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Journal of the Academy of Hospital Administration

Title: A strategy for successful TQM in a Corporate Hospital - A


Study using Six Sigma

Author(s): B. Krishna Reddy*, M. Arundhathy**, GVRK. Acharyulu**

Vol. 14, No. 2 (2002-07 - 2002-12)

Abstract:

Globalization and privatization of health insurance have changed the functioning of


health care system ? old models need to be redesigned. As today's competitive
environment leaves no room for error, we need to delight our patients and customers
relentlessly and look for new ways to exceed their expectations with a focus on
continuous improvement in technical skills, human skills and to develop cost effective
methodologies. This is one of the reasons why six sigma is becoming a part of the
hospital culture. The concept is still in its nascent stage in Indian health care system. six
sigma is a scientific concept, provides measurement of every activity in the hospital by
using various statistical tools. The strategic implementation of the concept would result in
delighted customers; develop outside in thinking; leadership commitment; empowered
employees and develop customer centric culture in the organisation. This paper attempts
to study six sigma aspects in the ultrasound department of a corporate hospital.

Keywords: Total quality management (TQM), six sigma, waiting time.

Key Messages:

* In the current competitive environment, six sigma technique is becoming a part of the
hospital culture.

*Significant reduction in waiting time, leading to a substantial improvement in quality of


service at the Ultrasound Unit of a Hospital can be achieved through Six Sigma approach.

*Total Quality Management concepts and methodologies would help in strandardizing


the medical care activities across hospitals.

Introduction

Today, focusing on the customer has become absolutely essential. Of course, we all
recognize this, but do we really internalize the idea? Do we really believe that such a
focus has the potential to drive business growth and show impact on the level of customer
satisfaction, which we should come to expect?
Closely linked to the idea of customer satisfaction is the concept of operational
excellence - the kingpin of success. Without the focus on excellence it may be easy to
obtain 80-90 percent efficiency level and being the best means embracing change and
reaching out for new and higher standards of performance.

Another way of looking at this would be to say that our performance as a hospital is
governed by the quality of our processes ? high quality process delivers high quality
service, at the lowest possible cost and on time -the concept of Total Quality
Management(TQM). Therefore, a focus on operational excellence in everything we do
translate the focus on the quality of the service provided.

Trying to improve some thing when we don't have a standard to measure against and
improve a process without measuring the current status is like playing a game without
knowing the score. Measurement and improvement of the processes are absolutely
essential if we are looking at operational excellence.

If you can't express something in the form of numbers, you don't really know much about
it. If you don't know much about it, you can't control it, and if you can't control it, you're
at the mercy of chance. From this perspective, the concept of six sigma plays a vital role
in achieving operational excellence in any organisation.

What is six sigma?

Sigma (o) is character of the Greek alphabet, which is used in Mathematical Statistics to
define Standard Deviation. Standard Deviation, a measure of dispersion (spread),
indicates how far away a measured result is from the average (the center of data).

Six Sigma is a business concept that answers customers' demand for high quality and
defect-free processes. The customer satisfaction and its improvement is usually assigned
with the top priority of any service activity. In other words, Six Sigma is about
abandoning the uncertainty of goals and forecasts.

Six Sigma is a method for improving quality by removing defects and their causes in
various processes and activities. It concentrates on those outputs, which are important
to customers. The method uses various statistical tools to measure service processes. In
technical terms, Six Sigma means that there are 3.4 defects per million events. The main
goal is continuous improvement. It provides specific methods to recreate the process so
that defects and errors never arise in the first place.

While six sigma is a long term and forward thinking initiative designed to fundamentally
change the way the hospital provide services, it is first and foremost designed to generate
immediate improvements to patient satisfaction as well as to increase profit margins.
Historical perspective

There have always been many statistical methods for measuring and improving quality.
The concept of Six Sigma was developed first by Mikel J.Harry in connection with
quality program at Motorola in 1987. The program gained importance when Motorola
won the Malcolm Baldrige quality award. Further development took place in the turn of
the decade in ABB where Harry worked as a vice-president in-charge of quality systems
development.

According to Jack Welch, General Electric's 1996 Annual Meeting - "GE Quality 2000
will be the biggest, the most personally rewarding, and in the end, the most profitable
undertaking in our history. We have set for ourselves the goal of becoming by the year
2000 a six-sigma quality company, which means a company virtually, defect-free
products, services and transactions".

The various other Companies adopting the concept of Six sigma for continuously
improving their performance include: Texas instruments 1988, Kodak 1995, Sony 1997,
Nokia 1997 plus over 50 companies are sharing the best practices of six sigma.

