Pulmonary Associates Dramatically Increases Efficiency with Value Stream Mapping

Albert A. Rizzo, M.D., and Heinz J. Dommert, MBA, MS

Technology, depending on how it is used, is often credited with the success or failure of aspects of managing a physician’s practice. Although there is no doubt that technology plays an important role, each process in an office operation – billing, scheduling, handling phone calls, responding to consultations, etc – must be sound.

All too often the perception is that technology and processes are mutually exclusive. In order for technology to be utilized at peak performance the underlying process must be designed to match that technology. As part of the move into the world of electronic medical records, a whole new practice management system was recently implemented at Pulmonary Associates. As a result, the billing process that had been in place for years was faced with adapting to a new practice management system. The result was a new high-tech system being utilized in the tried and true old ways of doing things.

At about the same time, the Medical Society of Delaware Insurance Service (MSDIS) sponsored a seminar – provided by Delaware Manufacturing Extension Partnership (DEMEP) – for physician practice managers on “Lean for Healthcare Organizations.” Our practice managers at Pulmonary Associates were familiar with the concept of “Lean” as it related to efficiencies put in place in the automotive industry and decided it may have some merit in our situation.

In order to streamline the long-standing billing process with the new practice management system, Pulmonary Associates took advantage of the seminar and followed up with DEMEP to put Lean practices to work in the office. Under the direction of DEMEP, we decided to proceed with a Value Stream Mapping event to kick off the Lean journey.

The Value Stream Map resulted in the following efficiencies in the billing process (Actual results):
   • 26% decrease in the number of steps in the posting and billing process
   • 62% decrease in elapsed time (total time) from initial patient contact to collection for services
   • 315% increase in first time quality of submissions
   • Dramatic reduction in rework time for the billing and posting staff

OK, so what is a Value Stream Map?
A Value Stream Map provides a detailed picture of all processes in a Value Stream. It allows an organization to develop a clear vision of what it means to be Lean. In our case, Value Stream Mapping was a three-day event with the first half of day one being classroom education on Lean concepts, helping us to understand and identify the potential wastes within a process, and how to apply Lean tools to these processes. After the training, current state and future state maps can be generated. The result of the Value Stream Mapping exercises and subsequent review then act as a road map or plan for the organization’s improvement.

Pulmonary Associates decided we would benefit most by mapping our billing process. This begins with the time an initial appointment is scheduled until the bill is resolved and closed out We gathered a team to participate in the project. The team consisted of some physicians, staff (clerical, billing, medical assistant, medical records), office management staff, and our business manager and accountant. After the initial training, the mapping work began.

For the Current State Map, the team captured all the steps that occur within the entire process. They were shocked to see that it required 42 different steps from scheduling an appointment through closing out the paper work. For each step critical data was compiled; for instance, cycle time (how long it took to perform each step), total time (before moving to next step), first time quality, etc.

Once the data was added to the Current State Map, real analysis could begin. Waste was identified at each step and countermeasures were defined to reduce or eliminate that waste. The information from the Current State Map was used to define the Future State Map, which now represented the process with the waste removed. Once the waste was identified, new methods were put in place to eliminate them. Each team member brought expertise that proved invaluable to improving the process every step of the way. Everyone seemed to enjoy finding ways to eliminate pet peeves that made the job less pleasant. An action plan was created in consultation with the physician-owners and time lines for each improvement task were put into place. The key to success is the willingness of management to implement the defined action plan to achieve the Future State Map and realize the projected benefits. As you can see from the above statistics, the results were significant.

- This article appears with the permission of the Medical Society of Delaware.

Lean on Green

By Kelly Cofrancisco

From the private sector, to non-profits and the government, every organization is looking to streamline its processes these days. Not only can cutting waste and reducing inefficiencies lower costs, but it also can help a company become environmentally friendly.

Government, health care, manufacturing and service industries are all seeing the benefits of streamlining processes, says Steve Quindlen, executive director of the Delaware Manufacturing Extension Partnership (DEMEP). Streamlining can also affect the bottom line by speeding up revenue income.

Face the Inefficiencies
Over the past year, most organizations have downsized; lean and other ways of streamlining processes are a way to help alleviate the extra workload taken on by employees, says Quindlen. “If someone is retiring, companies are not going to replace them for cost reasons,” he says. “So how do you close the gap and still satisfy the customer?” To discover inefficiencies and reduce waste, Quindlen advises taking a close look at all the processes by which your business is run to discover value-added and non-value added processes. “Most of the time the owner or manager knows they have inefficiencies and they know they need to address them,” he says.

Sharon Ruth, a manager at Willis of Delaware, an insurance broker, says streamlining has helped her increase workflow. What once took up to nine days now only takes four. “We cut out processes that bogged down the system and were not necessary,” Ruth says, noting the company worked with DEMEP.

Ken Grant of Analtech, a manufacturer in Newark, says that going green used to be viewed as a burden, but since adopting the mindset that there is always room for improvement, the company discovered its inefficiencies through the lean process.

Analtech was able to reduce the work that normally took four people to only two people and expanded their product line while doing so. Throughout the process, Analtech was able to retain the same number of employees. The company’s largest savings came in May when it switched to a four-day work week.

Grant says less run time of the building’s heating and cooling system, as well as less time commuting, are just a few of the energy and money-saving benefits of having a four day work week.

“I don’t think that this would have ever been brought up unless we had done our lean journey,” admits Grant. Analtech took a hard look at the numbers and debated on whether it would affect their customers. Since May, the company has only seen positive effects.

The Delaware Department of Natural Resources and Environmental Control recently streamlined its permitting process for air permits. The process used to take 200 days and is now at 85 days.

Streamline Increases Bottom Line
Quindlen recommends calculating the time it takes your company to get from the beginning of a process to the end result. Think about what you can eliminate, and then put a value on that time. For example, if an employee is making five dollars an hour, and it takes them 30 minutes for a task, and you cut out that task, you can save $2.50.

Ruth says streamlining her workflow has also freed up an extra 15 to 20 percent of the company’s staff time. They were able to cut half a staff person, saving $12,000 to $15,000.

Facing Opposition
But making changes to an office culture can sometimes ruffle feathers. Ruth says that the change was not easy for her staff, although it was an easy sell to management. She recommends keeping up the momentum to stick with the new changes. Quindlen recommends involving the “do-ers,” meaning bringing all people associated with a certain process into the discussion about changing it. He confirms the end result of streamlining is a quicker process, more engaged and involved employees, better return-on-investment (ROI), and satisfied customers.

Analtech’s challenge was convincing some employees that change could be beneficial. “You had a core group here who felt like ‘Hey, we’ve been doing [the process] like this for this long, why change anything?’” says Grant. “As we started to take a hard look at the details, there were things that we could do differently.” After a thorough review of Analtech’s processes, production is up. Employees are spending less time setting up and tearing down and more time getting jobs completed. Now that the company has gone lean, the adversity to change is gone. Everyone in the company is looking for ways that they can work a little more efficiently. “It will be a while before we can do an analysis of how much energy we have actually saved, but we haven’t seen the downside yet,” he says.

Employee morale has definitely improved at Analtech, where Grant observes, “People are more refreshed on Monday morning, and their productivity is up since they know they have those four days to get the job done.”