This document discusses Lean, Six Sigma, and innovation in healthcare. It provides an overview of a program introducing Lean and Six Sigma concepts and tools. It then describes Loma Linda University Medical Center's initial journey in deploying Lean, including conducting a proof of concept project in the emergency room to reduce patients leaving without being seen. This led to improved outcomes and financial benefits. The presentation concludes by discussing the need for Lean, Six Sigma, and innovation given changes in the healthcare industry around reimbursement, quality, and integrated care delivery.

1. Lean, Six Sigma and Innovation:
Natural Companions
Ian R. Lazarus, FACHE
Richard Rawson, CHE
Glenn Crotty, Jr., MD
Mark Herzog, FACHE

2. We believe that healthcare leaders
should have all the tools they need
to excel in their mission.
Resource rich site at
www.creative-healthcare.com
2

3. Program Overview
• Introduction to Lean & Six Sigma
• One Hospital’s Initial Journey
• Proof of Concept Exercise
• Another System’s Success
• Taking the methods as far as they can go
3

4. Program Overview
• Proof of Concept Exercise
• Another System’s Success
About our audience….
About your handouts….
4

5. First, learn to tell a story…
5

6. 6

7. After shopping spree…compliments of Air France
7

8. Why improve processes
when you can simply apologize nonstop?
8

9. Better Idea: Learn to “Lean”
Accelerate the speed and reduce the cost of any
process by removing non-value-added activities
“Re-examine the way you think about waste, as it is often difficult to recognize.
Start by making waste obvious to everyone.”
Taiichi Ohno, Founder
Toyota Production System
9

10. 10

11. Better Idea: Learn to “Lean”
Accelerate the speed and reduce the cost of any
process by removing non-value-added activities
“Re-examine the way you think about waste, as it is often difficult to recognize.
Start by making waste obvious to everyone.”
Taiichi Ohno, Founder
Toyota Production System
11

12. Cost of Quality
Up to 40%
Productive
Quality
Adding
Features
• Preventing
problems
• Detecting and
correcting
problems before
the customer
sees them
• Dealing with
problems after
they occur
12

13. Eight Causes of Waste
Defective
Products/
Services
Over
Production
Excessive
Inventories
Excessive
Motion
Excessive
Processing
Transportation Waiting Underutilizing
Talent
13

14. PULL
PERFECTION
Principles of Lean Thinking
VALUE1.
VALUE STREAM2.
FLOW3.
4.
5.
13

15. Why is it so difficult to
expose waste?
Patient
Asks for
Information
Patient
Gets
Answer
PERCEIVED WAIT TIME
Patients over estimate their wait
time by 50% or more;
PERCEPTION IS REALITY
A B C D
ACTUAL WAIT TIME
Determined by the process to
retrieve information
15

16. Signs of
Non-Value Added Steps
• Large file areas and frequent archiving
• Waiting time and multiple handoffs
• Written correspondence required for the process to complete
• Multiple approvals
• Frequent rework
• Process is seen as complex (mystical)
• Procedures passed on by word of mouth, no SOP’s or SOP’s don’t reflect
actual process
16

17. VALUE-ADDED
• Alters the work
• Meets customer
wants or needs
• Is done right the first
time
NON-VALUE ADDED
• Eliminate it
• Consolidate it
• Automate it
Protocol to Eradicate Waste
16

18. Goal: “Perfection”
Patient
Asks for
Information
Patient
Gets
Answer
A B
ACTUAL & PERCEIVED WAIT TIME
Minimized by reducing waste
• When the value stream is transparent,
perfection can be obtained
– Culture Shift: Makes waste obvious!
18

19. Two Six Sigma “blackbelts” sitting at a bar...
19

20. Six Sigma is Process Improvement
Process
X1
X2
Y
X3
Process Input
Variables
Process Output
Variable
Customer
Requirements
In-Process
Variables
X1 X2 X3
X…n
Six Sigma focuses on the “critical X” that drives process performance
more than any other variable.
The aim of Six Sigma is to fix the problem “for the last time”
20

21. Six Sigma is Project Management
Who is the customer?
What do they want?
Is the data clean or dirty?
What is the baseline performance?
What is the project objective?
What are the various x’s?
What are the critical x’s?
What solutions will control the x’s?
What are the specs for the x’s?
What is the data integrity of x’s?
What is the capability of the x’s?
Can the improvement stand the test of time?
Y
x
Define
Measure
Analyze
Improve
Control
Describe
The customer
experience
Optimize
The customer
experience
21

22. Goal of Six Sigma
 Identify and eliminate NVA activity
 Identify and reduce variation
 Understand and optimize y = f (x1+x2+x3+….xn)
22

23. A “Six Sigma” Process
s s s s s s
LSL m
A six-sigma (6s) process
23
The distance between the mean
(m) and the inflection point is the
standard deviation (s).

24. System Performance
0
100
200
300
400
500
600
700
800
900
50.00% 60.00% 70.00% 80.00% 90.00%
(Utilization (Throughput / Max. Theoretical Throughput)
CycleTimeORWorkinProcess
Cycle time =
WIP
TH
What’s Going On Here?
Understanding The Role Of Variation In Process Performance
24

25. System Performance
0
100
200
300
400
500
600
700
800
900
50.00% 60.00% 70.00% 80.00% 90.00%
(Utilization (Throughput / Max. Theoretical Throughput)
CycleTimeORWorkinProcess
Cycle time =
WIP
TH
Impact
of variation
What’s Going On Here?
Understanding The Role Of Variation In Process Performance
25

26. Linking Lean and Six Sigma
• While Six Sigma will focus on the “critical few,” Lean
focuses on the “trivial many”
• Lean focuses on speed, efficiency, and waste
• Six Sigma focuses, defects, variation and quality of
products and processes
LEAN Six Sigma
Six SigmaLEAN
Either method provides a prescriptive approach
to performance improvement
26

27. USLLSL
Center
Process
Reduce
spread
USLLSL
Off-Center
USLLSL
Unpredictable
Centered
A BTarget
Remember... customers
experience our variation, not
our averages
Lean/Six Sigma Improvement Strategy
27

28. 28
•1. Loma Linda
University Medical Center
– Murrieta, CA
• 2. Charleston Area Medical Center,
Charleston WV
•3. Holy Family
Memorial,
Manitowoc WI
Today’s Program is a “3 - Act Play”

29. Richard L. Rawson, MBA
Chief Executive Officer
Loma Linda University Medical Center - Murrieta
Richard L. Rawson, MBA
Chief Executive Officer
Loma Linda Medical Center - Murrieta
29

30. Segment Overview
I. Loma Linda University Medical Center – Murrieta
II. Launch of a Lean Program
III. Industry Changes – Requiring Agility & Change
30

31. Loma Linda University
Medical Center-Murrieta
• 106-bed hospital located in
Murrieta, California – serving
Southwest Riverside County.
• Affiliated with Loma Linda
University Medical Center,
large academic medical center
located in Loma Linda, CA
(approx. 30 miles away). Part
of Loma Linda University Health
system.
• Faith-based system sponsored
by the Seventh-day Adventist
Church.
31

