Making a business case for
process improvement
Overview
Andrew Quanbeck, M.S.
NIATx 200 Scientific Manager
About me
• Previous experience
• NIATx 200
• Business case research
Overview
•
•
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NIATx Fundamentals – 20 minutes
Case studies – 20 minutes
Business case framework – 20 minutes
What keeps you up at night? – 15 minutes
Remember yesterday…
Our Rotary Phone
• Program to Treatment
– One size for all
– Right treatment at right time for each
• Belief to Science
– Experience and tradition
– Peer reviewed, controlled studies
• Human Service to Health
– Social supports and change
– Restoration to well being
• Grant to reimbursement
– Charity
– Earned income
Statistics
• 19 million Americans
need treatment
• 25% are able to
access treatment
• 50% of those in
treatment do not
complete
• The way services are
delivered is a barrier
to both access and
retention
Why Process Improvement?
• Customers are served by processes.
• 85 percent of customer related problems
are caused by organizational processes.
• To better serve customers,
organizations
must improve processes.
Why Organizational Change?
• Addiction is a population health issue
• To serve a population we must organize
resources
• Well intentioned clinicians and
practitioners working in isolation cannot
solve addiction
•
A Framework for Change
Five Principles
• Understand and Involve the Customer
• Focus on the Key Problems
• Pick a Powerful Change Leader
• Get Ideas from Outside the Organization
• Do Rapid-Cycle Testing
1. Understand & Involve the
Customer
• Most important of the Five Principles
• What is it like to be a customer?
• Walk-through, focus groups…
Why Walk-through?
• The walk-through is useful for:
– Understanding the customer and organizational
processes
– Providing a new perspective
• Allowing us to ‘feel’ what it’s like
• Letting us see the process for what it is
– Seeking out and identifying real problems
– Generating ideas for improvement
– Asking why?…and why? again
2. Focus on Key Problems
• What keeps the CEO awake at night?
• What processes have been identified
by staff and customers as barriers to
excellent service?
Examples of Key Problems
• Excessive paperwork
• Initial and ongoing client noshows for services
• Length of the intake process
• Creating successful handoffs
across levels of care
• Improving financial solvency
• Staff turnover
• Tailored treatment
Executive Sponsor Role
• Visionary
– Link to a strategic plan
– Set a clear aim
• Engagement
– Support the change leader
– Periodically attend change team meetings
– Personally invite change team participants
• Leadership
– Remove barriers
– Connect the dots
– Communicate
3. Select a Powerful Change
Leader
Who has:
– Influence, respect and authority across
levels of the organization
– A direct line to the CEO
– Empathy for the staff
– Time devoted to leading change projects
Leadership Characteristics
Overall Perspective
Top Five Mentions - Overall
Challenges status quo
Results verifiable by data
Is persistent
Is respected
Focuses team on objectives.
0%
5%
10%
15%
20%
25%
Change Leader Characteristic Survey
29 Categories, 99 responses - Change leaders (n = 40)/Executive sponsors (n=20)/Change
teams members (n=39)
30%
35%
40%
45%
Change Team Responsibilities
• Regular meetings
• Ensure accountability
• Identify potential solutions using PI tools
– Nominal group technique
– Flowcharting
4. Seek Ideas Outside the
Organization and the Field
• Provides a new way to look at the
problem
• Real creativity in problem solving comes
from looking beyond the familiar
Examples of Outside Ideas
•
•
•
•
Airlines (Southwest, Delta, Midwest)
Airline pilots
Hy-Vee
Etc.
5. Do Rapid Cycle Testing
Start by asking three questions:
1. What are we trying to accomplish?
2. How will we know the change is an
improvement?
3. What changes can we test that will result
in an improvement?
