Embracing Operational Effectiveness to Drive Performance

Episode Overview:

During the past 18 months, hospitals and health systems have focused on reducing expense mostly through FTE attrition. Many health systems and hospitals are at a point where reducing costs cannot come from reducing FTEs but must occur from other places.

High-performing healthcare organizations have focused not only on reducing costs through minimizing inefficiencies but maximizing revenues as well. Developing a culture of continuous improvement allows the organization to not only meet its clinical and financial goals but exceed them. High-performing organizations accomplish this by implementing Lean methodologies to eliminate waste, operate more efficiently and increase clinical outcomes with patients.

In this episode of Value-Based Care Insights, Daniel J. Marino speaks to Kate Geick of Lumina Health Partners to discuss how operational effectiveness through staff engagement and commitment can yield improved operational and financial performance. Here are some key takeaways:

• You can have the best technology and technical solution, but without the role of people, you may not meet the outcomes you need. It is important to gain people's commitment and buy-in and have a positive culture and attitude in order to make any type of change. And not only that but to sustain them.
• When people think of return on investment (ROI), they often think of just financial. But it is equally important to think about the satisfaction of the clinical, non-clinical staff as well as the patients.
• Operational effectiveness may seem overwhelming – and leaders don’t know where to start. Starting with one small pilot may produce great value and result in process improvement, team engagement and positive financial performance.
• With operational effectiveness, it is important to stay patient. Changes don’t just happen overnight. Be clear with what you are measuring and be consistent with how often you review them and be able to pivot when you need to.

Transcript

Daniel Marino: Welcome to Value-Based Care Insights. I’m your host, Daniel Marino. In today’s episode, we have a great topic of discussion. It’s one that is gaining a lot of interest in hospitals and health systems. And that’s operational effectiveness.

Of course, as you know, we’ve talked about this time and time again in this program. We’ve really focused for many months to manage the COVID activities that were occurring within organizations. And really over the last probably six or nine months, it seems like not only have they been focusing on managing COVID, but they have also really been focusing more on managing the impacts from the pandemic. And some of those impacts relate to challenges with the workforce, or wage inflation, which is a big one right now. Others are trying to determine ways to reduce costs. And we can’t reduce costs by cutting FTEs. We can’t do that anymore. Many organizations went that route because they had to, especially when COVID was really a challenge. And a lot of our elective procedures were significantly scaled back.

But now as an industry, we find ourselves in a position where we’re really understaffed. So many organizations are trying to determine ways to create, let’s say, more efficiencies within their operations as a means of reducing costs. Or they’re trying to put in place some change management to get used to the new norm that, frankly, we’re seeing in all of our health care organizations — and really our health care industry.

So, I have a great guest today who has a tremendous amount of experience in operational effectiveness. Kate Geick is a certified black belt in Lean and Six Sigma. Kate has had a lot of experience in process improvement, change management, project management, and really working with organizations to help them think about how they can run their operations differently. Very excited to have her today. Kate, welcome to the program.

Kate Geick: Thank you, Dan. I feel like I’ve been part of the Lumina team for a long time following all the stuff coming out of Lumina Insights. So, I’m really excited to be part of it now.

Daniel Marino: Great. Well, thank you for joining us. Maybe we can start with kind of describing what operational effectiveness is. Many organizations are looking to this. And you know, I think it’s more than just a buzzword. I think it’s more than just a trend. It does have some real-life consequences and opportunities associated with it. Why don’t you describe for us what operational effectiveness is?

Kate Geick: I think a lot of organizations are starting to do components of this. And when you think about it, a lot of effort is going into collecting data and creating dashboards and reviewing them. But I think with operational effectiveness, it goes beyond just reviewing the data and creating large reports. I think it’s really putting all of our heads and hands together and figuring out how can we make these improvements in the area that they’re looking at — and then using lean methodologies and change management and getting the right people involved to activate those changes. And I think like you said before, cutting FTEs is just not going to do it anymore. And the staff are experiencing burnout and fatigue there, especially with a pandemic. They’re going above and beyond their jobs and doing a lot more hours than they’re used to doing, and if we can step in and make some processes more efficient, their lives are going to be so much easier, and their day-to-day work is going to be a lot more enjoyable. So, any type of waste we can reduce in their day-to-day processes is going to help them a lot and ultimately improve the quality of care for patients.