32. Loma Linda University
Medical Center-Murrieta
• Provides a wide range of services
including:
• Cardiac Surgery
• Interventional Cardiology
• Bariatric Surgery
• Neurosurgery
• Orthopedic Surgery
• Obstetrics
• Staffed by both community
physicians as well as faculty
physicians from the university.
• Engaged physicians and staff
• New culture developing
• Rapid growth and reputation
brought the hospital’s volume to
capacity in 2012.
32

33. Our Challenges
• Growing programs with
physical capacity limits put a
premium on our ability to
maximize throughput.
• Many internal processes and
systems were underdeveloped.
• Focus was on getting the hospital
opened quickly.
• Low initial volumes precipitated
cutbacks.
• Rapid growth since May, 2012
have stressed many of our
processes.
• Processes needing revision
and development.
• Revenue Cycle
• IT deployment
• Employee Scheduling
• ED throughput.
• Pretty much everything!
33

34. State of the Hospital – 2012
• Opened one year
• Volumes had been flat at about 50% occupancy since
January – growth had stalled.
• Revenue cycle was broken – days in A/R of 150.
• Leadership was discouraged.
• Desire to be “world class” but not supported by excellent
systems.
• Assets
– Very talented and engaged team.
– Good job of employee selection.
– Patient Satisfaction scores in excess of 90th percentile.
34

35. Culture Development
• Needed to address broken and underdeveloped processes.
• Unique opportunity to build a new culture on a foundation of
performance improvement.
• Achieve the teams “world class” ambitions by deploying
“world class” tools.
• Engaged Creative Healthcare to partner with us in the
development of a Lean program.
35

36. Elements of our Lean Six Sigma Deployment
• Management Training
– Administrative team had not been exposed to Lean/Six Sigma tools.
• Leadership and Candidate Assessment
• Lean & Six Sigma Training
• Training Projects and Certification
• Governance Program for Sustainability
• Project Management Application to track ROI
36

37. Deployment Approach
Becoming an
Emotionally
Intelligent
Leader
• Leadership
Assessment
Tools
• Leadership
Education
Candidate
Assessment
and Support
Program
• Personality
assessment
tools
• Interview
process
• Team dynamics
Program
Launch
• Training
• Projects
• Governance
Building
Strong Lean
Teams
• Getting the right
people on the
bus
• Well-balanced
Teams
Projects
Complete
• ROI verified
• Report outs
• Pipeline
replenished
37

38. Leadership Assessment
• Starts with Leadership – the entire team needs to be on board to support the program.
• CHC Executive Coach administered a behavioral and motivational assessment of the
hospital leadership team.
– Debriefed executives on results and behavioral characteristics.
– Compared characteristics with benchmarks of behaviors and values for Lean training developed by
Creative Healthcare.
– Improved the teams ability to understand the team dynamics as well as their own personal part of
it.
– Developed understanding of the Lean/Six Sigma program and their potential contribution to its
success.
• Perform baseline survey of management team to track culture improvement using three key
questions:
– How capable are we to articulate a vision of excellence for our patients and staff?
– How competent are we to mobilize resources toward that vision?
– How capable are we to sustain the positive changes we’ve made?
38

39. Leadership Behavioral Assessment
39

40. Program Launch
• Identify and train 12 “Lean Leaders”.
• Prioritize and deploy project teams.
• Identify and prepare team Champions.
• Establish a Lean Six Sigma Steering Committee
and governance structure.
• Publicize
40

41. LLUMC-M Proof of Concept Project
Emergency Room – Left Without Being Seen
Problem Statement: The approximate percentage of patients
that leave the ED without being seen by a MD is 7.85%.
Operating at this rate, 2,865 patients will leave without being
seen in 2013 for an approximate net revenue loss of
$1,713,419. This figure does not include revenue potentially lost
from patients admitted. Loss of revenue and loss of goodwill
can have a continued and increasingly damaging impact on the
viability of the institution, while being contradictory to the
hospital’s healing mission.
41

42. What is Critical to Quality to the Customer?
(Customer CTQ)
Output Requirements
Patient Visit Pleasant
Compassionate
Timely
Door to Triage
Door to MD
Patient Satisfaction –
Overall ED
Patient Satisfaction – RN
treat you with courtesy &
respect
42

43. Recommended Solutions
Rapid Medical Exam
 Open 7 days 9am – 11pm
 Two week trial period – prototype. (subsequent roll out)
 Four designated assessment chairs and one gurney.
 Reassigned RN assignments and bed numbers.
 Patient sign in sheet amended to include: Vital signs, ESI level, Current
Meds, allergies, history
 Added a MD/PA workstation.
 Staggered staffing to better accommodate workflow.
 ED tech assignments redefined.
 A Patient Access workstation has been moved into the ED.
43

44. Go Live 9-11-13
44

45. Improvement Impact Summary - 40 days
Before After Impact
LWOBS 7.85% LWOBS 3.0% 62% reduction in
patients leaving
$142,922. in lost net
revenue per month
$54,418. in lost net
revenue per month
$88,574. reduction in
lost revenue per month
ED Patient satisfaction
overall score – 57.6%
ED patient satisfaction
overall score – 67.4%
Increased by 10%
Duplicate patient
records created in ED
requiring manual fix by
HIM – 71
Duplicate patient
records created in ED
requiring manual fix by
HIM – 29
Reduction of duplicate
records by 59%
45

46. Improvement Impact Summary 2013 - 2014
2013 2014 Impact
LWOBS 7.85% 2% LWOBS 5.85% reduction in
patients leaving
2,868 patients will
LWOBS
730 patients will
LWOBS
2096 patients will stay
and see a MD
$142,922. in lost net
revenue per month
$ 36,478 in lost net
revenue per month
$106,444. in potential
net revenue saved per
month
$1,715,064. in lost net
revenue per year
$437,736. in lost net
revenue per year
$1,277,328 in potential
net revenue saved per
year
46

47. Next Steps
• Continue to publicize wins and gain momentum
within the organization
• Further build the organizational structure around
Lean and PI
• Prepare to launch additional projects and education
47

48. The Case for Lean, Six Sigma & Innovation
• Lower “per unit” reimbursement.
• Higher Volumes due to expanded coverage.
• Focus on Quality/Patient Safety with meaningful
incentives and penalties.
• Integrated Healthcare delivery systems to
coordinate care for a population.
48

49. LLUH – Center for Strategy & Innovation
Innovation
Making meaningful change to improve health care cervices,
processes, or organizational effectiveness and create new value for
stakeholders. Innovation involves adopting an idea, process,
technology, product, or business model that is either new or new to its
proposed application.
Adopted from the Baldrige Healthcare Criteria fro Performance Excellence
49

50. Better
Health
Lower
Utilization
Lower Cost
Improved
Well-Being
All Are Linked
Poor
Health
High
Utilization
Higher Cost
Lower Quality of Life
All Are Linked
Better
Health
Lower
Utilization
Lower
Revenue
All Are Linked
Poor
Health
High
Utilization
Higher
Revenue
All Are Linked
Vicious Cycles
Health System Perspective Community Perspective
50