Need and importance of six-sigma

According to Gemmel et al (1995), to survive in the next decade it becomes increasingly


important for the hospital managers to better manage their resources, whereby attention
will focus on the issues of quality management and concepts of improving effectiveness
of service delivery. The author notes that to achieve improvements, hospitals should not
concern themselves with spending money, but in reality identifying and meeting patient
needs. The most relevant TQM strategy to identify the customer requirements is through
the process of Six Sigma, which focuses primarily on the voice of the customer.

Over the last ten years there has been a tremendous increase in references and interest in
quality assurance as it applies to health care. World Health Organization (WHO) working
group on quality assurance discerned four sets of reasons: Economic, Social, Political and
Professional (WHO,1995). Demand for health care is increasing. Not only are people
living longer and requiring care over a longer period and into a extended old age but also
expectations are rising through education and general interest. There is increasing
emphasis on value for money and cost effective solutions.

The traditional concerns and methods have changed in recent years because of changes in
the health care and in society. Firstly, health care has become more complex. A patient
suffering a heart attack will come in contact with many doctors and other professionals in
the episode of care. Secondly, change is evident in patient's expectations and traditional
authority relations in society have changed and there is increasing consumerism where
the patients expect to be told what is being provided for them and to have redress if the
service falls below standard. Third, those paying for health services have become more
concerned about rising health care costs and possible inefficiencies.
Across the world, patients, payers and the governments are increasingly concerned about
the quality of health services. Various approaches are being used to ensure and improve
quality. TQM is one approach which promised to improve quality, reduce costs using the
Concepts of Quality Circles, Quality Improvement Teams and JIT tools. Application of
these tools is found to have some success under certain conditions. They emphasize on
outcome measures than process based measures. The impact of the these concepts was
not directly felt by the consumers. These systems could not provide importance to
customers perception and requirements.

Six Sigma concept mainly depends on improving the quality of internal process as per the
requirements of the customers and validate the process as per the expectations of services
and hence is relevant for the health care industry. Today's competitive environment calls
for customized quality services for sustenance in the industry and focus on continuous
improvement in technological, human resource skills and cost effective methodologies.

Researchers have found that 4 percent of hospital patients suffer from avoidable injury
(Brennan et al., 1991), 7 percent experience a medication error and 45 percent experience
some medical mismanagement (Andrews et al., 1997). In a recent study of Andrews it is
found that 8 percent of anesthetic errors are due to human error and 92 percent are due to
system errors. These findings show that there is a greater scope for improvement in
clinical quality.

Methodology

Six Sigma is carried out as a project. The most common type is the "DMAIC" method
(Define, Measure, Analyze, Improve, Control). First, the project and the process
targeted to be improved are defined, after which the performance of the process is
measured. The data is then analyzed and bottlenecks and problems are identified. After
analysis, improvement program is defined and defects are removed. This development
program is controlled by a management group. After DMAIC circle it is time to define a
new project.

The various activities involved at each stage includes:

Define: Project Critical quality factors Approved charter High level process map

Measure: Project the main Y (s) (The Main Out Come = Waiting time at Ultrasound)
Identify performance standards of (Y) Data collection plan and validate measurement
system Data of (y)s Performance capability of (y)

Analyze: Prioritized list of all X's (all Factors lead to Y under the Principle of Y= f(X1,
X2, X3)
List of vital few X
Quantify improvement opportunities
Improve: Confirm vital X's
Develop optimized solution
Confirmed solution
Six sigma risk assessment plan

Control: Sustained process


Project documentation
Translated learning's

Principles of Six sigma includes:


Communication, Implementation of best practices -Six Sigma process repository,
Industry-independent concept, Emphasis on technical excellence as well as human ability
and Statistical approach.

Steps To Process Management:

Balanced Score Card (BSC) is a concept helps to translate strategy into action. BSC
provides organizations with a comprehensive picture of business operations and a
methodology that facilitates the communication and understanding of business goals and
strategies at all levels of an organization. Once the vision and mission are clearly
established in the organisation with a complete commitment on quality management , the
complete knowledge of the present systems and their functioning is established and a
knowledge base is created for the organisation and a detailed study on the process
management where the business processes and their output is interfaced with your
customers. Modeling and analyzing the processes enables to develop the organization and
improve its effectiveness and quality of work. Managing the key processes efficiently is
critical to the success of the company where all the processes are documented the
effective functional organisation with operational excellence can be obtained using the
concept of activity based costing.

Steps Involved in Implementing Six Sigma Concept in a Hospital


Include:

• Identification of the customer expectations


• Identification of various processes involved in the system
• Develop a Quality Function Deployment(QFD) for a hospital
• Identification of processes Critical to Quality(CTQ)
• Identification of areas in CTQ for improvement
• Develop project definition along with time frame and expected outcome as per the
customer Expectations
• Follow DMAIC process of the project
• Complete the project, record findings and explicit benefits
• Choose another project.