Daniel Marino: Absolutely. And, you know, there’s one thing I hear often from health care organizations when we’ve come in and we’ve done a lot of work over the years with improving, say, revenue cycle or helping to improve front-end operations in the clinic. One of the most common things I hear from folks when I ask them, “Well, why do you do it this way?” is, “That’s because this is the way we’ve always done it.” So, to kind of put it in new perspectives, saying, “Well, you know, maybe there’s a better way to do it” — I think that really lends itself to not only thinking about ways to become more efficient, but your outcomes have to be better, right?

Kate Geick: Yes. I think the thing with operational effectiveness is you really need to figure out what the goals are and what the timeline is. But ultimately, what’s the outcome that you’re looking for? Measuring that on a regular basis is important to see if you’re making improvements because sometimes you think something’s going to make improvements, and it just doesn’t. You really need to be patient, and things take time. So don’t give up; instead, pivot as you go. I think that’s really important.

Daniel Marino: Right? I agree. So, when you go into an organization or let’s say an organization is thinking about improving some of their processes — like making themselves more efficient — give some examples of where organizations may start or, maybe, where you’ve seen some real results in changing processes in certain departments or something like that.

Kate Geick: I think the biggest mistake people make now is, I mean, if you can identify areas that need help and improvement, it’s everything. And it’s just not possible to go after everything. And I think people really need to take a step back and figure out what is the scope, and then narrow it down to something really specific. And then set realistic goals. Because even if you look at emergency departments, and simply say, “We need to make our department better” or “We need to reduce the length of stay,” — that’s too broad. I think the biggest thing that I do is a value stream mapping exercise, where they can map out exactly from the beginning to the end who is involved and what actions or tasks are happening in every part of that process. And then we put on the red stickers and say, “These are the pain points. And this is where the waste happens. Let’s investigate a little bit more, and then attack that one at a time.”

Daniel Marino: So as an example, you brought up ED, maybe we can work through that for a few minutes. With the emergency department, I guess you’ve got a lot of influences there. Right? You have patients who are presenting themselves, so I would think triage would be a big part of that input. And the information you’re getting from patients, how you’re interacting with nurses, if there’s behavioral health in the ED—all of that would probably be a big influence on that. Using the ED example, talk a little bit about how operational effectiveness and some of the techniques that you just mentioned would come into play.

Kate Geick: For emergency departments, I’m seeing a lot of areas of improvement with admitted patients. I think when the decision is made to admit a patient for whatever reason—something where the length of stay is going to increase significantly—maybe bedsides are available, maybe there’s no space to put them in for surgeries. And I think where people make mistakes is that this is now going beyond the emergency department. So, we’re involving people now in the lab, radiology, the OR—you need to get the right people involved. And I think that is the most important thing that I can highlight here is that getting the right people involved, having that conversation, and doing the value stream mapping together as a team is really important. When you’re doing value stream mapping, do not make any assumptions. Make sure that it’s backed up by what’s happening in real life. I see all the time that people have standard operating procedures, where they have the process flow documented already. But then when I talk to people in real life, it’s a little bit different. And that can make a big difference. So sometimes I do value stream mapping based on what they’ve documented and then what’s happening in real life, because it could be very different. So, my advice here is to make sure you get the right people involved and really think about what’s happening now in real life, instead of making assumptions or using information that’s been documented in the past.

Daniel Marino: So as you’re talking about that, it sort of brings to mind what I’ve talked about for many, many years. And it’s the integration of people, processes and technology. So, as you start to think about how that comes together, you’re really leveraging all three of those areas to create some operational efficiencies. Talk a little bit in terms of how the data fits in. And I guess the other question I’m going to ask you is: How does culture fit into all of that?

Kate Geick: I think the first part with data is that people are collecting data constantly. Organizations are collecting data, constantly creating dashboards and doing analytics. But I think what people lack is doing proper benchmarks — and not only just national benchmarks but maybe also looking into other organizations that are similar to your organization. I think that’s where the gap is: People don’t really know how to start with comparing themselves with the right type of organization. Because if I’m (managing) a small hospital or an emergency department, maybe I can’t compare myself with the biggest emergency department in the United States. It’s a little bit different, right? Their staffing levels might be different, their experience is different, and their expertise and specialties might be different. So, I think that’s important. And you mentioned culture. For me, this is the most important thing. You can have the best technology and you can have the best technical solution, but without the role of people, you’re just not going to have a successful project. You’re not going to have the outcomes you need. You really need people’s commitment and buy-in and that positive culture and attitude in order to make any type of change. And not only to make changes but to also sustain them.