51. 51
Purpose:
Establish a Center for Strategy and
Innovation to support the LLUH strategic
planning process and to innovate
new delivery models that engage
the community.
Catalyst for Regional
Innovation
Innovation
Creating Networks and Multidisciplinary Teams
Informal Networks to Incubate New Ideas
Piloting New Care Models within the System
Transforming the Experience and
Delivery of Healthcare
Enhanced Support
Community Health Development
Business Development
Clinical Decision Support
Finance
Philanthropy
Functions
Health Services Utilization/Data
Integration
Health Surveillance
Community Engagement
Innovation
Strategic Decision Support
Strategy/Innovation Think Tank
Functions
Community Health Management System
- ESRI/GIS
Consulting Services
Educational Forums
Innovation Facilitation
Strategic Planning
Center for
Strategy &
Innovation
Strategy
Strategy Development
Strategic Analysis
Environmental Scan
Strategy Deployment
and Alignment
Community Health
Needs Assessment
Community Engagement
Community Benefits
Community Health
Needs Assessment
Grant Writing
Collaborative Initiatives/
Civic engagement
Loma Linda University Health

52. Burning Questions
• Do we have the necessary information and competencies to
manage the risk of populations?
• Are we proactively innovating ahead of external pressures?
• Do we have a robust methodology for developing and adapting
new approaches?
• What will it take to move our organization to where we want to
be?
52

53. Signs of Trouble…
• “That’s not what I meant”
• “That’s not how it’s done”
• “That’s not how we measure it”
53

54. A Leader’s Challenge: Contain Ambiguity
54

55. Proof of Concept from NPR
• Hearings attempt to distinguish detainees who are legitimately
being held from those to be released.
– A judge must decide whether the government has proven a detainee is
dangerous.
• Which standards should be used? The rules are so unclear
that judges are applying different standards – leading to
different outcomes based on the same evidence.
• "It would have helped if Congress had given us a definition (of
an enemy combatant)” said Judge Royce Lamberth. "The
Bush administration gave us four different definitions; the
Obama administration gave us another definition; each of our
courts is deciding for themselves the proper definition.”
55

56. Can we agree on the definition
of “a good cookie?”
…and apply it successfully?
56

57. Proof of Concept – Your Turn
57
Setup: You have been hired as a Quality Manager for an animal cracker business. The company has
a “zero defects” philosophy regarding its products. You are also on a QA team (at your table).
Work with your team to establish the operational definition for a perfect animal cracker. Embody the
delicate balance between quality and productivity. Due to time constraints, assume that crackers
surpass expectations regarding “taste” for your entire inventory.
Write the operational definition in the space indicated below (take 5 mins).
Open Product. To practice application of the definition, apply it to one bag of product. Count those
crackers meeting the definition (“Pass”) and those that do not (“Fail”). Tally the quantity of passing
product on a separate piece of paper. Name this result Trial A.
When finished with above step, switch your product AND definition with the team across from you.
Adopt their definition, and apply to their product. Repeat the inspection exercise and tally results.
Name this result Trial B.

58. Lean, Six Sigma and Innovation:
Natural Companions
Practical Application: Use of A3 Problem Solving Tool
Glenn Crotty, Jr., MD
Charleston Area Medical Center
Charleston, WV

59. Objectives
• Outline CAMC’s foundation for PERFORMANCE
IMPROVEMENT and INNOVATION.
• Share our RESULTS.
• Describe how we ACHIEVED these results.
• Demonstrate how INNOVATION EXPANDS
THINKING to solve challenging problems.
59

60. CAMC Health System, Inc.
CAMC
Health
Education
and
Research
Institute,
Inc.
Charleston
Area
Medical
Center
Foundation,
Inc.
Charleston
Area
Medical
Center,
Inc.
Integrated
Health Care
Providers,
Inc.
CAMC General Hospital – 268 beds (Neurosciences, Orthopedics, Trauma)
CAMC Memorial Hospital – 424 beds (Cardiovascular, Oncology)
CAMC Women and Children’s Hospital – 146 beds (NICU, PICU)
CAMC Teays Valley Hospital – 70 beds – (Community hospital services)
60

61. CAMC Service Area
Cabell
Mingo
LincolnWayne
Wirt
Jackson
Kanawha
Roane
RitchieWood
Boone
Raleigh
Wyoming
McDowell
Logan
Mercer
Clay
Gilmer
Upshur
Lewis
Calhoun
Braxton
Webster
PocahontasNicholas
Tyler
Doddridge
Harrison Taylor
Barbour
Monroe
Greenbrier
Summers
Fayette
Ohio
MonongaliaWetzel
Marshall
Brooke
Hancock
Marion
Preston
Pendleton
Mineral
Grant
Hardy
Tucker
Randolph
Jefferson
Berkeley
Morgan
Hampshire
Mason
Pleasants
Putnam
Primary Service Area
Secondary Service Area
West Virginia’s Population: 1.8 million
Primary and Secondary Service Area: 557,328
A community
hospital and
tertiary referral
center
61

62. Mission
Striving to provide the best health
care to every patient, every day.
Charleston Area Medical Center, the best health care provider and teaching hospital in West
Virginia, is recognized as the:
Best place to receive patient-centered care.
Best place to work.
Best place to practice medicine.
Best place to learn.
Best place to refer patients.
Vision
62

63. Awards and Recognitions
• CAMC received the TPE Platinum Award (Ohio, Indiana, WV state level Baldrige program) and is
eligible to apply for the Malcolm Baldrige National Quality Award – the first organization in West
Virginia to win this award.
• Distinguished Hospital Award for Clinical Excellence from Healthgrades for ranking in the nation’s
top five percent of hospitals for mortality and complication rates. CAMC is the only
hospital in WV and one of only 260 hospitals nationwide to receive this award for providing
comprehensive high quality care across multiple clinical specialties.
• CAMC’s Cancer Program was awarded "Full Accreditation with Commendation” in May 2014 by
The American College of Surgeons' Commission on Cancer. CAMC earned all 7 commendations
in this survey which creates eligibility for consideration for the Outstanding Achievement
Award in 2015.
• 2014/2015 Consumer Choice Award winner by the National Research Corporation for hospitals
and health systems chosen for the best overall quality and image through a comprehensive
consumer assessment recognizing the hospitals and health systems chosen as among the best by
those they serve.
63

64. Leadership System What A Leader Must
Ensure Is Achieved
Our Foundation
(Vision, Mission)
Our Beliefs
(Values)
Behaviors A Leader
Cannot Delegate
Incorporates the Expectation for
Leaders to Improve
Performance /Innovate
64

65. Innovation: An Operational Definition
• Making meaningful change to improve healthcare services,
processes or organizational effectiveness and create new value for
stakeholders. Innovation involves adopting an idea, process,
technology, product or business model that is either new or new to its
proposed application. The outcome of innovation is a discontinuous
or breakthrough change in results, services, or processes [Source:
Baldrige]
• CAMC adds: Intervention that produces a statistically significant
change in results, or a 30% improvement over baseline
65

66. Innovation System
66

67. 67
•1. Strategic Planning Process -
establishes 4 year and annual goals
aligned by “pillar” Best Place to
Receive Patient Centered Care
•BIG DOTs/ Scorecards established
for each goal
• 2. Impact Leadership (capability and
capacity) prioritizes Six Sigma/Lean
resources to support goals for
improvement or innovation
• 3. Systematic scorecard
review for corporate, hospital
and department results for key
measures
•4. Identify need
for innovation
to achieve
breakthrough
performance.
EXAMPLE: TCT
PUTTING IT ALL TOGETHER. . .

