"Tools to Help You Achieve a Higher Say/Do Ratio" Using Dashboards to Measure and Improve Service Levels, Cost per Case, and Supply Expense Metrics 3rd

"Tools to Help You Achieve a Higher Say/Do Ratio"

Using Dashboards to Measure and Improve Service Levels, Cost per Case, and Supply Expense Metrics

3rd Party Decision Support to Manage Information on Physician Preference Items to Drive Decisions

Alignment with Internal and External Benchmarks to Target and Reduce Costs

“It is not the strongest of the

species that survives, nor the most

intelligent, but the one most responsive to change.” —Charles Darwin

“Without being disrespectful, I consider the U.S. healthcare delivery

system the largest cottage industry in the world. There are virtually no performance

measurements and no standards. Trying to measure

performance … is the next revolution in healthcare.”Richard Huber, former CEO, Aetna

““Some grocery Some grocery stores have better stores have better

technology than our technology than our hospitals and hospitals and

clinics.”clinics.” —Tommy Thompson, former —Tommy Thompson, former

HHS SecretaryHHS Secretary

Source: Special Report on technology in healthcare, Source: Special Report on technology in healthcare, U.S. News & World ReportU.S. News & World Report

Four key concepts can help business leaders move away from prediction and guesswork and toward continuous adaptation

— and without risking sudden organizational upheaval.

Adaptation

Business Behaviors Need to Change

Even in the face of such volatility, some companies continue to prosper. What’s their secret? Increasingly, they have one characteristic in common: They have developed the capacity to respond to change. In fact, they are systematically adaptive in their infrastructures, processes and mind-sets. Consider these examples:

Our Business EnvironmentChange and Adaptation is Required

Dell Computer leverages an adaptive supply chain to lower fixed costs while responding to and profiting from increases in demand — maintaining its position as a leading PC maker in the process.

GE Capital creates or sells off business units based on market conditions, incubating new units until they reach a minimum profit threshold.

Wal-Mart has built a private exchange for tier-one suppliers to exchange real-time information about sales within each store worldwide, enabling greater transparency and responsiveness.

Nokia has created an internal division whose mission is to facilitate business opportunities among company divisions and partners, unlocking value in the extended supply chain.

Why Measure?

To:• Identify ways to improve• Cause Change• Track performance

improvements• Focus efforts on “right

things”• Communicate strategies

and direction• Recognize/ reward

Not to:• Threaten

• Inhibit change

• Reduce risk-taking

• Make comparisons between like units

• Protect one’s backside

© N³

Measure the “right things”

Traditional Measurements

• Focus on costs and control

• Top-down driven (non-participative

• Perpetuates “turfism”

Desired Measurements• Effectiveness

– Doing the right things– Quit doing wrong things

• Efficiency• Support strategic initiatives• Simple• Involve employees in the

development• Reduces “turfism”

© N³

Measurements --#1 Critical Success Factor

You can get everything else right, but if you deploy a poor set of measures (or none at all), any positive change accomplished will soon be undermined by ineffectiveness and inefficiencies.

There is no more powerful means of communicating that things are going to be different from this point forward than to reshape what is being measured.

A goal-focused measurement system is the best vehicle for institutionalizing targeted changes in the management process and galvanizing management action.

Excerpts from “Better Change”

Price Warehouse

© N³

MEASUREMENTS

“The Purpose of collecting data is not to puteverything into neat figures, but to provide

abasis for action”

K. Ishikawa

“What gets measured gets done”

Tom Peters

“ Tell me how you measure me and I’ll tellyou how I’ll behave. If you measure me inan illogical fashion, do not complain about

illogical behavior”

Eliyashu M. GoldrattAuthor of “The Goal” © N³

MEASUREMENTS

“The Purpose of collecting data is not to puteverything into neat figures, but to provide

abasis for action”

K. Ishikawa

“What gets measured gets done”

Tom Peters

“ Tell me how you measure me and I’ll tellyou how I’ll behave. If you measure me inan illogical fashion, do not complain about

illogical behavior”

Eliyashu M. GoldrattAuthor of “The Goal” © N³

“Operations is policy.”—Fred Malek*

*Andy Pearson. Al McDonald. Jack Welch(?). U.S. Grant. Horatio Nelson.

