Leading Your Organization to Reap the Benefits of 6 Sigma

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6 Sigma WCBF 03-04-05 Leading Your Org to Reap the Benefits of 6 Sigma WCBF Conference 4 March 2005

Transcript of Leading Your Organization to Reap the Benefits of 6 Sigma

Page 1: Leading Your Organization to Reap the Benefits of 6 Sigma

6 Sigma WCBF 03-04-05

Leading Your Org to Reap the Benefits of 6 Sigma

WCBF Conference

4 March 2005

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Who is VMS? What do we do?

Why 6σ?

6σ deployment

Successes

Lessons Learned

Next Steps

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Highmark, Inc., d.b.a. Veritus Medicare Services {VMS}

Medicare Part A Fiscal Intermediary Processed over 7.6 million claims/yr Distributed over $6 billion to providers Service 1,500 providers

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SettlementFinance

ReimbursementBene/Provider Srvc

QAClaims

MSPInfo Sys

MRAudit

Client SrvcAppeals

VMS

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VMS QA

ISO 9001:2000 certified Internal Controls {FMEA} Compliance Quality improvement Quality control

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Who is VMS? What do we do?Who is VMS? What do we do?

Why 6σ?

66σ deploymentσ deployment

SuccessesSuccesses

Lessons LearnedLessons Learned

Next StepsNext Steps

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Highmark Values

United in Our Mission Dedicated to Excellence Committed to Integrity Focused on our Customers, Employees and

Communities

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ISO QM Underlying Principles

Customer focus Leadership Involvement of people Process approach System approach to mgmt

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ISO QM Underlying Principles {Con’t}

Continual improvement Factual approach to decision making Mutually beneficial supplier relationships

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6 Sigma Values

Improve business performance Improve quality & customer satisfaction Measure output Measure inputs Reduce defects Improve processes

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Developing & Reinforcing Values

Values define attitudes Attitudes influence behavior Behavior creates culture Culture reinforces values

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Rationale ISO § 5 Management responsibility

§5.1.c Top mgmt shall provide evidence of its commitment to the development and implementation of the QMS and continually improving its effectiveness by ensuring that quality objectives are established.

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Rationale ISO §8 Measurement, analysis and improvement

§8.1 General §8.2 Monitoring and measurement §8.3 Control of nonconforming product/service §8.4 Analysis of data §8.5 Improvement

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VMS QMS

Quality Objectives {Top Down}

Process Orientation

Results Orientation

Continuous Improvement Activities{Quality Objectives Bottom-up}

Establish measures of the QMSperformance {6 Sigma}

Quality Policy

We believe quality is striving to continuously exceed the performance requirements of our customers. To accomplish this we will:

Strive to continuously understand the dynamic expectations of our customersChallenge management and staff to proactively use facts and data to achieve a VMS environment of continual improvementSafeguard program fundsAdminister our Medicare contract in a responsible and cost effective mannerImprove efficiency while maximizing performance

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What do you measure now? What numbers get the most attention in your area? What measurements do you have?

Do they have a customer focus? Do they have a quality focus? Do they have an input/output focus?

How do you use these measures? What improvement goals are established?

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The Role of Leadership on Metrics

•New Questions

•New Measures•New Values

•New Behaviors

Same Questions Same Answers

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Why 6σ & Why Now?

To deal with a world of declining budgets

To compete successfully with the best companies

To accelerate the rate of improvement in quality and productivity faster than our competitors

To establish standard business language and approaches across functions

To generate budget to support other strategic initiatives

To increase predictability thereby reducing risk

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Who is VMS? What do we do?Who is VMS? What do we do?

Why 6Why 6σ?σ?

6σ deployment

SuccessesSuccesses

Lessons LearnedLessons Learned

Next StepsNext Steps

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Sr Mgmt Ownership is Key Link 6 Sigma to the business strategy Create the vision for the organization Set stretch goals & metrics to focus effort on 6

Sigma quality Select the Best People with the right structure Ask questions that generate new thinking on

quality and productivity

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How does 6 Sigma Work?Systematic method of breakthrough improvements across all business

functions:

Sr Mgmt established vision, challenge and objectives Champions/process leaders provide focus, leadership and commitment 6 Sigma Champion selects key improvement projects, tracks and quantifies

results Resources lead and perform improvement efforts Projects focus on customer satisfaction and real business problems Project Teams deploy 6 Sigma in their functional organizations Focus on solutions to real business problems

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6 Sigma Deployment Plan

Vision & Business Plan Metrics, Goals & Objectives Roles, Responsibilities & Structure Reward & Recognition Process Data Collection & Analysis System Project Selection & Review Process Project Back-log List 6 Sigma Reporting Process Communication Process

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What is Common Among Successful Interventions Top mgmt with a clear vision Imaginative local line leaders

“We have rarely seen any successful change initiatives that did not involve imaginative committed local line leaders.”

