CEO SUMMARY: As part of a major restructuring program under way at Christian Hospital in St. Louis, Laboratory Administrator Bette J. Stanley decided to apply Lean quality management methods in projects to improve work processes in phlebotomy and the chemistry department. Using internal quality consultants from the parent health system, the laboratory staff applied Lean methods and significantly reduced average lab test turnaround time while posting major gains in productivity.
WHENEVER A NEW LAB DIRECTOR comes into a financially-struggling hospital with the goal of turning around laboratory operations, he or she invariably faces the classic list of clinical lab challenges: greater demands, fewer resources, and explosive changes in medicine and technology.
“That’s certainly what I found when I became the Administrative Director of Laboratories at Christian Hospital (CH),” stated Bette J. Stanley. “The equipment was dated, the laboratory space was cut up, work flow and work processes were inefficient, and the laboratory’s budget was limited.”
CH, part of BJC HealthCare (BJC) in St. Louis, Missouri, is a two-hospital, non-profit, 493-bed acute care and outpatient facility. “The hospital was built in 1975,” stated Stanley. “It was considered very modern at that time and was doing quite well.”
But by the late 1990’s the hospital was in the red. “In 2000 the hospital initiated ‘Recovery 2000,’ a major restructuring program to turn things around,” recalled Stanley. “Part of the Recovery 2000 strategy involved cutting the Network Reference Laboratory’s (NRL) nursing home business. This meant losing 175 nursing homes—and big layoffs in the phlebotomy staff. Upon my arrival in June 2002, I found a group of highly dedicated laboratory personnel in an atmosphere of very low morale.”
“The first thing I did as administrative director was to involve the staff, from top to bottom, in creating a new vision for the lab,” recalled Stanley. “Staff involvement in this process renewed the sense of empowerment that had been missing since the earlier layoffs. Morale started to recover.
“As a team, we studied the existing problems and jointly developed a strategy. Our themes became ‘Renovate. Automate. Skinny down—Develop a Quality Management System (QMS)’,” she explained. The management team was reorganized and we divided the lab into three divisions: Core Lab (24/7 testing), Special Procedures (those areas that were not open 24/7), and the Network Reference Lab (our outreach program).”
Prior to assuming leadership at the CH laboratory, Stanley had worked for 21 years at St. Louis University Hospital, moving from Chemistry Supervisor to Laboratory Director. “One of my references for quality standards and procedures was the Clinical and Laboratory Standards Institute [CLSI, formerly NCCLS],” Stanley stated. “Our blood bank supervisor, who had developed the blood bank’s quality plan, became our team leader for our Quality System Team (QST). We devoted much effort into developing the Quality System Essential policies as the framework of our QMS.”
Learning About Lean
In the spring of 2003, Stanley attended THE DARK REPORT’s Executive War College on Laboratory and Pathology Management in New Orleans. “It was the first time I was able to learn detailed specifics about the use of Lean and Six Sigma methods,” she noted. “Although one of our hospitals’ surgery departments had already undergone a Lean makeover, there was nothing at BJC to alert departments system wide of the available in- house quality improvement programs.
“I was impressed with the information on Lean and Six Sigma presented at the Executive War College,” recalled Stanley. “It was a new way of thinking—a new way of seeing what goes on in the laboratory. I knew I could use this knowledge as a platform for streamlining our entire lab- oratory operation.”
Stanley began studying Lean and Six Sigma methods. In the fall of 2003, she attended a workshop on Lean and Six Sigma techniques offered by the ValuMetrix team at Ortho-Clinical Diagnostics.
As she gained more knowledge in these quality improvement methodologies, Stanley launched her staff into their first Lean projects. “Our goal was to eliminate waste and increase productivity in the lab,” she said. “At CH, that meant further reductions in FTEs. To achieve that result, we agreed on five management tactics: 1) redesign the lab around central processing; 2) remove walls for better communication; 3) automate for efficiency and better TAT; 4) increase capacity and decrease need for more staff; and, 5) reduce staff through attrition and retirement.
“With assurances that every effort would be made to avoid any major layoffs, the lab team accepted the proposed cuts in personnel as essential to achieving the desired goal of a financially sustainable laboratory,” explained Stanley. “The average age of our staff was around 50. We developed a strategic plan around natural attrition and redeployment of personnel to other areas of the hospital—instead of layoffs.
“At the time I came on board, the CH lab was in the middle of implementing a new McKesson LIS system, which caused us to rethink certain aspects of our business,” she continued. “The outreach program, which had been established in 1985, had been going downhill. We decided that having the laboratory do its own outreach billing was a big part of the problems in our outreach program.
“We decided that, instead of administering a billing system on our own, we would choose an external billing company to do all our outreach billing and collections,” explained Stanley. “We went live with Horizon LIS and an interface to Quadax (our external billing company) in November of 2002. The billing company would maintain the NCD and LCD updates. Therefore, we only needed to work the failed medical necessity and CCI edits on the back end. These new arrangements allowed us to reduce the billing staff from 10 FTEs to just two FTEs.