Daniel Marino: Right. So, the approaches you take for process improvement, and then combining that with the change management approaches, I think do a couple of things for you. Right? It probably gets people bought into what needs to occur and probably excited about it. But it also supports more of the long-term changes that are going to be required. And, you know, when you think about process improvement, it’s certainly not a start and stop, right? It’s a journey and it should be continuous, and it should be something that you kind of push yourself as an organization to get better in and to continuously achieve. I think, you know, certainly, those elements of change management become really critical in taking that approach and making sure that you’re continuously challenging yourself for improvement.

Kate Geick: I think with that part, what I want to talk about here a little bit is that often in an organization, decisions get made during C-suite meetings, board meetings, and when people in kind of higher positions get together and make these decisions. But at the end of the day, a lot of the activation is going to happen with frontline staff. Nurse managers are critical roles that have to be involved in the planning and decision making. Because I feel for these people. If I’m a nurse going into work, and all of a sudden somebody comes in and tells me to do something different — there’s no explanation as to why, there’s no explanation as to timeline or the impact this is going to make — it’s really important to get people involved in those conversations. And, yeah, I think this happens everywhere. And it’s such a problem.

Daniel Marino: Well, the more the people are involved, the more they’re going to be really bought into the process, and they’re going to own it. And I think you bring up a great point: This is their livelihood. And this is the way that they’ve done things for years and years and years. Frankly, they’re the experts in this area. So, if we’re going to be enhancing the clinical workflow process, whether it’s ED, or surgical or operations, you have to engage the right people at the right levels in order to drive a lot of the change.

Kate Geick: I feel like for operational effectiveness, I do agree that data is important. And using the lean tools and methodologies, that would be important. But I don’t want people to forget about the role of people. I think without the people, it’s just not possible.

Daniel Marino: Great point. So, let’s talk a little bit about outcomes. You know, you’ve been part of many projects before. With organizations who’ve moved forward with process improvement and put in place some operational effectiveness initiatives, what have you seen in terms of ROI or the financial impact to these organizations? Because at the end of the day, that’s an important piece of why we’re doing this.

Kate Geick: Right? I think the impact will be different, obviously, depending on what part of the hospital or the clinic or what department you’re looking at. So, if you’re looking at maybe periodic opportunities, it might be, you know, improving first case start times, getting more efficient on room turnaround times, or getting smart around scheduling. Maybe with ED it might be reducing length of stay for admitted patients. It could be anything. Just be really clear about your scope and what your benchmarks and your goals are. And then develop a realistic timeline of when you can start to see those improvements. I don’t want people to get discouraged when they’re not seeing improvements. Things take time. There are a lot of people involved. So, you know, be patient, be persistent, be excited and keep going.

Daniel Marino: As I mentioned in my opening comments, I’m hearing more and more organizations and operations folks really looking toward operational effectiveness as a way to, you know, reduce costs and maybe even improve their overall profitability. There have been three areas that have sort of come to the top as curious. To start, one you’ve been mentioning is ED improvements. That’s been a big one. Surgery efficiencies and certainly the OR and perioperative efficiencies is another big one, right? Because a large amount of the revenue coming through an organization occurs through the OR, and obviously that generates a lot of costs. So that, to me, is a really big area of focus. Plus, there are so many points of entry and individuals and departments involved that I think that would just be an area ripe for opportunity. And then the third I think would be the revenue cycle. You know, it just seems logical to me — for instance, the denial management process. Again, it’s just a great opportunity because it affects revenue, and it affects cost. Are you seeing the same thing as you’re talking to and working with organizations?

Kate Geick: I think, especially for the Lumina team, we’ve been doing a lot of work around the revenue cycle. And there are a lot of quick wins. And I think doing assessments is really quick, and you can quickly find that a lot of the low-hanging fruit are the quick wins. We’re seeing improvements in those areas fairly quickly compared to maybe some other, you know, initiatives that might take a lot more effort to see, to move the needle.

