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Proposal to Develop a “Bright Ideas” Program at HSL

Prepared & Presented by: Chris MacFadyen, HSL Administrative Fellow December 18th, 2012

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“One has to assume first that the individual being at work knows better than anyone else what makes him or her more productive…”

- Peter F. Drucker

Source: Managing in Turbulent Times, 1980

“…even in routine work the only true expert is the person who does the job.”

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How Does the Program Work?

Employee has an Idea

Goal Aligned?

STEP 1

Submits idea via mailbox or email

STEP 2

Idea is reviewed by team of HSL experts

STEP 3

YES!

Archived

Team assigns Idea Champion to implement idea

STEP 4

Employee receives cash payment

STEP 5 NO

GOAL is to generate employee involvement in

identifying and implementing opportunities for process

improvement.

If Saves $

Recognition

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• Embodies Respect• Builds Trust • Encourages Ownership

PROMOTES CULTURE

• Streamlines processes and improves workflow

• Enhances resident / patient safety

IMPROVES QUALITY

• Potential to reduces costs / generates revenue

• Zero-budget impact

LOWERS COST

Why Implement Program at HSL?

Better Employee Engagement

Higher Resident Quality & Satisfaction

Stronger Earnings

Program will promote our cultural beliefs and improve employee engagement in process improvement efforts to improve quality and lower cost.

GOALS

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Background Structure & Design Financial Impact Implementation Q & A

Agenda for Today

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BACKGROUND

Background Structure & Design Implementation Financial

Impact Q & A

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Toyota achieved ascendancy through quality

Quality was achieved through unrivaled worker participation in process improvement

Replaced traditional “push” system of innovation with a “pull” system based on ideas generated on the front-lines

First Started at Toyota in 1950s

GOAL was to achieve continuous improvement through large numbers of small improvements.

Source: “How Toyota Pulls Improvement from the Front-Line”, HBR 2011

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From Manufacturing to Healthcare

Source: “The Role of Front-Line Ideas in Lean Performance Improvement”, 2009

Idea Programs and front-line engagement laid foundation for successful adoption of “Lean” in other industries such as healthcare (ex. Virginia Mason, ThedaCare, etc)

LEAN PERFORMANCE IMPROVEMENT

Creates a “lean improvement

culture” by engaging work force in daily

improvement

Taps opportunities for improvement that

are difficult to spot by managers

Promotes Rapid Organizational

Learning

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Lower Costs among all organizations, with average cost savings totaling $350 per employee per year.

Higher patient safety among healthcare organizations

What has been the Impact?

Newton-Wellesley

NHS Hospitals, UK

Active Ideas Programs

Newton Medical Center, KS

Kindred Health System

St. Luke’s Rehabilitation, WA

Sutter VNA & Hospice, CA

Source: “Return of the Suggestion Box”, Industry Week, 1998

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Changed flushers on Toilets to save water.

Reduced days of blood supply on hand to lower blood storage costs.

Changed size of sheet draped over ultra sound patients in Radiology to cut down on cost of soiled linens.

Idea Examples

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STRUCTURE & DESIGN

Background Structure & Design

Financial Impact Implementation Q & A

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Who is eligible to Participate?

ALL HSL EMPLOYEES!Including:Active VolunteersGroups of Employees – “Team Up”!

ELIGIBILITY: Participants

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Eligible ideas include all ideas that align with HSL’s organizational goals.

ELIGIBILITY: Ideas

Quality & Independence

Patient & Resident

Satisfaction

Employee Engagement Growth Earnings

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Ineligible Ideas include:

A problem with an unclear solution

A work-order

Ideas that are already current policy

Personal grievances and complaints

ELIGIBILITY: Ideas

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Employees can submit ideas in two ways:

- Mailboxes located at the workplace

- Email through Interoffice Email Address

SUBMISSION PROCESS

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COLLECTION & REVIEW

Ideas will be collected and reviewed monthly by a multi-disciplinary “Ideas Committee”.