“Execution is the job of the

business leader.” —Larry Bossidy & Ram Charan/

Execution: The Discipline of Getting Things Done

“Execution is a

systematic process of rigorously

discussing hows and whats, tenaciously following through, and ensuring

accountability.” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

SUPPLIES EXPENSE INFORMATICS

MODELEDUCATION OF

THE BOARD OF TRUSTEES

Resource Management UpdateMay 24, 2004

1. Recap of June 24,2002 Presentation2. Where we are NOW3. What are we doing about it

Aggregate NwH performance against the better performing hospitals for Total Supply Expense as a % of Net Patient Revenue :

FY 03 Requested $$ NWH performance is projected at 14.55%, versus the Better Performing Hospital’s 14% The potential annualized savings yield should be $ .879 million.

Aggregate NwH performance against better performing hospitals for Supply Expense per Adjusted Discharge (CMI Adjusted, including drugs) SEADC:

FY 03 Requested $$ NWH performance is projected at $787 versus the Better Performing Hospitals $750 per SEADC.

The potential annualized savings yield should be $ .95 million.

Top Level Supply Chain Performance IndicatorsJune 24, 2002

NWH Performance to Benchmarks

We are good, but we can improve

June 24, 2002

Use existing and new reporting tools for targeting and trendingExpanded Access/Training to Meditech Materials Management

Supplies expense by product by EOC trendingIdentify highest use/highest cost supplies determine if opportunities for cost reduction exist

COMPLETED

Review, track and report on existing and new cost reduction programs for expected performanceIMPLEMENTED

Embrace and report on Partners ContractingIMPLEMENTED

Value Analysis progresses to Supplies Formulary ProcessNOT IMPLEMENTED

What Do We Need to Do UPDATE 5.24.04

COMPLETED


Actual Performance, New Tools in Place

May 24, 2004

Source:

Supplies Expense as a % NPSR

Supplies Expense per Adjusted CMAD


OKAY, but A lot of Pick and Shovel Work RequiredNEED TO KEEP DIGGING

May 24,2004

Source

Major Expense Drivers Variance Analysis

FY 04 YTD Top 99 Items for Perioperative Services

35 pacemakers not planned21% growth in ortho implants

April 2004 Top 99 Items for Perioperative Services

No apparent dissonance on supplies consumptionTrend seems in line with activity

TSI puts OR supplies expense variance in perspective

Effective Product and Process StandardizationPHS/NWH (where applicable) and NWH

Effective Product and Process StandardizationPHS/NWH (where applicable) and NWH

Focus on effective process and product selection & utilization will generate the most sustainable opportunities for resource management.

Focus on effective process and product selection & utilization will generate the most sustainable opportunities for resource management.

Improve/Maintain Optimum Product Pricing thru Contracting with PHS

Improve/Maintain Optimum Product Pricing thru Contracting with PHS

Resource ManagementProgressive Processes (manage

concurrently)

Sustain the Gain (continuous measurement)

21

The Arms Race1950’s and 1960’s

Technology Arms Race 2004

NUTS AND BOLTS

85% of Non Salary Expense for a Nursing Unit is Supplies Expense

Supplies Expense Focus

Add a graph

Developing a Supplies Expense Metrics Tool

Review of 52 Supplies Expense EOCÕs

Breakout of Costs

Department Review of Trended Supply $$ Activity

Department Specific Trend Activity

Used My Supply Lines to Confirm Trend Across

THIRD PARTY DECISION SUPPORT CONSULTANTS

DATA MANAGERSNOT FOR PROFIT FIRMS

Capital Equipment Planning Requires Attention To Multiple Processes

Accenture Value:

• End-to-End Product Knowledge• Clinical Background & Experience• Relevant Peer Insights• Structured Approach• Credibility and National Perspective• Current Benchmarking for Equipment Pricing and Trends

Equipment Management

Forecasting

Cash FlowImprovement

IT

Research Best Pricing New Technology

Utilization “Actual Need versus Want”

Research Best Pricing New Technology

Utilization “Actual Need versus Want”

Integration Interfaces

Upgrades Information Flow

Integration Interfaces

Upgrades Information Flow

Accurate Budgets Appropriate Selection

Anticipated Repairs and Replacements

Acquisition Assistance Revenue Enhancement

Accurate Budgets Appropriate Selection

Anticipated Repairs and Replacements

Acquisition Assistance Revenue Enhancement

Time Scope

Resources

Transformation ContinuumTransformation Continuum

Process Technology

People

Long Range Planning Built on Productivity versus Reactive Fact Based Forecasting

50

51

Graphs of Quoted Prices and Discounts of comparable purchases.