Daniel Marino: Right. And, you know, as you’re kind of talking about that, I had an opportunity to talk to one leader not too long ago, and it was a vice president of operations within this health system. And one of the things that she had said to me was, look, we are aspiring to become a high-performing organization. I would think as you’re starting to think about ways of improving your operations, benchmarking yourself, having the best possible clinical, financial, and operational outcomes that you can, that’s the path you have to take to becoming a high-performing organization.

Kate Geick: Obviously, quality of care and patient safety comes before everything else. But in terms of looking at different initiatives, it might be smart to prioritize areas where you’re losing a lot of money. Because that could be something that could be fixed quite quickly.

Daniel Marino: Right. So as organizations are thinking about this, especially some of our leaders, or listeners that are on the call here today, they may be thinking to themselves, “Wow, this sounds really good. I don’t believe I have the resources internally, or maybe I do.” Where would they start? Or where do they look to find resources to at least begin to kind of think about this as an opportunity for their organization?

Kate Geick: I think it’s important for health care organizations to build internal capabilities with Lean and change management. And I’m really happy to see that a lot of organizations actually have dedicated teams and expertise with Lean, but some of the organizations are not quite there yet. And if they don’t have the budget, or the time, or whatever it is to get to that place, start small, educate yourself, and do some research around what lean and change management is. Maybe practice with just small tools and see if that is a good place to start and get people involved. Maybe reward your top performers, and send them to training and get them more responsibilities beyond just doing patient care. Some people are really good at project management and change management, even though they’re clinical staff. So maybe identify your key players who would be interested and would be good at leading these initiatives, because without designating people who are championing this, it’s going to be really hard to make any type of change happen. And the sustainability part of it? It’s just not going to be easy.

Daniel Marino: I agree. And the key thing is you have to have some people, at least internally in the organization, who understand or have been trained in Lean and Six Sigma. I think you can bring in experts from the outside to lead the process. But at the end of the day, as we’ve talked about this, this has to be a philosophy of continuous improvement. You know, you’re building a culture of change around that continuous improvement. So, I would think investing in those resources internally would certainly pay some huge dividends. And then I can’t help but think the ROI that comes from these projects could be quite substantial.

Kate Geick: When people think of ROI, they think financial. But I think you might also want to think about how this is going to impact the satisfaction of the providers, the staff as well as the patients when things are going smoothly. You can feel it, you can see it, and I think the satisfaction will improve significantly as well.

Daniel Marino: I absolutely agree. OK, this is great. I really hope organizations give this some thought. You know, operational effectiveness appears to be a trend that is not going to slow down. But like with many other trends that occur in health care, the devil is in the details, and you really have to look at where in your organization that creating this level of operational efficiency makes the most sense. And really where it’s going to create probably the biggest financial as well as clinical outcome performance for your organization. In closing, any other final thoughts you may give to our listeners, especially for those that are considering this for their organization?

Kate Geick: Yeah, I think when we talk about operational effectiveness, it could sound pretty intense, could be kind of scary. And people might not know where to start. But start small. Any type of effort that goes into this will make an impact. Maybe try one small initiative, one pilot for one day, and see how that goes. So start small, and think about the sustainability part as well.

Daniel Marino: Yeah, great advice. Small and impactful. That’s what I say. OK, this was great. And I’m sure our listeners really appreciated this as much as I have. I would love to invite you back again, maybe we can take a deep dive on one or a few of these examples. I think it would provide some great education for our listeners.

Kate Geick: That sounds good. Thanks for having me, Dan.

Daniel Marino: Great. Thank you. So in closing, operational effectiveness is really picking up a lot of steam. But it is because it’s allowing health care organizations an opportunity to not just reduce cost, but to also make themselves perform better and really meet the needs of their patients, of their physicians and of their staff. And it hopefully provides a different opportunity to address some of these issues that we’re experiencing within our organizations. For more information on this topic today—or maybe if you wanted to reach out to Kate directly—her email address is kgeick@luminahp.com. We hope you enjoyed today’s episode. Thank you for listening, and until next time, I’m Daniel Marino.

About Value-Based Care Insights Podcast

Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners.