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HFMA Live: Using Lean Concepts to Improve Revenue Cycle

June 26, 2012
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Hospital uses tools for continuous improvement


Bethesda Memorial Hospital in Boynton Beach, Fla., has used lean sigma disciplines as a basis of continuous improvement and to ensure sustainable business outcomes.

Joanne Aquilina, CFO and vice president of finance at Bethesda, says hospitals are hospitals are faced with heightened financial pressures, such as decreasing Medicare reimbursements; and compliance with new rules and mandates, including increasing regulatory oversight and reporting and reporting demands. Preparing for RAC audits is taking up staff time. On top of that, hospitals are faced with preparing for ICD-10, a project that takes up significant resources, she says.

At the same time, hospitals are embarking on mission expansion and growth opportunities. Although a few hospitals have made the leap to accountable care organizations, most have not made that leap. Patient care medical homes will become more important in the future, particularly with accountable care criteria, to reduce readmissions. Technology and connectivity solutions that can help continue care for patients when they leave the hospital, she says.

About two years ago, the hospital embarked on a financial improvement program, adding that it can take months or even years to change. The tool for change (working with Optum Insight) is “lean sigma,” which it calls the Gold Standard. Lean sigma uses precepts of Six Sigma, with certain advantages: relatively short duration for eliminating waste, less need for a hierarchical structure, and less need for extensive training for learning, implementation and maintenance. Aquilina says her staff is working with operational, decision support and accounting teams from Optum to help change the culture at the hospital.

This is a long-term project, and Aquilina estimates it has another two years to go. The goal is to create a sustainable framework for process improvement, she says, coming up with a methodology to transform revenue cycle management in the healthcare system.

Examples of results to date include:

  • Positive morale changes in the revenue cycle culture. Staff works together to create change and identify root causes. Employees feel empowered to make changes.
  • Employees receive valuable education, training and mentoring to deliver and improve meaningful metrics.
  • Process standardization and prioritization has reduced the dischasrged, not final billed rate. The current backlog is well below the industry standard for inpatient coding.
  • A coding worksheet was developed to help coders organize their notes while reviewing charts.
  • Streamlined processes in scheduling and registration has improved customer satisfaction by decreasing wait times.
  • An increase in cash flow due to standardization, transparency in metrics, and more expedient billing.
  • Significantly increase in clean claim rate.
  • Productivity increase by removing workflow bottlenecks and redundancies.