Model for Improvement
Reference: Langley, Nolan, Nolan, Norman, & Provost. The Improvement Guide, San
Francisco, Jossey-Bass Publishers, 1996
Before Starting the Change
• Collect baseline data
• Determine the target population and location
• Establish a clear aim
Make Changes
• PDSA Cycles
–
–
–
–
Plan the change
Do the plan
Study the results
Act on the new knowledge
• Adapt
• Adopt
• Abandon
• Rapid-cycle changes
should be doable in two
weeks
Change Cycles
A P
S D
Hunches
Theories
Ideas
Changes That
Result in
Improvement
A P
S D
Reference: Langley, Nolan, Nolan, Norman, &
Provost. The Improvement Guide
NIATx Aims
•
•
•
•
•
Reduce waiting time
Reduce no-shows
Increase admissions
Increase continuation
Key: waiting time = waste
Schematic: show rate vs waiting time
1
0.9
0.8
Show rate
0.7
0.6
0.5
Show rate
0.4
0.3
0.2
0.1
0
0
5
10
15
20
Days w aiting
25
30
35
A note on measurement…
Recap- two things you should do if
you haven’t done so already
• Start tracking first request for service
• Do a walkthrough
Provider case examples….
•
•
•
•
•
•
Acadia Hosptial
Perinatal Treatment Services
Prairie Ridge
Kentucky River Community Care
Addiction Resource Center
Adcare
Open Access to IOP- Acadia
Hospital Bangor, Maine
• Clients who fit clinical profile over phone or
at local ED offered an evaluation the
following morning at 7:30 a.m.
• All evaluated clients invited to start program
the same day
IMMEDIATE RESULTS
• Time between initial contact and screening
dropped from 16 days to 1.3 days
• More people were screened the first week
than in the entire previous month
Results
Open access has resulted in continued
growth in the number of admissions
(project implemented in March 2003)
72
70
68/mth
60
50
40
43/mth
30
28/mth
20
10
16/mth
0
FY02
FY03
FY04
FY05
FY06
Project #1 – Operating Results
We serve more clients and the program
operates more efficiently
Persons Served in IOP
$300,000
1000
$150,000
800
804
600
0
-$75,000
336
FY03
FY02
-$150,000
192
FY02
$75,000
$0
516
400
200
$208,639
$225,000
FY04
FY05 (annualized
from 5/05)
-$225,000
FY03
FY04
-$139,346
-$202,611
Outpatient Substance Abuse Services Net Profit or Loss
Perinatal Treatment Services
• Problem: long-term residential treatment
program was only four months into the
fiscal year with a net loss of $140,000,
60% continuation rate through the first
four units of service, and occupancy
rates below 50%
• Goal: Increase continuation
• Strategy: seeing the program through
the eyes of the customer
Walkthrough experience
• Impersonal admission process (done in
public area, took two hours, interrupted
several times)
• Changes: greeting customer by name,
assigning peer mentors, giving bravery
awards, creating private admission office
PTS Improvements
PTS Seattle: Continuation & Targeted Discharges
(Grant began September 2003)
Continuation: 4 Units of Service
(Targeted) Discharge Rate: ATA, Disciplinary
100
90
80
Percent
70
60
50
40
30
20
10
0
2003
2004
2005
2006
Business Case
PTS Seattle: Revenue and Occupancy Rate
(Grant began September 2003)
120
120
100
100
80
80
60
60
40
40
20
20
0
0
Sum Fall Win Spr Sum Fall Win Spr Sum Fall Win Spr Sum Fall Win Spr
2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2004 2005 2005 2005 2005 2006
Percent
(Thousand US $)
Monthly Revenue (Thousand US $)
Monthly Occupancy Rates (%)
Prairie Ridge Addiction Treatment
Services
• Problem: no increases in state or
federal appropriations for eight straight
years, with ever-rising costs
• Goal: Increase admissions
• Strategy: focus on increasing admission