Process Improvement

Healthcare

Finance

Development

Human Resources

IT

Housing

IFAREvaluation Criteria

• Goal Alignment• Feasibility• $ Impact• *Time-to-implement*

IDEAS COMMITTEE

*Priority

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IMPLEMENTATION PROCESS

Assigns an Ideas Champion

Determines action plan, timeline, and cost-

savings

Employee receives $ payment

Team is assembled and idea is implemented

IDEAS COMMITTEE

IDEAS CHAMPION

EMPLOYEE

Receives notification of time-to-implement and

cost-savings

If Saves $

TEAM

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REWARD & RECOGNITION

All employees will be rewarded with recognition and letter of acknowledgement thanking them for their contribution.

REWARD STRUCTURE

For Cost-Savings / Revenue Generating Ideas: Up to $1,000

$1,001 to $5,000

$5,001 to $10,000

$10,000 and more

For all Other Ideas

$ Reward$100

$250

$500

$1,000

$100

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FOR YEAR 1

Submission: 200 Ideas

Implementation: 15%

% of Cost-Savings Ideas: 50%

GOALS

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FINANCIAL IMPACT

Background Structure & Design

Financial Impact

Implementation Q & A

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Assumptions: Start-Up Costs: ($2000) $ per cost-saving idea: $1,000

NPV of 5 year Cash Flows

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Cost-Savings / Cash Inflows 15,000 15,000 15,000 15,000 15,000

(Less Employee Payout) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500)

Discount Rate 5% 5% 5% 5% 5%

Discounted Cash Flows 12,825 12,825 12,825 12,825 12,825

5 Year NPV of program = $62,125 with pay-back period of > 1 year

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IMPLEMENTATION

Background Structure & Design Financial Impact Implementatio

nQ & A

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Implementation Timeline

FY 2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct

PHASE 1

PRE-LAUNCHCreate Buzz and Inform Department Heads

LAUNCHHost Kick-Off

PHASE 2

PARTICIPATEFocus on Employee Participation and turn-around time.

1ST 6 MONTHS

PHASE 3

SUSTAINMaintain participation and encourage innovation.

6 MONTHS & BEYOND

1st Week in February

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Critical Success Factors

High Employee Participation

Early On

Focus on Quick Turn-Arounds

Strong Executive Support

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In Conclusion

Promotes Culture

Improves Quality

Lowers Cost

A “Bright Ideas” Program is a budget-neutral “win-win”.

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QUESTIONS?

Background Structure & Design Financial Impact Implementation Q & A

Healthcare Organizations with Active Ideas Programs

SIZE LOCATION

Newton Medical CenterReceived 163 ideas, implemented 63 resulting in $1.7mil in cost-savings 103 Bed Hospital Newton, KS

Hartford HealthcareReceived 496 ideas from 168 employees in three weeks

Multi-facility Healthcare system Hartford, CT

NHS Hospital, UKImproved patient safety and the clinical process surrounding monitoring vitals (Benning et al. 2008)

Multi-facility hospital system UK

Kindred Healthcare Inc. Multi-facility post-acute Nation-wide

Newton-Wellesley Hospital 313-Bed Medical Center Newton, MA

St. Joseph’s Hospital 607 Bed Medical Center Phoenix, AZ

Cheyenne Regional Medical Center 214 Bed Medical Center Cheyenne, WY

Sutter VNA & Hospice Home & Hospice Provider Multiple locations in CA

Franciscan Health System Multi-Facility Hospital System Tacoma, WA

St. Luke’s Rehabilitation Multi-facility Rehab System Spokane, WA

Sarasota Memorial Hospital 806 Bed Medical Center Sarasota, FL

Delnor Health System 150 Bed Medical Center Geneva, IL

Elk Point Healthcare Center 46 Bed Post-Acute Hospital Alberta, Canada

Port Huron Hospital 106 Bed Medical Center Port Huron, MI

Submission & Review Process

Implementation Process

Recognition & Reward Process

REVIEW: Score Card

WORKFLOW: Submission & Evaluation