Are Your Quality Improvement Projects Saving You Money?

Are you tracking the costs of the processes at your site? Do you know how much your quality programs are costing you? They should be saving more than you spend. Unfortunately, few healthcare organizations or even manufacturers have their accounting set up to track costs for the many processes at their sites. Standard accounting procedures are good at tracking such things as expenses for supplies, for payroll and for accounts receivable. Unfortunately, accountants are not taught to track costs of processes such as delivering an annual physical exam by a primary care physician or the expense of getting a room at a hospital ready for the next patient. Accounting software such as Quickbooks has no provision for tracking such expenses.

Why am I asking if you track the costs of your processes, anyway? There are several reasons. First, even if you are a nonprofit, you cannot afford to provide quality healthcare at a loss indefinitely. I know that it seems the Federal government expects just that in Medicaid programs and seems to be heading in that direction with Medicare. Keeping track of your process costs will help you provide effective care at an overall profit if you use techniques such as value stream mapping.

Secondly, tracking costs with return on investments is the language of upper management. Management is more likely to continue support for a program or process if they can see a positive return on investment (ROI). If you can demonstrate a positive ROI through process accounting you will gain the confidence of management in your healthcare programs.

Further, by controlling costs or even by reducing costs, you can pass on some savings to your patients and clients. This makes you more competitive and creates client loyalty. I believe that the delivery of medical care will only become more competitive in the United States. Recently, President Bush signed an executive order that the Medicare system should make available cost and quality data of healthcare providers that provide Medicare services. Locally, our hospitals are advertising in order to compete in providing ER services. You have to be competitive; tracking quality and process costs will help a great deal.

What does it take to track quality and costs? Recently I was reading about a Six Sigma process improvement effort to decrease the time in order to make a hospital room available for the next patient. The article can be found on the iSixSigma website and is titled “Leverage Six Sigma to Improve Hospital Bed Availability.” Obviously, improving bed availability increases the income of a hospital. The key elements to track in making the bed available are ease and quickness of getting a physician discharge order, the time it takes to get the patient out of the room and to a discharge area, the time it takes to notify housekeeping to clean the room, and the actual time to clean the room and make it ready for the next patient. The time spent in the first three steps does not produce income; it is a cost. Hence, you need to quantify how much it is costing you now to get through these steps. You can rather easily find the costs of supplies and labor in the actual cleaning of the room. A process map will help you get a handle of these costs. The cost of the present state is your baseline.

Next you should work with a team whose representatives reflect the participants in the patient discharge process and any others who are invested in the process. The team should work on ways to shorten the time spent in getting the room ready and should set target benchmarks in terms of mean time with upper limits and standard deviations. For instance, how could you shorten the time it takes to get a physician discharge order? Could you arrange to have a hospitalist provide the order when the primary physician is not readily available? Once a new process is designed, implement it a trial program and track the cost basis. If the costs are significantly reduced, then standardize the process and maintain it with occasional sampling. Report the improved ROI to management.

Another area that could utilize this process is the billing cycle in the primary care physician setting. You should follow the paper and electronic trail of a patient bill; make a process map of the cycle. Be sure to include the costs of having to resubmit the bill to an insurance company if there is a billing error and to track the costs of failing to receive the full payment to which you believe you are entitled. Have as goals to completely eliminate rebilling because of errors and to consistently get the amount to which you are entitled.

I hope that I have convinced you that accounting for costs is as important as providing the best patient care that you can. I believe that every healthcare provider should not only concentrate on best practices, as is so often emphasized in today’s healthcare, but should also optimize ROI through process accounting and should concentrate on minimizing the time it takes to provide a service. If you can improve in all three of these areas, then all of the participants will be winners, both the patients and healthcare providers.

Article Source: http://www.content.onlypunjab.com

Donald Bryant helps healthcare providers meet their challenges and writes “Making Good Healthcare Better” a free monthly ezine for healthcare providers who want to dramatically improve patient health, improve the bottom line, and make work more rewarding, guaranteed. Go now to www.bryantsstatisticalconsulting.com to get a free article with tips you can use to start making improvements immediately and to learn more about Lean Healthcare

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