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Katrein Aßmann
Bert Hoffmann
“This project shows once again that
substantial positive effects can not only
be achieved for the service providers but
that the application of lean methodology
can optimize resources successfully inthe administration of hospitals, too.”
Every Day Counts –
Effects Caused by Applying Lean Administrationto Hospitals
Key data BGU Ludwigshafen
The BGU Ludwigshafen is a tertiary care
hospital with 440 beds. It is operated
by the Heidelberg Association for
Therapy and Treatment under the
German Employer’s Liability Insurance
Association. This registered society
joined the Clinic Association of statutory
accident insurance (KUV) in September
2011. The nation-wide merger of the
operators of nine Trauma centers and
two hospitals for occupational diseases
as well as the operator of the statutory
accident insurance providers in the KUV
takes account of increasing economic
pressure and competition. The KUV now
represents facilities with revenue of
some one billion euros that are medically
and economically of major importance
in special treatment sectors. More than100.000 patients are treated as
inpatients and more than 300.000 as
outpatients every year ¹.
The BGU Ludwigshafen is specialized
in inpatient as well as in outpatient care
of emergency trauma cases. 31.000
surgical procedures were carried out
and 21.500 injured patients were treated
as outpatients in 2010. The annual
report states 11.516 fully inpatient cases
for 2010 ².
The BGU Ludwigshafen is not only a
centre for traumatology. It acts as a
service provider with proven expertise
in the whole rehabilitation process for
statutory accident insurers as well ³.
Initial Situation
Five employees were trained as Lean
project managers and seven employees
were trained as project staff in
Lean Management at the Stryker
LeanAcademy in May 2011. The Stryker
LeanAcademy was founded in 2006
by Dr. med. Hank Schiffers and is
specialized in Lean Management
solutions in the health care sector as
well as in the cross-functional training of
hospital staff. A so-called value stream
team, comprising employees along the
whole process of accounting, was put
together for this training. This team
comprised employees of the interfaces:
ward, pharmacy, doctors, organization
controlling, controlling, IT, laboratory
as well as from the divisions: Admission
of patients, medical controlling,performance accounting and financial
accounting.
The approach according to the Lean
methodology was largely unknown
territory for project team members.
For many team members it was the first
time working together on a problem
consequently with colleagues of
different occupational background and
across divisions.
Lean Methodology
The Lean methodology was developed
in the 1950s by Toyota to optimize
processes in the automotive industry.
Essential approaches include process
Results
• Cash flow increased by €2 million
• Discharge to invoice reduced by
11 days (statutory health insurance)
and 12 days (private health insurance),
respectively
• Quality of invoices, measured by
queries resulting in corrected
invoices, kept constant
• Cash outstanding improved by 50 %
• Response- and wait times decreased
in the overall documentation, coding
and settlement processes
• Predictability of human and financialresources significantly improved
• Implementation of internal lean
projects reduces cost-intensive
external consulting
Authors
Ursula Lang**, Katrein Aßmann*,
Sabine Frank**, Bert Hoffmann*,Dr. med. Hank Schiffers, MBA,
Alexander Conz, MD, MBA
* Stryker GmbH & Co.KG,
* * BG-Unfallklinik Ludwigshafen
Christoph Bendick
Commercial Director since Oct. 2011
“I am especially impressed that this
project is not only the achievement of
physicians, the nursing department or the
administration. The collaboration of staff
across all departments has made thisproject a success. I would not have
thought these results to be possible.”
¹,², ³ cf. Annual Report 2011
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optimization in small, quick steps
implemented by the local employees
and the consideration of all processes
from the customers perspective. To
this end, the individual process steps
are analyzed in a structured way and
divided into value-added and non-value-
added activities.
This approach and staff training in
theory and practice based on a
specific project is a major investment
in building internal expertise in process
optimization.
Ursula Lang
Head of Department of
Patient Services and Finances
“The project was great fun. We had
some really tough wrestle. At the
beginning of the project, I could not
imagine achieving such sustainable
and significant results with the Lean
methodology. The approach to
reorganization and the plurality of
the project team have made this result
possible.”
By the follow-up project and an on-site
coaching led by Mrs. Assmann theefficiency could be increased significantly
within the first five months. Initial
expectations were exceeded by far.
