5th AnnualWCBF Six Sigma in Healthcare Conference

Keynote AddressMarch 29, 2007

Las Vegas, Nevada

Implementing Six Sigma in HealthcareSuccesses & Challenges

Glenn Fosdick, FACHEPresident and Chief Executive Officer

– Formed with the merger of Clarkson Hospital and UNMC’s University Hospital in 1997

– 690 Beds

– Tertiary/Quaternary Academic Medical Center• $550 million budget

• 22,000 inpatient discharges

• 132,000 patient days

• 445,000 outpatient visits

– Patients from all 50 states, 42 countries

– JD Power & Associates Distinguished Hospital

for Service Excellence (2005 & 2006)

– National reputation in Cancer Care, Transplantation

•Increasing quality expectations

•Declining Reimbursement

•Increasing demand

•Increasing costs

•Increasing competition

•Workforce shortages

•Consumerism

•Technology

•Physician reimbursement

Don’t bother if…

(1) Senior Leadership not truly committed

(2) Not willing to dedicate resources

(3) Not willing to adopt & integrate other tools &

methods

(4) Interest is in either a quick fix solution or financial

return only

The Chicken is supportive. The pig is committed.

•Board Involvement

•Consistency of Message

•Address the Naysayers

•Role in Project Selection & Belt Life Cycle

•Hold Sponsors Accountable

•Require leaders to demonstrate application of tools & methods

•Recognition

•December 2002: Initial training with GE Healthcare

•Today: Full-time Manager, 2 MBBs, and 6 BBs as part of

Quality Improvement Function

*Limited training of Green Belts

*Dedication of Top Talent

*Dual Track Program: Leadership Development & QI

Professional Tracks

•Internal candidates challenging to identify & recruit

•“Washouts” have occurred

Matt

OperationsManager,Dialysis

Six SigmaMaster

Black Belt

SelectionDevelopment

Re-Entry

Six SigmaBlack Belt

Dec ’02-Aug ‘03

Aug ‘03 – Aug ‘06Director,NeurologicalSciences

Aug ’06 – Present

“I’m thrilled with Matt’s development as a result of his Six SigmaAssignments. Matt was a talented manager before becoming a BB/MBB,yet his leadership skills grew significantly while serving as a BB/MBB.He has infused our Service line with his ability to make objective,data-driven decisions. Matt’s understanding of how to effectively use data hasearned the respect of physicians and enabled him to establish veryclear expectations for his staff.”

Deb Istas, Executive Director, Neurological Sciences Service Line

Lean Thinking•Critical to most project successes to date•Incorporated into all renovation & design work

Crew Resource Management•Team skills & decision making training adopted from aviation•Nearly 1000 OR, ED, Cath Lab, and EP lab staff & physicians trained thus far

•Good catches documented: wrong site surgery averted, antibiotics not started, potential mix up of two patients named Smith

Balanced Scorecard•Corporate & Director level developed thus far•Drive project identification and monitoring

Most attractive employer

Highest quality customer service &

care

Most attractive place to practice

medicine

Enhanced clinical quality & patient

safety

A culture of clinical, operational, & financial accountability

QUALITY

“A Strategic Separator”

Interest NotLimited to Financial Returns

Billing Satisfaction Surveys

Improvements Made Simplified Itemized Statements. Itemized Statements sent automatically. Completely Revised Patient Liability Statements Billing Web Pages and Improved Patient Education Materials

Billing Website595 Visits in 2005 (live 8/15/05) 607 Visits from Jan-March 2006

% Positive Responses

72%

77%

86% 87%89%

91%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

January2004

April2004

July2005

October2005

January2006

April2006

6Six Sigma

D M A I C

5 North Medication Admin Timeliness Project“The Power of Removing the Bin”

• DMAIC-Lean Projects Initiated to-date: 52– 11 New Projects Currently Being Scoped

• WorkOuts completed to-date: 168– 27 WorkOuts Underway

Project Financial Benefits(through 1/07)

Hard $To-date

Soft $To-date

$ 2.5 million $ 5.6 million

50%

60%70%

80%90%

100%

NMC is a goodplace to work

Proudlyrecommend for

healthcare

I am proud towork for NMC

2001 2002 2004 2006

GoodEmployee Opinion Survey

Employee Turnover25% Reduction from 2003 to 2006 (20.4% to 15.3%)

18,000

20,000

22,000

24,000

2002 2003 2004 2005 2006

Dis

char

ges

0.21

0.22

0.23

0.24

0.25

Mar

ket S

hare

# of Discharges % Market Share

GoodMarket Share & Pt Volume

Days of Cash on Hand

* Actual based on 5 months annualized.

0

10

20

30

40

50

60

70

80

90

100

110

120

Sep-01

Jan-02

May-02

Sep-02

Jan-03

May-03

Sep-03

Jan-04

May-04

Sep-04

Jan-05

May-05

Sep-05

Jan-06

May-06

Sep-06

0

10

20

30

40

50

60

70

80

90

100

110

120

Sep-01

Jan-02

May-02

Sep-02

Jan-03

May-03

Sep-03

Jan-04

May-04

Sep-04

Jan-05

May-05

Sep-05

Jan-06

May-06

Sep-06

0

15,000

30,000

45,000

60,000

2002 2003 2004 2005 2006 *2007

Budget Actual

Seven-fold increase since 2002

Net Income(in thousands)

* Actual based on 5 months annualized.

Alignment and focus of projects on most importantIssues. Project selection is a learned skill

Learning to move faster

Biting the bullet on difficult people

Belts returning to key leadership positions within theOrganization

Staying on message – this is not “a fad”

Convincing the skeptics

Commitment to improving the product