68. RESULTS. . .
68

69. Clinical
Results
69
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
2009 2010 2011 2012 2013 2014
Projection
ObservedTo
ExpectedRatio
CAMC Premier Top 25% Premier Top 10%
100 Top Hospitals National Avg
Good
Inpatient Mortality
-0.20
0.05
0.30
0.55
0.80
1.05
2010 2011 2012 2013 2014
Projection
Rate
CAMC Premier Top 10% Premier Top 25%
Good
Inpatient HARM
Rapid Improvement
Industry & Benchmark Leadership
1,752 lives saved 2010-2013

70. Value
Creation
Indicator Metric
2009
Baseline
2012 2013 2014 Improvement
Employee Engagement
IHI Engagement Survey results
[1-5 scale]
3.64 3.91 4.02 4.01 10%
Employee Satisfaction
CAMC Employee Satisfaction Survey
Results
3.43 3.73 3.89 3.98 16%
Patient Experience
HCAHPS Overall Rating
63.9% 66.3% 68.9% 68.7% 8%
Productivity FTEs per 1000 Adjusted Patient Days 5.67 5.25 5.45 5.39 5%
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Financial Impact
2001 - 2014 October
Cumulative Total Annual Improvements
70

71. Rapid Modeling Corporation for IHI ; over 350 hospitals are participating; work sampling studies are conducted twice per year on each unit
48%
56%
40%
45%
50%
55%
60%
Baseline Current
Bottom Quartile = 47.9%
Median = 51.8%
Top Quartile = 55.6%
2012 – 2014 Value Added RN Time:
Hours: 180,483 FTEs: 86.77 Cost: $4,719,623
RN Direct Patient Care Time
71

72. Engagement in A3 / Top 5 Board Teams
72

73. A3 PROBLEM SOLVING
73

74. What Are Problems?
PROBLEMS:
• Are abnormalities that vary from the desired
or expected condition
• Are OPPORTUNITIES for improvement
• Are a normal part of daily operations
GOT ANY???
74

75. A structured method to
determine the quickest, most
cost effective way to ensure the
root cause of a problem is:
 Identified
 Addressed
 Permanently Eliminated
A3 Problem Solving
Highest quality
Lowest cost
Continuous improvement
Just
in
time
Built
in
Quality
Problem solving
Standardization
Human Centered work
Visual Management5S
75

76. Why Use the A3 Problem Solving Process?
• Provides an effective, repeatable process to prevent problem
recurrence
• Intuitive and easy to learn and remember
• Can be used to create better and fewer meetings
• The A3 form is both a template for problem solving and
documentation of the efforts
• The A3 process is satisfying to everyone who uses it, especially
frontline staff members
76

77. A3 Problem Solving Process
Direct Cause
Cause
Cause
Cause
Initial Problem Perception
(Large, Vague, Multiple Problems)
Five Why’s?
Investigation to
Root Cause
Clarify the Problem
Problem Defined
Most Likely Cause
Corrective Action
Share Best
Practices
Basic Cause / Effect Investigation
Root Cause
Why?
Why?
Why?
Why?
Why?
Go and See
77

78. A3 Problem Solving Tool
The A3:
1. Is an objective, pencil and paper tool designed to solve small,
specific problems.
2. Is completed on the front side only of an 11x17 (or A3) sheet of
paper.
3. Defines the current condition and looks at the root cause of the
issue.
4. Guides the user to define clear steps to implement changes and
builds accountability.
5. Provides a tool to validate problem solving work with staff
members.
6. Can be posted for easy sharing with staff members and others.
78

79. A3 Problem Solving Report
79

80. A3 Problem Solving Report
The left side of the A3 report
is used to document the
current state of the problem.
80

81. A3 Problem Solving Report
The right side of the A3 report is
used to document the
future state of the problem.
81

82. A3 Problem Solving Report
In the DEFINE section, the TOPIC/ISSUE
describes what is going on with this problem,
specifically through the eyes of the customer.
BACKGROUND/PROBLEM STATEMENT:
Includes information for understanding the issue.
(When, where, how does it occur? How big is
the problem? What is the impact?) Includes
history and data that is pertinent to the issue.
GOAL STATEMENT: Good problem and goal
statements are SMART: Specific, Measurable,
Achievable, Relevant, and Time-Bound. Keep it
brief, simple, yet specific. Do not assign blame.
Do not assume solutions. You may not have
enough information at this point to complete the
goal statement. Review and update it after the
Analyze phase.
82

83. A3 Problem Solving Report
In the MEASURE section, the CURRENT
STATE of the problem is described.
Draw a diagram of how the work process
happens now. Do direct observation of the
work process to ensure that reality is
reflected. Highlight the specific problems/
issues/waste with storm clouds or stars.
What specifically about the problem/issue is
not defect-free? Can you measure the
waste?
BASELINE METRICS: Include pertinent
current state measurement data that is
aligned with the Problem Statement and
Goal Statement. Include specific
information for the source(s) of data, as well
as clear definitions for the metrics.
83

84. A3 Problem Solving Report
In the ANALYZE section, identify specific
problems and waste with the current condition.
(as identified by storm clouds above). Get to
the root cause(s) for the problem(s).
Consider using one or more of the following
tools:
• 5 Whys
• Brainstorming
• FMEA (Failure Modes Effects Analysis)
• Fishbone
Update Goal Statement: Be sure to update
the Goal Statement based upon the findings of
the Measure and Analyze phases of problem
solving.
84

85. A3 Problem Solving Report
In the IDEAL FUTURE STATE
section, draw a diagram of what
should be happening (a better way to
work). Include specific measurable
targets.
Highlight the improved features using
circles, or call-outs. Make the
changes and improvements obvious
to anyone reviewing your document.
These should address the problems
or storm clouds in the Current State.
85

86. A3 Problem Solving Report
Under SHORT TERM SOLUTIONS, identify what
we are going to do in the short term to have
immediate impact on the problem. Short term
solutions should address any immediate safety or
major financial implications.
Under LONG TERM SOLUTIONS, identify what
we are going to do to move to the IDEAL STATE.
Solutions may need to be evaluated and
prioritized. Pilots or PDSA tests of change may
need to be conducted on solutions.
A cost/savings analysis and summary may be
required for solutions. This supports decision
making and prioritization of solutions, as well as
facilitates the effective management of resources.
86