Summary of Project Achievements
The project team started with the overall
analysis of the process from patient
admission to treatment and discharge
through to payment. Approximately 50 %
of all hospital cases were analyzed.
The goal was to reduce the effort for the
billing process as well as the amount of
outstanding invoices in order to minimize
the time between patient discharge and
billing, as well as the optimization of
payment receipt. The date of the
invoice is here defined by the dispatch
of the bill by the hospital to the
Insurance company.
After careful analysis, the following
actions were identified and successfully
implemented from July / August:
• Installation of a work cell to ensure the
prompt and competent processing of
individual invoices as One Piece flow.
Waiting times between the individual
steps are thus reduced by up to 50%
or avoided completely.
• Introduction of a fast path, a so-called
Easy Track, for simple cases
resulting in a significant reduction
of process time.
• The coordination effort and the waiting
time of the remaining cases were
significantly reduced.
Discharge to invoice
reduced by
100
90
80
70
60
50
40
30
20
10
0ø 2010 Oct. 2011
Index
Secondary Process Indicators
Process quality
Percent invoice rework
Throughput
Internal approval time
Cost
Invoicing meetingtarget corridor
Impact on Cash flow
2010 Oct. 2011
Index
100
+2 mio €
Legend
no change improved massive ly improved
100
43,8
56,2
Dr. med. Hank Schiffers, MBA
“I planned this project in close collaboration with the management of the German
BG-Unfallklinik Ludwigshafen in the beginning of 2011. We initiated and accompanied
it to show, due to the expected financial success, that Lean Administration is the
second pillar of Lean Hospital. I congratulate the project team for their excellent
results. It prooves again true; No money – no mission”
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• Optimization of the interface
communication to ensure the
uninterrupted processing, the
so-called flowing system, of billing
cases. On the one hand, this was
achieved by improved organizational
processes instead of optimizing
sectors. On the other hand, the
colleagues trained each other and
developed clearly defined
responsibilities (job enrichment),
ensuring a clear and competent
substitution in case of illness or
vacation in order to ascertain
continuous work flow.
• Systematization and structuring of the
suppliers in terms of transfer of billing
data and documentation.
Measurable Success
Significant improvements have been
achieved in accounting. Since
September, the period from discharging
until invoicing, which was identified
as key performance indicator, shows a
good and stable course below the
target value. The development of the
secondary control parameters is
positive, as well.
The overall development of the financialsituation is significantly positive,
showing an increase of 2 million € in
Cashflow with the resulting positive
impact on interest rates, liquidity, etc.
Stabilization and Optimization
of Operational and Organizational
Processes
The optimization phase was followed by
the stabilization phase. By streamlining
the process, now less rework and
search effort have to be conducted. The
introduction of the work cell and the
learning achievements of the staff in
Lean methodology changed the whole
cooperation process. It changed the
employees view of the functions and
divisions as well as the process-oriented
cooperation.
The project team agreed upon a regular
reporting and meetings to review the
project results in the further course.
A process owner was named, who will
be responsible for the continuous andsustainable development of the entire
billing process in the future and who will
be in charge of convoking staff meetings
in case of changes in order to discuss
further problem-solving approaches.
Sabine Frank
Head of Patient Guidance Department,
Provisional Head of Medical Controlling
Department
“None of the participating colleaguescould probably have imagined the
significance of the “accounting process”
before beginning the project. Nobody
could imagine how complex this process
would be. Due to the nature of this
project work, the process was visualized
quickly and vividly depicted. The
participants quickly realized that every
step in the value stream can intervene in
the operations of the predecessor or
successor, and that these processes can
be influenced.”
The Next Steps
The enormous success of the project in
the accounting helped us to the detect
additional optimization potentials and to
use them.
Thus, the project team is able to ensure
the sustainability of the implemented
improvements and to focus on the
process stages of invoicing through to
the receipt of payment on the basis ofbest practice approaches.
VALUE STREAM – OVERVIEW
admissionadmission
diagnosis
preliminary
insuranceapproval
data /
validation
plausibility
checkapproval discharge invoicing
receipt of
payment
The entire process of accounting includes all areas from admission to payment reception