Management Engineering/ Process Improvement (ME/PI)

1. Management Engineering/ Process Improvement (ME/PI) “Provide Value”

2. What is a Management Engineer or Process Improvement (ME/PI) Professional? Process Improvement (PI) professionals address the design, installation, and improvement of integrated systems of people, material, facilities, information, equipment and energy. They bring a wide variety of work experience and educational backgrounds to the job.

3. Education • BS, Industrial Engineering, Management Engineering or Operations Research • MBA, MHA, MSIE, MS Operations Research or Health Systems • PhD, MBA, MHA, BSBA Business Management or initial clinical background such as RN, RHIA, RHIT • PhD, MHA, Allied Health Professionals with Business/Engineering minors • Six-Sigma, Lean, CPHIMS, CPHQ, and other certifications

4. Key Practice Skills Analytical - a solid knowledge and experience with: • quantitative statistical techniques and tools • process improvement programs (Lean, 6-Sigma, ….) • demand and supply forecasting • workload and schedule optimization • engineering economics, financial analysis and decision support • queuing theory • workflow analysis • simulation modeling • the quality process Formal Education

5. Key Practice Skills (continued) The ability to: • collaborative with people in complex organizations • manage the design and implementation of processes and systems • promote ideas and influence change in a organization • teach others the quality management problem solving tools • teach and deploy business improvement methods and tools Informal Education

6. Key Practice Skills (continued) Profound knowledge of: • JCAHO and other licensing standards • clinical protocols and clinical outcomes • hospital organization structure and interrelationships Healthcare Education

7. ME/PI Philosophy To provide value by: • Advancing a win-win culture • Promoting customer centric environment • Improving the system of production, service, and planning – Constantly! • Educating and transferring skills to departments to assist them to realize their full potential • Breaking down barriers between departments and becoming a catalyst for lasting improvements • Promoting continuous quality improvement

8. ME/PI ProfessionCurrent State

9. Current State • Responsibilities and accountabilities are not universally defined • Sometimes we’re “Jacks of all trades” • Reporting structure depends on the institution • Lack of direction • Skill set, education and training has not been standardized leading a broad arrays of professionals • No set continual education or certification • Prevalence of soft skills in the profession

10. Current State (cont.) • Career path is sometimes limited • In industry people with our skills are frequently brought into senior management • Seen as “cost” versus “revenue” departments • Savings multipliers not touted • Project benefits not advertised

11. ME/PIConcept Customer Performance Improvement Resource Management IT Engagement

12. ME/PIConcept Performance Improvement Function • Operational audits • Outcome measurements • Service quality audit and evaluations • Process identification, documentation and evaluation • Streamline or “tweak” existing processes • Design off current processes • Enhance value added activities • Modify existing systems • Conduct staff skill audits

13. ME/PIConcept Performance Improvement (cont.) • Identifying process and outcome measures • Performing quantitative and qualitative analysis • Aligning measures to meet organizational goals • Designing “Scorecards” • Evaluating system capacity • Establishing performance targets • Initiate DMAIC projects

14. ME/PIConcept Performance Improvement Tools • Root cause analysis • FMECA • DOE • Kanban • SPC/SQC • Performance Benchmarking • Poka-Yoka • Etc. • Department Functional Tree Structure • Process mapping and analysis • Value stream mapping • Simulation (Modeling) • 5 Ss • Kaizen • Lean • Six Sigma DMAIC(Define, Measure, Analyze, Improve, Control)

15. ME/PIConcept Performance Improvement Tools (Cont.) • Internal and External Benchmarking • Develop opportunity matrices based on current department performance • Utilizing Action OI Reports for operational benchmarking • Attending and facilitating departmental and interdepartmental meetings

16. ME/PIConcept Performance Improvement Tools (Cont.) • Operational Benchmark Indicators • Paid FTEs/Adjusted Occupied Bed • Paid Hours/Discharge • Management FTEs/Total FTEs • Department Paid Hours/Unit of Service Volume • Square Feet/Adjusted Discharge • Over Time as a % Percentage of Paid FTEs • Agency, Temp, Contract FTEs as a % of Total Paid FTEs • Adjusted Admission/Active Physician • Percent Occupancy • Surgery Suite Utilization

17. ME/PIConcept Performance Improvement Tools (Cont.) • Financial Benchmarks Indicators • Salary & Benefits as a % of Net Revenue • Labor Expense/Adjusted Discharge • Non-Labor Expense (Supply, Drug, etc.)/ Adjusted Discharge • Days in Accounts Receivable • Bad Debt Percentage • Revenue Per Adjusted Discharge

18. ME/PIConcept Performance Improvement Tools (Cont.) • Clinical Benchmarks Indicators • Case Mix Adjusted Average Length of Stay • Mortality • Tests per case per physician

19. Patient Treatment Concept Process HappyCustomer Input Staff Hours Supplies Equipment Voice of Process Voice of Customer

20. ME/PIConcept Resource Management Function • Service utilization evaluation • Supply standardization audit • Departmental staffing pattern audit and evaluation • Supply chain Management evaluation • Service utilization benchmarking

21. ME/PIConcept Resource Management Activities • Clinical Process outcome analysis • Clinical Process Benchmarking • Productivity Analysis • In-Quality Staffing • Physician Profiling • Cost Per Case • Supply Chain Management (SCM)

22. ME/PIConcept Productivity Measurement and Analysis • Measuring workload, identifying patterns and trends • Identifying labor utilization, by type and cost impact • Matching staffing to demand “In-Quality Staffing”

23. ME/PIConcept “In Quality” Staffing: Which customer(s) win? In Quality plus Process Improvement Time in Minutes USL LSL Number of Transports

24. ME/PIConcept Physician Practice Profiling • Reduce cost through reduction of unnecessary variation of utilization • Sharing information with providers (Value Added) • Select cost effective physicians • Improve patient outcomes

25. ME/PIConcept IT Engagement Function To ensure the success of IT ME/PI provides following support services; • Strategic Planning and strategic analysis • Needs Assessment • Assess current and emerging technology • Feasibility Study • Project Management • Cost and Benefit Analysis • Selection Criteria • Request for Proposal and/or Information • Selection of System • Vendor viability analysis

26. ME/PIConcept IT Engagement Tools • Process mapping (“As Is” and “Should Be”) • Gap analysis • System performance analysis • System reporting capability analysis • Project planning • Project management • Team and meeting facilitation • ROI calculation

27. ME/PIConcept ME/PI ProfessionIdeal Future State

28. ME/PIConcept Future State • Well defined roles and responsibilities within Healthcare • Operational guru • Starting point for all healthcare operational leaders • Training ground for healthcare COO, Department Directors and other healthcare operational leaders • Defined skill set for the entering to the profession

29. ME/PIConcept Future State(cont.) • Structured on the job training and licensure for promotion • At least 50% to 70% of ME staff to be trained engineers • Well developed on the job training program • Defined minimum performance criteria related to cost savings, revenue enhancement, and quality improvement (i.e. Minimum contribution factor to bottom line should be 3 to 5 times of ME department cost)

30. ME/PIConcept Questions ?