87. A3 Problem Solving Report
In the IMPLEMENTATION PLAN section,
include the specific actions of implementing
solutions.
For each action, include who will do it, by
when, and the expected outcome. This
optimizes your probability of success and
creates accountability.
87

88. A3 Problem Solving Report
In the SUSTAINMENT/FOLLOW-UP
section, include when, how, and by whom
follow-up will be conducted.
What are the results compared to the goals?
What are the strategies for sustaining
improvements? (Examples: 5S, visual
management, single point lessons,
standardized work, error proofing, etc.)
88

89. A3 Problem Solving Report
On the bottom left, include the date, or
date range, when this A3 was
completed.
Include the names of all participating
team members. Identify a key contact.
On the bottom right, include
documentation of any approvals that
are required of these solutions.
What stakeholders will need to be
informed and approve solutions?
Remember any regulatory entities.
89

90. A3 Problem Solving Report Functions
• Sets a standard for a common format
• Displays the originator’s thinking
• Prompts use of a thorough problem solving process
• Gives a “snapshot” overview
• Records the anticipated dates of completion
• Maintains the history
• Shares best practices
• Applies solutions to similar problems in other areas
90

91. A REAL LIFE EXAMPLE
The Important Message from Medicare is required under the Patient
Rights section 200.62 in Medicare (CMS-R-193)
As of July 2014, our compliance was only 17%.
91

92. A3 TO THE RESCUE
92

93. A3 Problem Solving Report
Table Assignment
Problem to Address:
Improving the delivery of the IMM
93

94. A3 Problem Solving Report
Important Message from Medicare
(MM)
•Must be signed for patients who are
Medicare recipients admitted to an acute
care hospital upon admission and 48
hours prior to discharge unless LOS is
less than 2 days.
94

95. A3 Problem Solving Report
In the MEASURE section, the CURRENT
STATE of the problem is described.
Current process reviewed:
•Admission
•Patient status change to inpatient
•Notification of pending discharge
•Nursing Discharge Checklist
BASELINE METRICS:
Only 17% of Medicare patients were
meeting the Important Message from
Medicare (MM) requirement using the
current process.
95

96. A3 Problem Solving Report
In the ANALYZE section, identify specific
problems and waste with the current condition.
Updated Goal Statement: Achieve 100%
compliance with IMM.
• Identified that the “Potential Discharge”
was not always getting placed. This order is
the trigger to start the workflow process.
• Staff (Health Unit Coordinators) did not
understand the importance of compliance.
•Communication breakdowns following
multi-disciplinary rounds
•Missed opportunity for workflow alerts
96

97. A3 Problem Solving Report
IDEAL FUTURE STATE
•IMM signed for all Medicare patients within 48 hours of
admission and 48 hours of discharge.
•Registration obtains admission IMM for patients
registered in Admitting or the Emergency Department.
•If the IMM is not obtained on admission, the Health Unit
Coordinator (HUC) on the inpatient unit receives an alert
at the 24th hour of admission and obtains the IMM.
•If a patient is admitted as observation status and then
coverts to inpatient status, the HUC will obtain an
admission IMM.
•If a patient is discharged to a lower level of care, a
discharge IMM is signed, dated and placed in the
medical record.
97

98. A3 Problem Solving Report
Under SHORT TERM SOLUTIONS, identify what we
are going to do in the short term to have immediate
impact on the problem.
Solutions – SHORT TERM
•Assign ownership of daily Incomplete IMM Report
•Determine root cause of defects
•Benchmark
•Determine additional root cause of defects in process:
1. admitted through the admitting department or ER
2. become an IP admission once on the nursing units
3. determination of anticipated discharge date
4. completion of second IMM prior to discharge.
5. determining root cause of education and training
failures
Solutions – LONG TERM
•All key process steps identified, performing as
designed, monitored, and with zero errors.
98

99. A3 Problem Solving Report
In the IMPLEMENTATION PLAN section, include
the specific actions of implementing solutions.
Implementation Plan
Actions
Who By When Expected Outcome
Initial IMM training for
Registration clerks
JR Completed Initial IMM 100% of those
through the admissions
office
Initial IMM for those
converted to IP status
LS Completed HUCs trained and retrained
Identification of Medicare
Advantage Patients
JR Jan 15, 2015 Capture the remaining
patients missed
Identification of pending
discharge
Nurse
managers
In process
99

100. A3 Problem Solving Report
In the SUSTAINMENT/FOLLOW-UP
section, include when, how, and by whom
follow-up will be conducted.
• Online education for new hires, HUCs and
admitting staff
•Electronic Audits by unit
100

101. 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Jul-14 Aug-14 Sep-14 Oct-14 Nov-14
% Met
101
CAMC Important Message for Medicare
Compliance

102. Introduction to
Blue Ocean Strategy

103. Introduction to Blue Ocean Strategy
• “Blue Ocean Strategy” is a best selling book and
philosophy that is increasingly finding its way into
healthcare strategic planning
• BOS is strategic alignment of Value, Profit and People to
systematically maximize opportunity while minimizing risk
• BOS depends on the creation of “Value Innovation,”
achieved by lowering industry cost structure while
increasing perceived value
• More at www.blueoceanstrategy.com
103

104. Blue Ocean Strategy, Explained
Value
104

105. Blue Ocean Strategy, Explained
Value
Costs …while pushing for
a sharp drop in the
industry’s cost structure
105

106. Blue Ocean Strategy, Explained
blue
ocean
Value
Costs …while pushing for
a sharp drop in the
industry’s cost structure
106

107. “Red Oceans” vs. “Blue Oceans”
Red Ocean Blue Ocean
Compete in existing market space
Increase share – fight for existing demand
Create uncontested market space
Increase market – Create new demand
Exploit existing demand
Get bigger share of customers
Either differentiate or be low-cost leader
Don’t get stuck “in the middle”
Segment the market
Focus on special needs
Create and capture new demand
Look for non-customers
Differentiation AND low cost
Simultaneous pursuit = Value Innovation
De-segment the market
Look for widely shared needs
107

108. Very
High
Very
Low
Low
Med
Med
High
Price Meals Lounges Seating Choice Hub Connectivity Friendly Service Speed
Point-to-Point
Departures
Southwest
Car Transport
Average Airline
Strategy Canvas
Southwest Airlines
108

109. Very
High
Very
Low
Low
Med
Med
High
Price Meals Lounges Seating Choice Hub Connectivity Friendly Service Speed
Point-to-Point
Departures
Southwest
Car Transport
Average Airline
Strategy Canvas
Southwest Airlines
109

110. More Blue Oceans
• HealthTap
• iTriage
• Keona Health
110

111. – 50% of people in the ED don’t have qualified
emergencies
– 73% can’t access their physician during an urgent
episode
– 38% of users select an inappropriate level of care
– Unsustainable and likely exacerbated under ACA
The Problem
© Keona Health 2012
111

112. Workflow
Web/Mobile App:
Intelligent
Personalized
Interview
• Emergency
Screening
• Priority
• Disposition
Recommendation
Education Materials
Patient
Nurse/Care Team
Clinical Summary
Triage Protocols
Nurse
Dashboard
Prioritization
Safety Check
Insight Engine
112