among the 40% of clients who are feefor-service
Doing more with current
resources
• Found capacity by driving out
inefficiency
• Outpatient direct service rates have
gone from 40% pre-NIATx to 53% postNIATx
• Effective increase of 3.12 new FTEs
40% solution
• Pre-NIATx, variable and flat growth of third
party, Medicaid, and client fees:
– 3rd Party – FY- 04 - $290,888
FY- 06 - $507,852
Medicaid - FY- 04 - $203,471
FY- 06 - $276,801
Client Fee - FY- 04 - $132,834
FY- 04 - $223,714
Other benefits
• Improvements in staff retention and
morale
• State eventually offered contract
incentives in response to long-term
performance
Kentucky River Community
Care
• Grant funded, indigent populations
• Applied PI approach to issue of staff
retention (staff can be viewed as
customers too)
• Baseline six-month retention rate: 40%
Kentucky River Community
Care
• Approach: walkthrough as a new staff
member
• Ideas: learn from another program with
good staff retention (benchmarking)
• Results: new orientation and training
procedures yield 90%+ staff retention after
six months
• PI is part of job description
Addiction Resource Center – Brunswick Maine
Wait Times Are Down 77% From Baseline
14
12
10
8
Wait Time OP
Wait Time IOP
6
4
2
No
v
Fe
M b
ar
ch
Ap
ril
M
ay
Ju
ne
Ju
A u ly
gu
s
Se t
pt
.
O
ct
.
No
v
De
c
Ja
n
Fe
b
0
Monthly Average
Addiction Resource Center - Maine
IOP Volume Is Up 150% Over Baseline
2006 & 2007 Volumes - ARC IOP
MCH Benchmark = 188 units
404
372
376
334
269
320
325
305
297
275
250
199
184
188
128
257
120
e
rch
Av
era
g
07
Ma
Fe
b
rua
ry
ry
nu
a
Ja
be
r
er
mb
De
ce
m
r
No
ve
Oc
t ob
e
r
be
pt e
m
gu
st
Se
Au
ly
Ju
ne
Ju
y
Ma
ril
Ap
rch
Ma
No
ve
mb
er
0
Addiction Resource Ctr Business Case
Medicaid Net is up 53% Over Baseline 3’rd
Party and Private Net Is Up 50% Over Baseline
Net Revenue
100000
80000
Medicaid
60000
3'rd Party and
Private
40000
20000
0
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2006 2006 2006 2006 2007 2007 2007
Decrease Dependence on Grant
Revenues
• Through using the basic principles of
NIATx the Addiction Resource Center has
been able to decrease the overall % the
substance abuse dept is underwritten by
State grants from 71% in 2007 to 46% by
July 1, 2008 (grant amounts have
remained flat for 5 years).
CASE STUDY: ADCARE
OUTPATIENT SERVICES of
WORCESTER
Support for This Project Was Provided by NIATx
Through a Grant From the National Institute on Drug
Abuse.
Introduced OPEN ACCESS
Pre
Open Access
Wait Time Ave
7.65/days
Show Rates Ave 63%
Post
Open Access
1.1/days
85%
Increase in volume of Assessments: 36%
AFTER OPEN ACCESS
• Increased admissions by 36%.
– But we discovered that 35% did not show for their first session post
assessment.
– Some of our assessments required a higher level of care.
– Many of our assessments presented with increased medical and
psychiatric co-morbidities.
QUANTIFY THE GAINS #1
• Let’s say the increased admissions are
25/month and that the admission
assessment results in average revenue of
$65.00.
• New revenues/month are 25 x $65 =
$1625. For a year 12 months x $1625 =
$19,500.
• AND 300 more people being assessed for
treatment. (25 people x 12 months)
OPPORTUNITY - To
Re-engage Clients in
Therapeutic Services.
• Created an enhanced tracking system for
no shows post assessment.
• Trained staff to monitor system.
• Assessor made outreach call within 72 hrs
when client failed to show for 1st treatment
session.
RESULTS!!!!
•Re-engaged
75%
of clients that failed to
make first appointment.
