The Tech Doctor: Tools You Can Use

Kaizen, Six Sigma, and DMAIC - What’s so “easy” about these three terms? What do they mean?

Kaizen is a Japanese word. It’s derived from “kai,” which means “change,” and “zen,” which means “good.” The English translation is “continuous improvement.” The term refers to a system of productivity improvement, often relating to manufacturing. Six Sigma is a methodology originally developed by Motorola in the mid-1980s that aims to give businesses the tools they need to improve the capabilities of their processes. DMAIC is a methodology of Six Sigma designed to enhance existing business processes.

Its five steps - define, measure, analyze, improve, and control - together make up an incremental method of achieving structured problem solving. The DMAIC approach is systematic, scientific, and fact-based.

Six Sigma seeks to increase profits by eliminating the variability, defects, and waste that can undermine customer loyalty. It’s often defined as a method of decreasing “defects per (1) million opportunities.” But before your eyes start to glaze over, rest assured that you can use Six Sigma to achieve best practices without having to dig out your old notebook from that statistics course you took too many years ago. Simply focus on the philosophy at the heart of the methodology: reduce variation in your business, and make customer-focused, data-driven decisions.

When implemented correctly, well-designed business processes can virtually ensure efficient operations. In effect, they tell your staff “how” to run your practice. But you say that you already have a procedures manual at your office. Have you really looked at those documents lately? It’s likely that they’ve become very complex as you’ve tried to account for every variation and possibility that could arise in your office. And as you’ve attempted to combine procedures to gain a wider view of what it takes to complete a full process cycle, it’s likely that inconsistencies have emerged. Even if your staff consists of only your receptionist and you, you have different styles of working that you apply to the same tasks - leading to inconsistent results.

Lessons learned

What do we know about better-performing practices? They develop efficient processes and often incorporate technology solutions into those processes. In the MGMA report, “Performance and Practices of Successful Medical Groups: 2006 Report Based on 2005 Data,” Digestive Health Specialists in Winston Salem, N.C., tells its success story, the roots of which are in its approach to challenges and opportunities.

For example, in the practice’s billing operations, it breaks its processes down by function because it is not large enough to break them down by payer. By defining its billing objectives, measuring results, and analyzing alternatives, the practice has improved its processes, and it controls that improvement with continuous benchmarking. That’s DMAIC.

Continuous improvement is the Americanization of kaizen, which centers on teamwork. Too many claim denials led another practice in North Carolina to improve its processes. The group made a change in the office’s patient insurance verification process that resulted in 50 percent fewer denied claims. That’s the defect reduction concept at the heart of Six Sigma. Imagine what such a vast improvement could do for your profitability and employee morale.

The methodology to achieve incremental improvement, along with the team initiative required to put that methodology into action, can get you to the top of your game. Lean management is another element in your training regimen. Whether you want to capture all the patients in your market or hold tight at a controlled level and deliver the best services in the most efficient way, “going lean” can help you streamline operations, enhance customer service, bring new services to market, and deliver a competitive edge.

Lean programs - a concept closely related to kaizen - work to eliminate waste in each step within a process, including customer relations, service design, supply networks, and operations management. The goal is to require less human effort, less inventory (no gaps in the schedule), less time for service delivery, and less space. This gives a business room to be highly responsive to customer demand while also producing top-quality services in the most efficient and economical manner possible.

Transforming your practice’s management into a more efficient machine depends upon these basic business process reengineering theories.

Your office’s original processes were most likely created by someone without training in process engineering. As your business has grown increasingly complex, you’ve probably tacked on additional processes rather than redesigning the ones that already existed. This approach often results in inefficiencies that take their toll on your employees and the quality of care you provide.

The pace of progress means the nature of medical practices continually changes, and new technologies alter the feasibility of what you do and how you can accomplish your everyday tasks. To reach the top of your market and become a better performer, your management team must embrace the lessons of kaizen, Six Sigma, and DMAIC. In my experience, better-performing practices have three common traits:

• An effective physician-administrator management team (kaizen);

• Budgeting and control systems that monitor performance (Six Sigma and DMAIC); and

• Clinical staff, a business office, and physicians who focus on customer service (the whole package).

Apply these tools to your practice, and you can reach the top too.

Rosemarie Nelson is a well-known healthcare technology guru and principal with the Medical Group Management Association’s Health Care Consulting Group. She can be reached via editor@physicianspractice.com.
This article originally appeared in the April 2007 issue of Physicians Practice.