113. Patient
Practitioner
Contact Center
Save Costs
Add Value
80%
Look for advice online
50%
Reduce unit
labor cost
62%
Of practice’s patients willing
to switch for online access
$922 Per ED visit
Payer
A Bona Fide Blue Ocean!
113

114. Success Story:
• > 50% time savings
• Caller & Staff
Satisfaction
114

115. Improvement & Innovation:
Foundations for Strategic Transformation
Holy Family Memorial
Manitowoc, WI
Mark Herzog, FACHE
President & CEO

116. Holy Family Memorial
MANITOWOC, WI
• Manitowoc County
Pop. 82,000
• City of Manitowoc
Pop. 52,000
– 80 miles north of
Milwaukee
– 35 miles
southeast of
Green Bay
116
Milwaukee
Green Bay
Madison

117. Independent, Single Market, Tightly Integrated System
• Laboratory for integration,
improvement & innovation
• Physicians: 90 provider employed
multispecialty group
• Hospital: Orthopedics, OB,
Interventional Heart Center, Cancer
• 1200 employees avg tenure 15
years
• Community grounded & focused,
Faith-based organization
117

118. The Holy Family Memorial Story
Since 2010 HFM has presented at:
• ACHE Congress 2010-2015
• AHA’s Healthcare Forum, Partnership for Patients and
Society for Healthcare Strategy & Market Development
• American Society for Quality International Forum
• Beryl Institute
• CoDev 2013 International Open Innovation Conference
• College of Healthcare Information Management Executives
• National Center for Healthcare Leadership
• University of Michigan Health Management and Policy
Program
• Griffith Leadership Center Symposium
118

119. HFM’s “Why”
Holy Family Memorial is a
network of health
professionals who, rooted
in the healing ministry of
Jesus Christ, provide
services to help
individuals and our
communities achieve
healthier lives.
Mission Vision
Holy Family Memorial, as a
network and in partnership
with others, will be the clear
choice for healthcare in the
lakeshore region, recognized
as the leader in patient-
centered, excellent medical
care, while delivering valued
outcomes in a Christian
environment.
2
117

120. Core Belief: Doing What’s Right
“Start by doing what is necessary; then do what is
possible; and suddenly you are doing what is
impossible”
St. Francis of Assisi 1181-1226
“Are you meeting the needs of a community, or the
needs of a corporation?”
Sr. Laura Wolf 2013
120

121. The Big Picture: First-Curve to Second-Curve
HOW WILL HOSPITALS SUCCESSFULLY NAVIGATE THE SHIFT?
121
• Fee-for-Service
Reimbursement
• High Quality Not Rewarded
• Acute Inpatient hospital
focus
• Stand-Alone Care Systems
Can Thrive
• Regulatory Actions Impede
Hospital-Physician
Collaboration
VOLUME Based
• Payment Rewards
Population Value: Quality &
Efficiency
• Quality Impacts
Reimbursement
• Scale Increases in
Importance
• Realigned Incentives,
Encouraged Coordination
VALUE Based
THE GAP
American Hospital Association “Hospitals & Care Systems of the Future” Fall 2011

122. At 21st & Franklin Street
September 2012
122
At 21st & Franklin Street
June 2013

123. OPEN
Innovation
External
Disruption
Innovation: DEFINED
STRATEGIC
Innovation
Redefine
the process
BLUE OCEAN
Thinking
Redefine
the market
OPERATIONAL
Innovation
Improve the
process
123

124. IMPROVEMENT
• Lean Healthcare
• Six Sigma
INNOVATION
• Bright Ideas
• SPUR
TRANSFORMATION
• Open Innovation
• Proactive Disruption
• Culture of adaptability
HFM’s Reform Roadmap
Transforming Culture and Care Through Improvement & Innovation
MOVING CULTURE & CARE TO THE RIGHT
Staff & Physicians Leadership
Transforming
Partnerships
124

125. 2001:
Over 100
2008: Focus
on Health of
a Community
2014:
90 Employed
Providers
2001:
90 bed
hospital
2001:
35 Employed
Physicians
2001: Focus
on the Sick
HOSPITAL
PHYSICIANS
& NP/PA
MISSION
FOCUSMANAGEMENT
2014:
35 bed
hospital
2014:
Under 50
2001-14 HFM Care System Transformation
125

126. Transformation Metrics
2001 - 2014
• Based on and facilitated by Improvement principles and tools:
• Reduced admissions by nearly 50%
• 5% inpatient market share shift
• Patient safety top 5% in nation; safest patient is the one never
admitted
• 40% growth in clinic visits
• Margins last 3 years 0-3%, 220 Days Cash on Hand
• S&P BBB+ stable outlook
• Care delivery system among top 13% in Wisconsin
126

127. 200%
100%
150%
Source: WHA 3/20/14
TRANSFORMATION’S IMPACT ON
Hospital Use and Cost to Society
• Population adjusted regional growth in amount of
hospital charges 2001 through 2013:
127
Outagamie
135%
Brown
208%
Manitowoc*
122%
*If HFM were the only provider the increase would have been 82%

128. If HFM Were the Only Choice
UNCOVERING SAVINGS FOR MANITOWOC COMMUNITY
Amount our Community
Spent on Hospital Care
If Manitowoc used
HFM ONLY
$286 Million
$241 Million
$45 MILLION!Potential Savings for
our Community
Source: WHA 1/10/14 2001 through 2012 Data
128

129. How did we do it?
FOCUS ON CULTURE
129
CULTURE OF INNOVATION & ADAPTABILITY
1
• IMPROVEMENT: Lean Healthcare
• CULTURE: Staff & Physician Engagement
2
• OPEN INNOVATION: Partnerships & Practices
• CULTURE: Individual accountability & Leadership Skill
3
• TRANSFORMATION: Leveraging SPUR strategically
• Systematically challenge each service’s effectiveness,
reason for being and strategic ‘fit’

130. 2005 Missed the Green
• My Initial focus on Innovation
– No time to innovate? Hired analyst
– Leaders not ready/field unplowed
– Had the ‘curves’ backwards
– Redeployed analyst
• 2006 shifted focus to Improvement
– Lean/Six Sigma Focus- imperfection OK, small steps
– Change Management Processes; HFM Way
– Outside Innovation: Sensei – Knowledge transfer & multiplier
– Creative Healthcare Engagement
130

131. Source: Human Synergistics, Michigan
Shaping a Culture of Innovation
2009 CULTURE
• Conventional
• Dependent
• Approval-
Oriented
IDEAL CULTURE
• Humanistic/
Encouraging
• Self-Actualizing
• Achievement
131

132. 2009 Focus: Innovation Mulligan
• Created Innovation Department
– Open Innovation Management Systems
• Dedicated Staff
• R&D, concept studies, business plan models
– Focus on deployment process – “Bright Ideas”
• Staff Engagement Process
– SPUR Process to drive Open Innovation
• Community & Board Engagement
• Roadmap for full engagement/integration
St. Mulligan
132