When a hospital strategically plans to implement the six sigma concept for operational
excellence, steps should be taken to study the existing process and to identify the
customer Expectations with regard to the availability of services. This enable
identification of all-critical areas need to be focused. Once the focus is established and
the project is chosen then, DMAIC process is on.

An exploratory pilot study is under taken to identify the customer Expectations in


ultrasound department of the hospital, which plays a significant role in customer
satisfaction index of the radiology department.

The focus was established on the Total Turnaround time of the procedures as the
significant requirement of the customer. Hence the project has been defined to study the
present turn around time and identification of the causes of delay in ultrasound
department. As communication of the procedure plays a significant role in managing the
turnaround time, we have assessed the communication levels at the department by
adopting a questionnaire.

Data Collection:

A standard template is designed to study the turn around time for a period of three days
with a sample of 60 cases and a communication assessment questionnaire is adopted for
these three days simultaneously. The components of Turn Around time observed during
the study includes:

1. Waiting time: The time when the patient waits for the procedure after providing
the requisition slip to the concerned secretary,
2. Procedure time: The time taken for performing the procedure, and
3. Reporting time: The time taken in preparing the report and is ready for dispatch
after the completion of the procedure along with the assessment of the
communication levels of the department.

Descriptive analysis:

The primary data obtained from templates is analysed descriptively.

Descriptive Statistics of waiting time

Waiting Time (Anderson-Darling Normality Test)


A-Squared: 2.486
P-Value: 0.000
Mean 49.7000
StDev 38.2127
Variance 1460.21
Skewness 1.00438
Kurtosis 0.104997
N 60
Minimum 5.000
Ist Quartile 20.00
Median 32.500
3rd Quartile 75.000
Maximum 150.00

The analysis shows mean waiting time of 49.7 minutes with a standard deviation of 38.21
minutes. The frequency distribution diagram reflects that a patient waits anywhere
between 5 minutes to 150 minutes for getting their procedure done. It also shows that
most of the patients are waiting for longer times as the distribution is positively skewed
(1.004).

Procedure time:

Descriptive Statistics of Procedure time

Procedure Time - (Anderson-Darling Normality Test)


A-Squared: 1.524
P-Value: 0.001
Mean 14.8500
StDev 5.0984
Variance 25.9941
Skewness 0.365591
Kurtosis -7.0E-01
N 60
Minimum 7.0000
Ist Quartile 10.0000
Median 15.0000
3rd Quartile 20.0000
Maximum 25.0000

Descriptive analysis of procedure time shows mean waiting time of 14.85 minutes and
standard deviation of 5.09 minutes with a range of 7 minutes to 25 minutes.

Reporting time:

The reporting time is scheduled at the evening for all the reports hence the timings are not
done in the initial study, but over all analysis of voice of the customer done for the
hospital indicated the need for reducing the reporting time. The data provides the
summary of the total turnaround time taken for all the patients with Upper Specification
Limit(USL) is taken as 45 minutes. The USL is decided in consultation with the
concerned Head Of the Department(HOD) and by taking into consideration that the
maximum time taken includes even if the patient comes for the investigation with empty
bladder. The following diagram show the number of patients who have spent more than
45 minutes in the department which are defined as defects as per the six sigma
methodology.

The sigma value of the Turn around time of current ultrasound process is calculated as
1.5 sigma short term from the statistical software package MINITAB and the out-put
result is shown below. 1.5 sigma shows around 87% of the times the process is within the
upper specification limit.
Report 8 B: Product Benchmarks, Zone of Average Technology

Z.Bench (Short-Term)

Analysis of the questionnaire for assessing the communication levels of the personnel in
the ultrasound department shows:

• The patient is not informed about the prior preparation of the test in 50% of the
total sample.
• Communication regarding the queries from patients to doctor is not very
satisfactory (35%)
• Privacy is not maintained to the satisfactory levels (Observation)
• Details of the procedure are not informed in 50% of the cases

A cause and effect diagram is drawn to identify all the possible causes of delay.

A cause and effect diagram drawn to identify all possible causes of


delay:
Failure Mode and Effect Analysis:

To prioritize the list all possible causes in cause and effect diagram, a TQM tool named
Failure Mode and Effect Analysis (FMEA) is done which identifies all the important
causes using the parameters of Frequency of occurrence, Impact on the system, critical to
the customer on a scale of 1-10. The Risk Priority Number (RPN) generated by
multiplying the three parameters and dividing them by three, and this RPN indicates the
most important causes when not attended would lead to failure of the system in the long
run. The causes thus identified are:

• Bladder not full. 192


• Patient not informed of the 170 prior preparation.
• Number of people waiting are more. 149 - Doctors not available 112
• Reports are given in the evening even if 80 only ultrasound procedure is
performed.
• No proper scheduling of In Patient and 72 Out Patient
• No allocation of work load 70

Various measures implemented to improve the turn around time of the process includes:

• Developing a leaflet which would explain the prerequisite of the procedure.