5252

National Analysis by CategoryNational Analysis by Category

5353

Savings by SupplierSavings by Supplier

PERFORMANCE REPORTINGTHE GROUND TRUTH

Dashboard monitored daily; big leap above 50th percentile in courtesy of staff cleaning

November 2003 thru Dec 2003 performance on cleanliness has improved from the 23rd percentile to projected 40th percentile

December 2003 performance surpassed MA peer group mean in almost all categories; 1st time in Calendar 2003 standard room score was greater than the mean score. 31st percentile to >50th percentile movement

Transport Stats thru April 2004

Model assumes 465k cleanable square feet1,000 sq feet cleaned per productive hour for clinical space and 1,400 sq feet cleaned per productive hour for office space

62.62 Productive FTE’s Required (does not include 2.8 FTE’s for SSA)Using an 11% PET backfill calculation, FTE requirement is 69.51 +2.8 for SSA, this totals

Efficiency Model for Staffing Determination

ABC ModelActivity based model for staffing developed based on detailed analysis and requirements to establish and maintain a clean environmentSSA workload includedProductive FTE’s required total 72.53;

Using an 11% PET backfill calculation, the total FTE requirement is 80.5

Summary of ABC Model by Position

Bed Turnover

Housekeeping• Instant notification of

patient departure

• Visualization of entire

enterprise

• Fast means of tracking

workflow

• Easy view of staff

productivity

Top 2%:5%

Action OI data compares productivity of the 158 and 164 job codes (approx 45 FTE's would match their data)

Based on those two job codes, we are performing 50% better than top 25%ile. We are at 2.91 hrs per adj discharge, 25th%ile is 4.41 hrs per adj discharge.

Benchmarking Performance Action OI

Current FTE run rate is in the 90th percentile based on clinical activity

Real World Dashboard

GEMS 25

General Electric Company Confidential and Proprietary Information

Create a digital nervous system whereby information needed for business decisions is

available real-time and on-line. 3 CTQ’s

• Global Consistency• Weekly Rigor (Roadmap to be Daily)• Automated (Drill-down capability)How do we know if we’ve won?

• 3 Day Close!• One Set of Numbers• Operating Meetings Leverage the Web• Information Available on “Pull” Basis• People Like to be at Work

Decisions Made Easy

Mission & Deliverables

GEMS 25


ReportingPackages

Dashboards/Metrics

MyGEMS 25

Data Mining Alerts

Reporting

Analysis

Partnering & Decision Making

WHAT IF Wizards

E-T

rain

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, C

om

mu

nic

ati

on

, &

D

ocu

men

tati

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GEMS 25 Data mart Aggregated measures and hierarchies data

Measures Library Standardized definition of each measure

and library of business rules

The GEMS 25 Vision

Productivity

Process

Content

GEMS 25


To Webify or Not to Webify

“Quick Hit” approach -

Identify =>Webify=>Simplify

Why?• Fast communication• Peaks interest• Gen 1 easy to do• Creates High Level design upfront

Follow-on• Simplify some more• Automate ==> REAL-TIME• Add Drillable layers

What’s not Allowed:• Webify Gen 1 and walkaway• Webify with no Six Sigma Rigor• Launch with bad data

Change the Way We Think ... Launch & Learn

Easy Ease of Implementation HardLow

I

mp

act

on

GEM

S

Hig

h

• Quick Hit - Launch & Learn• Simplify and Automate• Each Metric has a Staff Sponsor

GEMS 25


9%

41%

7%

22%

11%

10%

General Accounting

Business PerformanceReporting

Accounts Payable

Business PerformanceAnalysis

Budgeting

Other

Staff Time Allocation By Category

Five Processes Account For 59% Of Total Finance FTEs

eFinance Transformation

68%

32%

DataCollection/Compiling

Analysis

29%

71%

Medical Systems’ Spends 70% of our Decision Support in Data Collection vs. AnalysisAllocation of Decision

Support timeTop DecileMedical Systems

GEMS 25 Enables:• Self Service and Drill Down Capability• Capacity for Value-added Analytical Activities • Finance to Become a Better Strategic Business

Partner

GEMS 25


GEMS IT Cockpit

Organization Needs Vary … Drive Culture

GEMS 25


GEMS Environmental Health & Safety Cockpit

Organization Needs Vary … Drive Culture

GEMS 25


Managing Information

How Can the Right Visibility Make You a More Successful Leader?