133. Improvement + Innovation = Change
CHANGE MANAGEMENT AT HFM
• More than 200 bright ideas for improvement and innovation
suggested by staff each year.
• 30% of employees annually involved on projects include
significant, meaningful physician involvement.
• Over 80% of leaders have been trained on change
management tools
• Culture emphasizes use of project teams to quick solve
problems and implement solutions
133

134. Leadership Team Assessment Tool
134
A B C
EMPLOYEENAME
Leadership
Institute
JOB DESCRIPTION
CoreRole
Competency
MatrixRole
Competency
FuturePotential:
*Courage
*Credentials
*Capacity
REQUIRED
POSITION:
educationY/N
Weighted
Score
Column
A
Weighted
Score
Column
B
Weighted
Score
Column
C
Total
Score
Score %
2014 PAR
Scores
1-2-3-4-5 1-2-3-4-5 1-2-3-4-5 Y/N 30% 40% 30%
Division Name
2014 Leadership Team Assessment - By Score

135. Leadership Team Assessment Criteria
A. Core Role competence:
• Capability within current role
B. Matrix Role competency:
• Core competence + strength in influencing others outside of
your current department and/or leading project teams, etc.
C. Future Potential:
• Core + Matrix competence + high potentiality (curiosity, insight,
courage and determination)
• Distinguishes second curve talent to influence and lead larger
groups
135

136. Leadership Between the Curves
• First & Second Curve Competencies not the same
– Only 30% of leaders strong in both
• Curve Delta: Rearview Mirror versus Headlights
• Applying Change Management HFM:
– Reduced senior leaders by 60%, and total full-time leaders by
over 50% over last 10 years
– “more with less” becomes “more with many”
– Significantly enhanced physician and leader engagement and
staff participation in change
136

137. 137

138. Call Us From Our Settled Ways
Call us from our settled ways,
Out of old habits & established traditions.
Call us into the land of promise, to new life & new possibilities.
Make us strong to travel the road ahead.
Deliver us from false security & comfort,
And the desire for ease and uninvolved days.
Let inspiration dwell in us
That our mission may be fulfilled for the well-being of all.
138

139. Donald Rumsfeld
Source: brainyquotes.com
“There are known knowns.
These are things we know that we know.
There are known unknowns.
That is to say, there are things that we know we don't know.
But there are also unknown unknowns.
There are things we don't know we don't know.”
139

140. Organizational Intelligence (OQ)
“It takes meta-cognition,
in this case, awareness of our lack of awareness,
to bring to light what the group has buried in a grave
of indifference or suppression.
Clarity begins with realizing what we do not notice,
and don’t notice what we don’t notice.”
-Daniel Goleman, Focus 2013
140

141. Strategic Program Unit Review
KNOWLEDGE DOMAINS
141
KNOWLEDGE
AWARENESS
KNOWDON’TKNOW
NOT AWARE AWARE
Source: Gary Hauer, Bay Park Associates Inc. Copyright 2012
What you know, and
you're aware you
know it.
DAY-TO-DAY FUNCTION
What you know,
and you're not aware
you know it.
INSIGHT & DISCOVERY
What you don't know,
and you're not aware
you don't know it.
BLUE OCEAN
What you don't know,
and you're aware
you don't know it.
RESOLVE WITH
EDUCATION & TRAINING

142. Avoiding the binge/purge cycle of fads & reactivity
Strategic Program Unit Review (SPUR)
142
• Repeating process reviewing all programs and service units
– Asks what, why, how, how well, how can we do it better?
– Objective
– Systematic
– Consistent
• Each review models a scenario for program/unit:
– Growth
– Improvement
– Repositioning
• SPUR integrates LEAN principles such as:
• Outside eyes
• A3 planning
• Improvement toolbox
• Elevates “ideal future state” definition for a given process to disruptive ideation

143. Strategic Program Unit Review (SPUR)
What great thing would you attempt
if you knew you could not fail?
• Creates a safe place for leaders to ask for help and redesign
their service delivery with the knowledge that every program
undergoes SPUR every 3-4 years
• Routinely ‘cleaning our closets’ frees energy & resources
• Team approach hardwires buy-in for big things
• Uses “outside eyes” to spur creativity
• Nearly 20% of the time, we transition to a new business
model
143

144. Identifying the
Future State
144
Research:
• Grow
• Improve
• Reposition
Ideation
Measure,
PDCA
Identify Future
State!
Action Plan
Implementation

145. The Green Dollar Difference
2009 - 2013
145
Total financial
gain:
$11.8M!
$5M
INNOVATION
IMPACT
$6.8M in
IMPROVEMENT
SAVINGS

146. SPUR RESULTS: 2009 - 2013
146
19% of projects
REPOSITION
41% of projects
GROW services
to produce
measurable financial
outcomes
40% of projects
maintain or
IMPROVE
current operations
and customer
service
Strategic Program Unit Review
▪ 104 SPUR Projects conducted
▪ 43 projects focusing on
GROWTH
▪ 42 projects focused on
IMPROVEMENT
▪ 20 projects focused on
REPOSITIONING
(internally or externally)

147. Open Innovation: Partnerships
147
CLINICAL OPERATIONAL
COMMUNITY
LEARNING
BUSINESS
CareTech

148. Leveraging Innovation:
CONNECTING THE CHC FLYWHEEL AND THE HFM SPUR
148
1. IDEATION,
INCLUDE
OUTSIDE
EYES
2. RESEARCH &
CROWDSOURCING 3. ACTION PLAN
IMPLEMENTATION
4. MEASURE,
PDCA

149. HFM’s Lessons Learned
1. Change Management empowers associates to have control over
their work and engagement in the future.
2. Achieving success in transformation inspires confidence & optimism.
3. A disruptive change model engaging stakeholders at all levels
provides a method to respect tradition while transforming for the
future.
4. A cultural foundation built on individual and collective ownership of
change is crucial to successful transformation.
149

150. RIGHT
CARE
RIGHT
SETTING
RIGHT
OUTCOMES
THE RIGHT CHOICE
150
Copyright © 2013 Holy Family Memorial. All rights
reserved.