“Next, we needed money to make the necessary changes in the laboratory,” noted Stanley. “We submitted a proposal for our Lean lab makeover to administration. It demonstrated savings of more than $3 million over a seven-year period. It took about five months of collaboration with the finance department and the architects to get approval to tap a BJC contingency fund for the $1.4 million project.
Lean Project #1
“Our first target for a quality improvement makeover was the phlebotomy department. This made sense for three reasons,” said Stanley. “One, we needed to look at the laboratory’s work flow in its entirety and phlebotomy is the first step. Two, we wanted to satisfy our physician-customers by having test results from all morning draws on the charts by 8:00 a.m.
“Three, we knew that improvements in phlebotomy would help the analytical segment,” she continued. “Pre-analytical is generally the most time-consuming part of the overall work process. We knew that, by streamlining work processes in phlebotomy, we stood to achieve significant gains in turnaround time (TAT).”
With the help of the Lean/Six Sigma black belt trainer from BJC corporate, Stanley’s Lean team studied phlebotomy’s baseline work processes. “For one week, a Lean team member followed five different phlebotomists around—a different one each day—with a video camera and a stop watch,” recalled Stanley. “Each phlebotomist wore a pedometer. We timed every process and counted each footstep.”
“We immediately identified three significant opportunities to eliminate waste: 1) supply trays: 2) batching; and, 3) personnel deployment.”
Solution #1: Supply trays. “First, our baseline observation showed that some phlebotomists were placing the supply tray on the patient’s sink. This one simple habit often doubled the number of steps required to perform the draws. We switched to using standardized phlebotomy carts, instead of trays,” explained Stanley.
“Second, our baseline observation showed that some phlebotomists spent additional time deciding what supplies to take into the patient’s room,” she continued. “We cut wasted time here by equipping each phlebotomist with a fanny pack containing the needed supplies for each patient.”
Solution #2: Batching. “Prior to going Lean, the phlebotomists held collected tubes until they finished the draws for the entire floor, which is designed in an H configuration,” stated Stanley. “Through our baseline analysis, we saw that we could smooth out this part of the work flow. We had the phlebotomist start at the farthest end of the floor and drop the completed batch of specimens at the tube station at the crossbar of the H. They then repeat this pattern. This new arrangement generates four smaller batches of tubes per floor, instead of one large batch. It has contributed to improved flow in the lab by leveling the volume of tubes received in accessioning.”
Solution #3: Personnel deployment.
“Our third improvement involved creating a ‘visual management’ board in the processing areas, showing a shaded box for every floor,” noted Stanley. “Each phlebotomist carries a red tag, similar to a luggage tag. When all the specimens on that floor are collected, the phlebotomist tubes the red tag down to the processing area with the last batch of specimens. The red tag is placed on the bulletin board and the processing coordinator is alerted that collections on that floor had been completed.
“Any available phlebotomist can now be deployed via pager to a floor with specimens remaining to be drawn,” added Stanley. “These innovations were simple and cost-neutral. They helped us achieve our FTE reduction goals—even before the capital improvements phase of our Lean makeover! We now consistently meet our goal of having test results from 95% of the morning draws available to the clinicians by 0800.”
Lean Project #2
“Our lab’s second Lean project—and our most extensive accomplishment—was the renovation and automation of our chemistry lab,” noted Stanley. “When I arrived at the lab, techs had to feed 10 aging analyzers—including a 15-year old Hitachi—which were located in small, chopped-up rooms. There was little integrated capability among the machines. Workflow through these lines was ragged and discontinuous.
“As part of our makeover, we determined which specific tests needed to be up 24/7 and which tests could be moved away from the core lab,” she said. “Next, we formed a selection team to decide which vendors to use.
Replacing 10 Instruments
“In keeping with our team strategy, members of the lab staff were on the selection committee,” explained Stanley. “We replaced the 10 pieces of equipment in the lab with three: two LX20 analyzers and one DxI immunoassay system from Beckman Coulter Inc. We also bought a countertop for backup. We selected these instrument systems because it allowed us to have total automation from front-end centrifugation of the specimens to back-end storage and mapping of specimens for future retrieval.
“Our renovation and automation makeover in the chemistry lab eliminated time-consuming manual tasks and created an efficient work flow,” observed Stanley. “One unexpected benefit was the attrition of some staff members, who chose to retire rather than go through the learning process on the new equipment.
“In our proposal, we had committed to reducing 7.75 FTEs in the chemistry laboratory by the end of installation,” observed Stanley. “Our actual reduction was 15.1 FTEs, representing about 9%. of the laboratory staff.