Peter Senge, The Dance of Change

Internal transformation “We know of no company that has generated significant

momentum in profound change efforts without involving active, internal networks of practitioners, people sharing progress and helping one another.”

Ibid

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Successful Interventions: Address real work goals and processes Improve performance Involve people who have the power to take action Balance action and reflection, connect inquiry and

experimentation Provide an opportunity to reflect and think Increase participant’s individual and collective capacity Focus on experiential learning

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Who is VMS? What do we do?Who is VMS? What do we do?

Why 6Why 6σ?σ?

66σ deploymentσ deployment

Successes

Lessons LearnedLessons Learned

Next StepsNext Steps

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Successes

Quality Reviews Sigma Level Credit Balance

Voice of the customer Process improvement

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Provider Enrollment

SettlementBene/Provider Srvc

MSPClaims

MRAudit

VMS Quality Reviews

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Settlement

Reimbursement

MR

VMS 6σ levels

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Reimbursement Interim Rate Setting SNFs

80

85

90

95

100

105

110

10/1/01 to9/30/02

10/1/02 to9/30/03

10/1/03 to09/30/04

10/1/04 to12/31/04

Percentile

104% Upper Threshold

86% Lower Threshold

Reimbursement Yield – 97.54% 3.4σ

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Reimbursement Interim Rate Setting Hospitals

90

95

100

105

10/1/01 to9/30/02

10/1/02 to9/30/03

10/1/03 to09/30/04

10/1/04 to12/31/04

Percentile

102% Upper Threshold

96% Lower Threshold

Reimbursement Yield – 99.99% - 5.2σ

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Credit Balance

All providers participating in the Medicare program are to complete a Medicare Credit Balance Report {CMS-838} to help insure that monies owed to Medicare are repaid in a timely manner.

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Credit Balance

A credit balance is an improper or excess payment made to a provider as the result of patient billing or claims processing errors

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Credit Balance Examples of Medicare credit balances include instances

where a provider is: Paid twice for the same service either by Medicare or by

Medicare and another insurer; Paid for services planned but not performed or for non-covered

services; Overpaid because of errors made in calculating beneficiary

deductible and/or coinsurance amounts; or A hospital that bills and is paid for outpatient services included

in a beneficiary’s inpatient claim

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Credit Balance Voice of the customer

Verify that a check should be submitted. No adjustment or cancel was submitted prior to

ID MSP by #2 in the 838 Report Submit cancel or adjust. Should be an appeal. We

have to override Reiterate what is included on a credit balance

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Credit Balance Process improvements

If adjustments are not on line, claims were returned Review of HICNO’s downstream in the process Install controls upstream in the process

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Who is VMS? What do we do?Who is VMS? What do we do?

Why 6Why 6σ?σ?

66σ deploymentσ deployment

SuccessesSuccesses

Lessons Learned

Next StepsNext Steps

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Lessons Learned

Communicate, Communicate, Communicate Data acquisition is never easy ID of the hidden factory is key 6σ = Excitement

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Who is VMS? What do we do?Who is VMS? What do we do?

Why 6Why 6σ?σ?

66σ deploymentσ deployment

SuccessesSuccesses

Lessons LearnedLessons Learned

Next Steps

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Next Steps

Continue to count defects Attain ASQ 6σ CSSBB designation Continue to facilitate Determine 6σ level for Org Communicate, Communicate, Communicate

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Next Steps {Con’t}

3 Sigma 4 Sigma 5 Sigma 6 Sigma

Design WallBasic Tool Wall

Seven Basic Quality ToolsISO/TR 10017

Statistical ToolsToImprove Processes

Green Belts Black Belts

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Questions?

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Thank You!