151. APPENDIX
Dr. Glenn Crotty
151

152. Ian R. Lazarus
Mr. Lazarus is Principal and Founder of Creative
Healthcare, which provides training and technologies
to support healthcare performance improvement.
CHC also provides training and certification in Lean
and Six Sigma methodologies. Mr. Lazarus' career
has included long term executive positions at Kaiser
Permanente, McKesson and Voluntary Hospitals of
America.
He has presented at ACHE’s Congress on Health Administration for the past 12
years, presents across the U.S. at ACHE regional clusters, and received the
ACHE Distinguished Service Award in 2011 for his years of voluntary service. His
articles have appeared in The Journal of Healthcare Management, Managed
Healthcare Executive, and Becker’s Hospital Review.
152

153. Richard Rawson
Loma Linda University Health System recently named Richard L. Rawson
Chief Executive Officer of Loma Linda University Medical Center–Murrieta
and Senior Vice
President for Strategic Planning for the health system.
LLUMC-Murrieta opened in early 2011 and is currently growing rapidly under
Rawson’s leadership. With a focus on patient care and quality, Rawson is
driving many key initiatives and leading service line development that will give
the community access to more healthcare services.
With more than 28 years of health care experience, Rawson is a visionary
leader, with a track record of growth and financial performance, creating new
innovative programs with a focus on patient experience, leadership
development and performance improvement.
Previous to joining LLUMC-M Rawson held a variety of administrative and
financial positions throughout Northern and Central California.
He holds a Master of Business Administration from California State University,
Bakersfield.
153

154. Glen Crotty Jr, MD, FACP
Glenn Crotty, Jr., MD, FACP, is the Executive Vice
President and Chief Operating Officer of the
Charleston Area Medical Center (CAMC) located
in Charleston, West Virginia.
Dr. Crotty oversees the operations of a three-
hospital system with 1800 open-heart procedures
per year, an ACS certified level one trauma center
and a Women and Children’s Hospital with level
three NICU and PICU.
He is responsible for CAMC’s Quality Improvement
Program and is the corporate sponsor of CAMC’s
Six Sigma Program. In 2009, Dr. Crotty was
appointed to the National Board of Quality
Examiners for the Baldrige National Quality
Program.
154

155. Mark Herzog
Under Mark’s leadership, Holy Family Memorial has
been recognized nationally for innovation, safety, and
delivery system transformation.
The HFM transformation story has been presented to
diverse audiences such as ACHE, AHA, CoDev
International Open Innovation Conference, National
Center for Healthcare Leadership, and the Griffith
Leadership Center Symposium.
Mark serves in various board roles with WHA and
AHA, and was a 2012 finalist for AHA’s Shirley Ann
Munroe Award.
He holds a MHSA from the University of Michigan
and BA from St. Laurence University, Canton, NY.
155
Mark Herzog, FACHE
President and CEO
Holy Family Memorial,
Manitowoc, WI

156. Presenter Contact Information
• Ian R. Lazarus
– irl@creative-healthcare.com
• Richard Rawson
– rrawson@llu.edu
• Glenn Crotty Jr, MD
– glenn.crotty@camc.org
• Mark Herzog
– mherzog@hfmhealth.org
156

157. Six Sigma DMAIC
157
DEFINE - What is the problem?
MEASURE - What will be measured? What
is the target you want to achieve?
ANALYZE - What is keeping you from
achieving the target? What are the most
important causes of the problem?
IMPROVE - What did you do to remove the
causes of the problem?
CONTROL - How are you going to sustain
the improvements?
DEFINE
M
EA
SU
R
E
ANALYZE
IMPROVE
CONTROL

158. 5 Whys
• Used to determine the root cause
• Repeatedly ask the question, “Why?”
• Peels away the layers of symptoms which can lead
to the root cause of a problem.
158

159. Fishbone
159

160. Topic/Issue: What is going on? What is the issue through the eyes of the
customer/patients?
Background/Problem Statement: Include information for understanding the issue.
(when, where, how does it occur? How big is the problem? What is the impact?) Include
history and data that is pertinent to the issue.
Goal Statement:
Good problem and goal statements are SMART: Specific, Measurable, Achievable,
Relevant, and Time-Bound. Keep it brief, simple, yet specific. Do not assign blame. Do
not assume solutions. You may not have enough information at this point to complete
the goal statement. Review and update it after the Analyze phase.
Ideal Future State:
Draw a diagram of what should be happening: a better way to work.
Include specific measurable targets. (quantity/time)
Highlight the improved features using circles or call-outs. Make the
changes/improvements obvious to anyone reviewing your document. These should
address the problems, or storm clouds in the Current State.
DEFINE
Current State
Draw a diagram of how the work process happens now.
Do direct observation of the work process to ensure that reality is reflected.
Highlight the specific problems/issues/waste with storm clouds or stars.
What specifically about the problem/issue is not defect-free?
Can you measure the waste?
Baseline Metrics Included pertinent current state measurement data that is aligned
with the Problem Statement and Goal Statement. Include specific information for the
source(s) of data, as well as clear definitions for the metrics.
MEASURE
Analysis
Identify problems and waste with the current condition. (as identified by storm clouds
above)
Get to the root cause(s) for the problem(s).
Consider using one or more of the following tools:
• 5 Whys
• Brainstorming
• FMEA (Failure Modes Effects Analysis
• Control/Impact Matrix
• Relationship Matrix
Update Goal Statement: Be sure to update the goal statement based upon the findings
of the Measure and Analyze phases of problem solving.
ANALYZE
IMPROVE
Solutions – Short Term
What are we going to do in the short term to have immediate impact on the problems.
Short term solutions should address any immediate safety or major financial implications.
Solutions – Long Term
What are we going to do to move us to the Ideal State.
Solutions may need to be evaluated and prioritized.
Pilots or PDSA tests of change may need to be conducted on solutions.
A cost/savings analysis and summary may be required for solutions.
• Supports decision making and prioritization of solutions
• Facilitates the effective management of resources
Implementation Plan
Actions
Who By When Expected Outcome
Include specifics of implementing
solutions
Sustainment/Follow-up Plan
When and how will follow-up be conducted? By whom?
What are the results compared to the goals?
What are the strategies for sustaining improvements?
• Examples: 5S, visual management, single point lessons, standardized work, error proofing,.
CONTROL
Date: Include the date, or date range, when this A3 was completed.
Team Members: Include the names of all participating team members. Identify a key contact. Approvals:
What stakeholders will need to be informed and approve solutions? Remember any related regulatory entities.
A3 Problem Solving Reference Guide
160

161. Related Reading
• “What will it take? Exploiting trends in strategic planning results in practical steps to prepare for
reform,” by Ian R. Lazarus, FACHE, The Journal of Healthcare Management, March/April 2011
• “Lean Thinking: Banish Waste and Create Wealth in Your Corporation,” by James P. Womack and
Daniel T. Jones, Free Press, 1996, Revised 2003
• “Six Sigma enters the Healthcare Mainstream,” by Ian R. Lazarus, FACHE and Wendy Novicoff,
Ph.D., Managed Healthcare Executive, January 2004
• “Blue Ocean Strategy,” by W. Chan Kim and Renée Mauborgne, Harvard Business Press, 2005
• “The Innovators Prescription, A Disruptive Solution for Healthcare,” by Clayton Christensen,
Jerome H. Grossman MD, and Jason Hwang MD, McGraw-Hill, 2009
• “Innovation Is Everybody's Business: How to Make Yourself Indispensable in Today's
Hypercompetitive World,” by Robert B. Tucker, Hoboken, NJ: Wiley, 2011
• “Where Good Ideas Come From: The Natural History of Innovation,” by Robert Johnson. New
York: Riverhead, 2010
• “Chasing the Rabbit,” by Steven J. Spear
• “Understanding Variation: The Key to Managing Chaos,” by Donald J. Wheeler
• “Managing the Unexpected,” by Karl Weick and Kathleen Sutcliffe
• 2013 Malcolm Baldrige Award Criteria
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