Caldwell Memorial Hospital’s supply chain was struggling, as many hospital operations do, with multiple stock locations, excess and often incorrect inventory, and low accountability for what was on the shelves.
So the hospital’s leaders took action, and their successful initiative provides several steps that other providers may want to consider, too.
#1 Use Lean thinking
Caldwell leaders looked to their prior experience with Lean management tools to guide their efforts in the supply chain. A value stream assessment helped them pinpoint specific challenges, while data collection and analysis helped them develop a strategic plan for tackling them. This critical prep work revealed several key areas of focus: inventory visibility, demand flow optimization and management of physician preference items.
#2 Get visual
First up: inventory visibility and demand flow optimization. By introducing a new, Lean-based visual replenishment system, Caldwell gained the transparency needed to consolidate supplies, eliminate excess inventory and lower distribution costs. Plus, clinicians no longer had to spend valuable time managing supplies when they should be with patients. The combined annual savings from these initial activities totaled more than $3 million.
#3 Reign in requests
Next on the list: physician preference items. From supplies to lab resources to room and board, no two Caldwell physicians seemed to utilize assets in quite the same way. And these variations were adding up.
Digging into and analyzing resource usage data allowed Caldwell to break down the costs by clinician, case and location. This revealed just how much the inconsistency was costing the hospital — more than $4 million — and what Caldwell needed to do to convert those costs into cost-saving opportunities.
If you’d like more information on how this hospital achieved its remarkable result, please reach out to us.You can also read the full case study here.
An efficient revenue cycle has always been an important factor in the success of a healthcare organization. But in today’s complex and dynamic industry, where value-based reimbursement models are becoming the norm, streamlining the flow of money from payers to providers may be more important than ever.
That streamlining is just what Mountain States Health Alliance (MSHA) accomplished. Faced with looming financial challenges, leaders at this Tennessee health system sought a way to reduce expenses, and withstand financial pitfalls for the long term.
By implementing a Lean revenue cycle management (RCM) process, MSHA:
How did do they do it?
MHSA leaders did it through improved communication, transparency and consistency among departments, and the adoption of Lean tools for continuous process improvement.
Since RCM affects every patient in every department, MSHA had to tear down the walls separating the front end (scheduling, registration, financial counseling), the middle (medical records, coding, billing) and the back end (claim drop, liability, accounts receivable).
Daily huddles brought staff members together to discuss key metrics and share information. Progress was tracked on daily improvement boards that were visible to anyone. And Rapid Improvement Events helped staff members get a handle on the interconnectedness of their work, which in turn helped them identify redundancies, reduce variation and waste, and create standards of work.
And the results speak for themselves.
If you’d like more information on how the health system achieved this remarkable result, please reach out to us via our value-based care resource page.