• Scheduling all the In Patient cases requiring fasting in the morning before 9.30 am
and the other In Patient cases along with Out Patient cases in the afternoon to
avoid waiting time.
• Scheduling the doctors to ensure at least two doctors are made available at any
point of time.
• Reorganizing of the reporting procedure to make available the reports within 45
minutes of completion of the procedure.

Post implementation analysis:

After the implementation of the suggestions given by the team an improved data is
collected to study the turn around time in the department.

The improved data significantly depicts the reduction of the waiting time and reporting
time and increase in the sigma level by 1.2 as against 1.5 in the earlier study with
increase in the efficiency levels to 98% and to achieve the level of six sigma the
efficiency rate should be 99.99999999% (3.4 defects per million cases)

Descriptive Statistics of waiting time (Improved Data)


Waiting Time (Anderson-Darling Normality Test)
A-Squared: 1.101
P-Value: 0.006
Mean 34.2000
StDev 17.5217
Variance 307.010
Skewness 0.572863
Kurtosis -4.9E-01
N 60

Minimum 10.0000
Ist Quartile 20.0000
Median 32.5000
3rd Quartile 45.0000
Maximum 80.0000
Descriptive Statistics of Service time (Improved Data)

Service Time (Anderson-Darling Normality Test)


A-Squared: 1.674
P-Value: 0.000
Mean 12.9333
StDev 3.8262
Variance 14.6395
Skewness 0.327038
Kurtosis -8.7E-01
N 60
Minimum 75.0000
Ist Quartile 10.0000
Median 12.5000
3rd Quartile 15.0000
Maximum 20.0000

Descriptive analysis of procedure time shows mean waiting time of 12.9 minutes with the
reduction by 2 minutes from the earlier time and standard deviation of 3.8 minutes with a
range of 7 minutes to 20 minutes.
Descriptive Statistics of Reporting time (Improved Data)

Reporting Time (Anderson-Darling Normality Test)


A-Squared: 0.568
P-Value: 0.135
Mean 35.6000
StDev 11.6593
Variance 135.939
N 60
Minimum 10.0000
Ist Quartile 25.0000
Median 36.0000
3rd Quartile 45.0000
Maximum 62.0000

At present all the Out Patient reports are given within 45 minutes after the procedures and
the In Patient reports are given within 120 minutes to the wards and in case of emergency
they are given within 10 minutes after the procedure.

Conclusions

1. Strategic implementation of the Six Sigma concept with complete involvement of


the top management would pave the way for quality and measurement oriented
culture in the health care sector, the most needed change in the present scenario of
Globalisation and Liberalisation.
2. It helps every employee to think and measure their work from a positive
perspective, which would directly reflect on their appraisals. The scientific
methodology adopted would provide recognition, scope for assessment of the
activities and continuously improve the processes to achieve consistent long-term
gains for the organisation.
3. The Present study indicates that a significant reduction in waiting time, the key
area of concern to the patients (customers), leading to a substantial improvement
in quality of service at ultrasound department can be achieved through Six Sigma
process.

The Summary of the total times before and after the implementation of
the concept is shown below.
Six Sigma Waiting Procedure Reporting
process Time(minutes) Time(minutes) Time(minutes
Implementation Mean S.D. Mean S.D. Mean S.D.

Before 49.7 38.2 14.8 5.09 NA NA


After 34.2 17.5 12.9 3.8 35.6 1.6

India is emerging as one of the healthcare destinations of the world, TQM concept would
help in standardizing the medical care activities across hospitals.

References

1. Gemmell, P.Van Dierdonck, R. (1995)" Service requirements planning in


Hospitals"'in Tear,R. And armistead.,C, Service management;New directions ,
cassell, London.
2. John Overtveit 1999, " International Journal of Health Care quality assurance,
MCB university press.
3. Roger Ellis and Dorothy Whittington, Quality Assurance in health care - hand
book, Edward Arnold a division of Hodder and Stoughton London 1993.
4. Mikel Harry, Ph.D. and Richard Schroeder, Six Sigma-The Breakthrough
management strategy revolutionizing the World's top Corporations, Doubleday a
division of Random House.Inc., New York, 2000.
5. Mike Carnell, Understanding six sigma deployment failures ,
6. www.is.sixsigma.com
7. www.isixsigma.com

* Associate Professor in Business Management, Osmania University, Hyderabad-500007,


** Faculty, Apollo Institute of hospital Administration, Jubilee Hills, Hyderabad 500033