“One of the most important improvements in our laboratory has been in employee satisfaction,” stated Stanley. “The value of viewing employees as internal customers cannot be overstated. Growing shortages of experienced, highly skilled med techs make retention a high-priority issue. Automation alone can only achieve so much. By adopting strategies that incorporate the concept of personnel as internal customers, our laboratory is positioning itself as an employer of choice for the future.
“Employee satisfaction in the CH laboratory is up to 80%, one of the highest ratings for any department in the hospital,” she stated. “We attribute that outcome primarily to two strategies: 1) creating a Lean/Six Sigma work environment with strong employee involvement; and, 2) incorporating customer and employee satisfaction as a core management strategy.
Keeping Staff Involved
“One example of an employee satisfaction-based initiative at CH is our ‘Compassionate Care’ program,” explained Stanley. “All departments at the hospital were given the opportunity to participate. The program involves a half-day training session and allows the staff, as a team, to participate in charitable projects and morale boosting activities for staff and patients.
“Under this program, money was raised on behalf of an employee’s son who was diagnosed with cancer and two soldiers in Iraq were ‘adopted’ by the laboratory staff,” stated Stanley. “This program contributes significantly to positive morale and a team environment in the lab.”
All these management successes in the laboratory did not go unnoticed around the health system. “The CH laboratory’s Lean/Six Sigma improvement projects now serve as models for the rest of the BJC system,” noted Stanley. “As we initiated the “Five S’s of CLEAN [Sort, Set in order, Shine, Standardize, Sustain] in generic areas of the laboratory, such as the storage room, we shared the experience with other departments. In the lab, we encouraged departments to take before and after pictures.”
Inspired by these major successes, Stanley’s team still has more to do. “We’ve accomplished a great deal, but we still face two significant challenges. First, we need to expand our outreach business and our ‘Lean Lab’ allows us to be more competitive on pricing. Second, we need to achieve a 5% increase in productivity each year to stay fiscally sound.
“To help us increase productivity, we are working with Jim Shaw Resources, a firm based in Seattle, Washington,” she said. “Our goal is to per- form to benchmarks that keep our laboratory at the leading edge in our market. “For example, we derive our productivity measures through comparison of hours-worked-per-test with other hospital labs that have similar volume, out- reach, and send-out numbers.
25% Jump In Productivity
“These efforts are paying off,” continued Stanley. “In 2002, we performed 7,500 billable tests per FTE. In 2005, we performed 9,400 billable tests per FTE. That’s a 25% increase in productivity! During that same period we went from 179.7 FTEs in the laboratory to 145.4 FTES, for a 19% decrease—all through attrition and with only the one layoff involving the NRL billing group.”
The CH laboratory is ready to tackle new challenges. “Next targets for Lean/Six Sigma projects are the blood bank and hematology. Our budget proposal was rejected for the next two years, but we continue to move forward on these projects,” noted Stanley. “Our activities are capital-neutral at this time, such as developing architectural plans and selecting vendors. Once funding is authorized, we’ll move into the renovation and automation phase.”
Having enjoyed success with Lean and Six Sigma methods, Stanley is broadening the management tools she uses in the laboratory. “In addition to Lean and Six Sigma, we are aggressively pursuing continuous improvement initiatives based upon ‘human technology’,” she said. “Herman Gyr, a transformation consulting company, is working with us to increase business at the hospital by transforming the patient/family experience at our facilities. This is part of the ‘customer pull’ approach and is designed to generate repeat customers.
“Part of the hospital’s strategy is to offer amenities that appeal especially to women,” explained Stanley. “We are developing prototypes and doing observational research. Laboratory staff went through a customer service training program that emphasizes that the customer defines quality. Through process improvement and process reengineering, we can continually improve our processes and quality.”
This customer service training in the laboratory is another intriguing aspect to the quality management journey at the Christian Hospital laboratory. It demonstrates how hospitals and health systems are taking proactive steps to improve the patient experience at their institutions.
Buoyed by the successes generated from its first two Lean projects, the laboratory at Christian Hospital is looking for other opportunities to apply quality management methods. Stanley’s comments indicate that the laboratory staff is learning to understand how quality management methods like Lean and Six Sigma contribute to a more productive work environment. This is consistent with the experience of other hospital laboratories which have taken the time to educate the lab staff in these quality management systems.
Some Lessons Learned From Lean Projects
USING QUALITY MANAGEMENT CONSULTING RESOURCES WITHIN ITS HEALTH SYSTEM, the laboratory at Christian Hospital successfully conducted two Lean projects: one in phlebotomy and one in chemistry. These are some key lessons learned:
Things That Went Well:
•Reduced staff without layoffs. Staff was redeployed and some med techs opted to retire.
•Projects were completed on time and within budget.
•Boosted morale of lab. Staff was quite proud of the measured improvements.
Things That Didn’t Go Well:
•Changed two important things at once. (Collection tubes and new methods, like troponins.)
•Should have given our reference lab clients more advance notice that reference ranges would be changing.