Panel: How Value Stream Analysis Can Shore Up Your Revenue Cycle

The use of Value Stream Analysis (VSA) as a lean healthcare methodology was presented by Melanie Cline, RN, MSN, LPC, Purdue Healthcare Advisors’ Senior Advisor-Lean Healthcare, who moderated a panel at the Annual Meeting of the Indiana Rural Health Association this past week in which she explained the challenges faced by four Indiana Critical Access Hospitals as they used VSA to tackle problems within their respective revenue cycles.

The four panelists were Andy Aldred, PharmD, from Cameron Memorial Community Hospital in Angola; Will Fox, PT, from Pulaski Memorial Hospital in Winamac; Wendy O’Hair, RN, from Putnam County Hospital in Greencastle; and Dawn Gabrich, MS, LAT, ATC, from Woodlawn Hospital in Rochester.

Melanie has consulted with these and 10 more hospitals over the past three years as part of the Lean Healthcare Transformation Initiative. She began the presentation by explaining Value Stream Analysis, which is a higher-level lean tool designed to evaluate the entire value stream – from the beginning of the customer experience to the end. Value streams exist with the emergency department; the supply chain; cardiovascular services; outpatient; perioperative services; etc. Analyzing a value stream helps lean teams decide what improvements they want to focus on for the best results. Once their plan is in place, teams facilitate improvement events and projects aimed at increasing targeted metrics. Lean Daily Improvement (LDI) is implemented as a way to sustain those gains.

 

What was the focus and results of your VSA?

Andy:  We focused on the revenue cycle of the hospital only, not the physician clinics. From the VSA, we went on to conduct seven (7) Rapid Improvement Events (RIEs); 10 projects; and 15 “Just Do Its.” Our unbilled claims were reduced from $6.4M to $2M. Our AR days dropped from 72 to 56.

Will: We learned that the revenue cycle is huge, and that we needed to boil it down. Although our lean team really wanted to improve lean engagement across the hospital, we zeroed in on the low-hanging fruit, which involved prior authorizations, insurance eligibility, and medical necessity. We conducted three RIEs resulting in a decrease in write-offs of more than 41%.

Wendy: We focused our revenue cycle improvements on front-end work; standardization of the charge master as we had multiple feeder systems dumping into it. Our error claims were reduced as we got better at getting the codes correct in the first place. We shaved off a few AR days as they were reduced to 45, and we saw an increase in net revenue.

Dawn: We focused on claim adjudication. While conducting our five (5) RIEs, we began to realize that if you can create a culture of change, you can begin to dig deeper into process-improvement barriers. From our efforts, the hospital’s denied claims were reduced by 22%; AR days reduced by 23%; and upfront collection increased by 18%. 

 

What challenges did you face as you moved toward your goals?

Andy: We had just changed to a new EHR and had to figure out our baselines. We also had some challenges with overlap from a second VSA involving scheduling of our urgent care services. In addition, we had just added several new physician clinics.

Will: During our VSA, we lost both our CFO and our revenue cycle manager; then replacements changed the definitions regarding how certain metrics were calculated. This forced the team to figure out how to be more fluid in its lean approach.

Wendy: Our lean improvement team turned over twice, and that led to our reprioritizing our projects in order to keep the momentum going.

Dawn: As we delved into our revenue cycle, we realized the problems we were seeing were just the tip of the iceberg. When we initially mapped out our value stream, we didn’t really know our true metrics.

 

What aspect of lean was the most difficult to implement?

Andy: Because we focused on work being done in the back offices, the people who worked there were new to lean so we got some initial push back who felt that the improvement efforts weren’t worth their time. We had to figure out how to engage these workers…make it worth their while.

Will: With Lean Daily Improvement (LDI) comes the visual management board, which is a great self-monitoring tool but also takes time, as any new habit does, and was initially construed as just more work for the staff. We needed to get the staff to trust the process and one of our biggest selling points was the promise of less re-work.

Wendy: In healthcare we’re already considered to be “huddle experts.” We huddle for everything, and another daily huddle ― this time for LDI ― created some resentment and fear from people thinking they would be criticized for poor daily metrics instead of just using them as a way to stay on track. But after the second huddle, that fear dissipated.

Dawn: Scheduling those first RIEs, getting department directors to allow us to access their frontline staff…that was something we really had to work through by breaking down barriers and building relationships across departments. The bonus was that lean work with frontline staff left them empowered to create positive change and that reflected well on their departments.

 

Describe one of your “Aha!” moments?

Andy: Most of our Eureka moments came in the form of “Why didn’t we know that before?” One unexpected improvement came by way of physician orders, specifically what constituted a legal, signed order. There were discrepancies that we were able to resolve through tweaks to our policy.

Will: People involved with the value stream improvements were all surprised by how what they were doing affected what happened downstream from them.

Wendy: The gemba walk [gemba stands for “go and see”] really shed some light on process problems. As we watched frontline workers do their jobs, we were able to ask them why they were doing certain things, and sometimes all they could say was “I’ve always done it this way.” it was a great tool at revealing things that workers do inherently, things they are not even aware they are doing.

Dawn: Getting the coders and the billers and the patient access people in the same room opened up the lines of communication, and they are still open. People feel comfortable to shoot emails to each other to more quickly resolve billing problems. The denial tracker we started is now in real time and we are rolling it out to departments to promote accountability and prevention of future denials.