How will you lead your business?…the Ys

What are your critical few?…the Xs

Where do you get your data?…Operating Mechanisms

“The Web”, digital cockpit, Quickplace, email

When do you need it?…TimingDaily, Weekly, Monthly, Quarterly

GEMS 25


GEMS25 … enabling your future!

Forward Looking … Action Oriented …

Analytical Self-Service …

The Contemporary GE Leader

Imagine

Real-time monthly pro-forma for the year

Automated e-mail trigger for cost overruns

Predictive Orders and Sales

Spontaneous CSO notification for critical customers

GEMS 25


Observations/Learning's

• CEO needs to stay engaged throughout… “Joe looks at it”

• Need Strong Implementation Leader … Functional

• Identify Critical Few Metrics

• Balance Tops Down with Customer & Organization Input

• Over communicate … create a digitization Vision

• Spotlight leaders that are changing the way they work

• Data integrity is key but operational leaders need to own it

• Will probably take longer than planned… stay the course

Overcome Cultural Barriers with Consistent Commitment, Relevance &

Strong Leadership

April 19, 2023

Why are we doing all this stuff?

April 19, 2023

CMME

THE BURNING PLATFORMWHAT HAPPENS WITHOUT OUR INTERVENTION !!

$250

$260

$270

$280

$290

$300

$310

$320

$330

$340

$350

FY06 FY 07 Budget

FY 08Projection

FY 09Projection

FY 10Projection

($14)

($12)

($10)

($8)

($6)

($4)

($2)

$0

$2

$4

$6

$8

Total operating revenue

Total expenses

Operating margin

$5.38 Milion

MARGIN

$ 401k MARGIN

$ -5.27 Million MARGIN $ -11.72

Million MARGIN

$4.67 Million MARGIN

$$SCALE in MILLIONS

Assumptions

The BLUE Line displays the Operating Margin for each Fiscal YearRED Line is Expense GREEN Line is Revenue, After FY08 the RED line is Above the GREEN Line. Expenses are greater than Revenue = Burning Platform

•The incremental revenue from the 3 big Payors(Tufts, Harvard and Blue Cross) is $7 million less in FY08 than in FY 07

•Our Payor Mix is changing where more of our reimbursement will be paid at or below cost.

•Salary rates will still continue to increase due to labor shortages

Warming Smoldering Igniting Burning

April 19, 2023

CMME

$250

$260

$270

$280

$290

$300

$310

$320

$330

$340

$350

FY06 FY 07 Budget

FY 08Projection

FY 09Projection

FY 10Projection

Total operating revenue

Total expenses

$$SCALE in MILLIONS

Revenue and Expense Lines Intersect Negatively after FY 08




Assumptions



April 19, 2023

CMMEOperating Margin

($14)

($12)

($10)

($8)

($6)

($4)

($2)

$0

$2

$4

$6

$8

FY06 FY 07 Budget

FY 08Projection

FY 09Projection

FY 10Projection Operating margin

$5.38 Milion

MARGIN

$ 401k MARGIN

$ -5.27 Million MARGIN $ -11.72

Million MARGIN

$4.67 Million MARGIN

$$SCALE in MILLIONS





Assumptions


April 19, 2023

$0.00$5.59 $5.59 $5.59

$11.61 $11.61

$18.43

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

FY07 FY08 FY09 FY10

1st yr GAP 2nd yr GAP 3rd yr GAP 4th yr GAP

The “GAP” is sensitive to early action? The Cost Management/Margin Enhancement effort is aimed at early intervention. By achieving our annual margin targets we avoid the “compounding” effect.

CMME

The GAP progression withoutintervention

Documents

"Tools to Help You Achieve a Higher Say/Do Ratio" Using Dashboards to Measure and Improve Service Levels, Cost per Case, and Supply Expense Metrics 3rd