Business Case And/or Strategic
Advantage for the Organization
# Assessments # No Follow Up # Re Captured
September
192
67
50
175
October
192
67
50
175
November
184
64
48
168
Total Recaptured
Total recaptured units
149
2535
QUANTIFY THE GAINS # 2
• At Adcare, 149 people re-engaged in three
months, resulting in 2535 more units of
service during that quarter.
• Let’s say the average reimbursement/unit
of service is $20.
• At $20/unit of service, new revenue is
$50,700. ($20 x 2535 units = $50,700)
• AND 149 more people were able to stay in
treatment.
Recap- case studies
• Providers realized:
– Financial improvements
– Strategic advantage
– Improved staff turnover / morale
• More info: www.niatx.net “Business Case
Series” and “Provider Toolkit”
Business Case – the Sixth
Principle?
• What is it like to be a customer?
• What keeps the CEO up at night?
• The key to sustainability
Business Case – the Sixth
Principle
• Economics really do drive an organization’s
ability to offer services and the State’s ability to
pay for services
• A positive economic position is a better leverage
point for clinical and/or organizational change
• Programs that drain resources from the
organization/State are rarely expanded – they
also have more difficulty attracting staff
Econ 101
Supply (inefficiency
present)
Price
Supply (equilibrium)
c
Demand
Quantity
The way it should be…
Client 1
Client 2
Client 3
Client 4
Client 5
Client 6
Client 7
Client 8
Client 9
Client 10
First Request
x
x
x
x
x
x
x
x
x
x
Assessment
x
x
x
x
x
x
x
x
x
x
Admission (1st Tx)
x
x
x
x
x
x
x
x
x
x
2nd Tx
x
x
x
x
x
x
x
x
x
x
3rd Tx
x
x
x
x
x
x
x
x
x
x
4th Tx
x
x
x
x
x
x
x
x
x
x
…the way it is.
Client 1
Client 2
Client 3
Client 4
Client 5
Client 6
Client 7
Client 8
Client 9
Client 10
First Request
x
x
x
x
x
x
x
x
x
x
Assessment
x
Admission (1st Tx)
2nd Tx
3rd Tx
4th Tx
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Calculating the financial impact of a
change
• Simple is better – use averages such as
average revenue per statistic or average
cost per unit of service.
• Average revenue per statistic = the total
program revenue divided by the program
statistic (number of units of service)
• Cost “savings” need to be translated to
client care gains.
What if more people come, but no
one can pay?
• It is possible to target one payer group, but
we have learned over and over again that
if you open access, it will help people in
every payer class equally.
Many clients pay something!
• 43.9% of clients paid a portion of the charge for
their treatment
• 52.9% used two or more sources of payment
- NSDUH 2006
What is it like to be the
government?
Prioritized motives
Limited Resources
Public justification
Public safety/benefit
Spending the public’s money well and
being able to explain how you know it
is a great communication tool
• Many of those who make important
decisions about how substance abuse
treatment and mental health care get
funded don’t really know what we do.
Business principles like efficiency, cost
reduction, improved productivity, and
improved outcomes are a common
language.
Key Business Case ideas
• Improved performance can lead to an improved
bottom line AND improved client outcomes
• Staff retention and morale seem to improve in
organizations where staff are excited and involved
• Business principles are a good communication
tool and provide us a way to advocate for our work
and therefore, our clients
• The PI model can be applied to virtually any
process that is important to organizational function
(e.g., staff turnover)
Resources
• ACTION Campaign II (sign up at
www.niatx.net)
• NIATx Business Case Series and NIATx
Business Case Calculator
“Adopt the new
philosophy. We
are in a new
economic age.”
- W. Edwards
Deming
Workshop this afternoon
• What is the best way to schedule clients?
Acknowledgments
• Funding provided by the National Institute
on Drug Abuse
• Thanks to Lynn Madden, NIATx coach and
frequent collaborator
Discussion question: What
is keeping you up at night?