness - actions may produce an
undesired and opposite result
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MBNQA
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Results
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Health care outcomes
Patient and other customer outcomes
Financial and market outcomes
Workforce-focused outcomes
Process effectiveness outcomes
Leadership outcomes
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Case Studies
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One assisted living applicant in 2006
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Household of Angels Assisted Living
MPEA application was used to help the
organization focus on quality improvement
 Awarded Certificate for application
 Plans on continuing to utilize MPEA and Examiner
feedback to focus improvement efforts
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Tools of Operational Excellence
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Malcom Baldrige National Quality Program
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http://www.quality.nist.gov
Download free criteria and survey
Goal QPC Memory Joggers
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http://www.goalqpc.com
Under $10 Memory Joggers for:
Quality tools - Memory Jogger II
 The Team Memory Jogger
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More Tools
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Maryland Performance Excellence Award
Program (MPEA) http://www.mpea.umd.edu
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Inexpensive workshops on creating an application
and using the criteria
Examiner training program - free
Annual celebration
American Society for Quality, Baltimore
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http://www.asqbaltimore.org or www.asq.org
Local quality experts, monthly meetings
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References
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Developing a Quality Management System, American
Health Care Association, 2005
Improving Health Care, Case Studies from Leading
Practitioners, GOAL QPC, 2006
CQI and the Renovation of an American Health Care
System, Ryan and Thomson, ASQ Press, 1998
The Nun and the Bureaucrat, Savary and CrawfordMason, CC-M Publications, 2006 (also a DVD)
www.managementwisdom.com
Medical Quality Management Sourcebook, 2000
Edition, Faulkner and Gray, 1999
System Thinking, Managing Chaos and Complexity,
J. Gharajedaghi, Butterworth Heinemann, 2006
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IOM Conference
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IOM Forum on the Science of Healthcare Quality
Improvement and Implementation: Implementation
Science Methods Workshop, 24-25 May 2007, Irvine,
California.
(http://www.iom.edu/CMS/3809/38607/39184.aspx).
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Topics for discussion include:
1. What methods should be used to research quality improvement
in health care?
2. What, as shown through research, are reliable quality
improvement strategies that can be spread now?
3. What lessons can be leveraged from other industries?
4. How can we address barriers to various research methods,
such as funding, ethics, and publication?
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In Conclusion
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Thank you for considering looking at your
organization through the lens of Organizational
Excellence
Apply for the Maryland Performance Excellence
Award
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Application writing workshop May 22nd
Questions?
Look for this presentation on these websites:
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http://www.asqbaltimore.org
http://www.theseuspro.com
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Backup Material
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Components of OE
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Core values and concepts (MBNQA)
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Visionary leadership
Patient-focused excellence
Organizational and personal learning
Valuing staff and partners
Agility
Focus on the future
Managing for innovation
Management by fact
Social responsibility and community health
Focus on results and creating value
Systems perspective
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