|
Cost-reduction strategies with Chip Caldwell, FACHE
Chip Caldwell, FACHE, is president of Chip Caldwell & Associates, where
he specializes in advanced cost recovery methods using Six Sigma, Cost
of Quality/Cost of Poor Quality, and Match Staffing to Demand techniques.
His 100-Day Plan accelerated methodology aids organizations in identifying
and tracking improvements in patient safety, quality, and cost recovery.
Board certified in healthcare management and an ACHE Fellow, he is also
co-presenter of the ACHE seminar "Aggressively Improve Cost, Quality and Throughput," and an author
of three books on medication error reduction, cost reduction, and quality
management, including the upcoming Health Administration Press book
Medication Errors and Cost Recovery:
A Four-Step Approach for Executives.
Click on a link below or scroll down to read the questions posted for Mr. Caldwell
as well as his responses:
mcfadden- 05:04pm Jun 8, 2001
Using the 100-Day methodology, what can an organization reasonably
expect to achieve in the first 100 days? Will that organization see
any measurable results in terms of cost reductions during that time
frame?
-
Caldwell's response - 04:06pm Jun 13, 2001 (#1 of 1)
First, remember that we are not setting up just one 100-day execution
period, but a process of execution and readjustment of the goal
every 100 days. The first 100 days of a 100-Day Plan deployment
usually is devoted to getting to know the process of monthly executions
and understanding the concepts of Matching Staffing to Demand.
After the first 100 days, however, an organization can expect
quantum results. One organization that had reduced expenses the
prior year, achieved a 10% FTE reduction in the first 6 months.
These results are the exception, but doable. Success of quantum
improvement, using the 100-Day Plan depends on 4 factors:
-
-
Executives must be clear with managers of the aim. "Each manager to reduce
4% operating costs, while maintaining patient satisfaction, by
12/31/01". Waivering on this point is the first sign of collapse.
In fact, at the above referenced organization, the last 100-Day
Plan "wave" resulted in only 0.8% cost recovery. This was because
senior leadership did not stick to a clearly defined expectation,
with appropriate rewards and consequences.
-
Presence of an inexhaustable database ideas to implement - the Match Staffing
to Demand database of 15 concepts with approx 50 specific ideas
and tools (like those found on our website for free download at
www.chipcaldwellassoc.com/resources).
-
Managers implement one small process change from the database every 30
days. This requires breaking down those lofty, often impossible
big projects into "what can you do by next Tuesday?"
-
Making success visible. Each month, managers score themselves 1-5 based on the
degree of progress toward the goal. Keep these scores visible
to accelerate results.
-
By following this process, executives can expect transition from the current
slow rate of execution to quantum improvement.
sevy-majers - 03:40pm Jun 16, 2001
I am particularly interested in how technology can assist in the
reduction of costs, particularly clinical technologies such as that
of the electronic medical record. I believe that cost reduction
can be achieved, but only with process changes. Have you any ideas/
information about anyone who is doing/ has done cost benefit analyses
or ROI models for clinical information systems?
Joan Sevy-Majers, MS, RN, FACHE
-
Caldwell's response - 04:18pm Jun 21, 2001 (#1 of 1)
Automation is one of seventy idealized design techniques customarily
used by design engineers. The step to achieve cost savings is
called cost recovery (see my upcoming book, Medication Safety
& Cost Recovery, Health Administration Press, Aug 2001). A major
caveat, however, is that technology vendors generally do not have
the skills to help uncover where these savings can occur. EMR
is one of the major opportunities; however, your engineers (not
IT) will have to help uncover these opportunities. Because each
organization is unique, it is difficult to apply a "cookie cutter"
cost recover application. The process is not difficult, however.
It involves flowcharting the current process and identifying steps
that will be removed once the technology is installed. Then, managers
can adjust staffing to account for the saved time from the elimination
of these steps. For a free download of a form used for this purpose,
visit www.chipcaldwellassoc.com/resources.
We are working with a client on revenue cycle and two subprocesses
will be automated. An adjudication process, in which 21 FTEs will
no longer be needed, and an electronic charges entry, in which
5.5 FTEs can be reassigned.
|
