CEO SUMMARY: It’s an important milestone for the clinical laboratory profession. Quest Diagnostics Incorporated South Florida, based in Deerfield Beach, Florida, earned the 2007 Florida Governor’s Sterling Award for quality. This is only the second laboratory in this country to win a state quality award. But that’s just part of the story. Guided by the philosophies and methods of Six Sigma and Lean, and the goal of meeting customers’ expectations, Quest Diagnostics South Florida has developed value added services, such as patient appointments at Patient Service Centers.
FOR ONLY THE SECOND TIME IN HISTORY, a laboratory has won its state’s top quality award. Deerfield Beach, Florida- based Quest Diagnostics South Florida earned the prestigious Florida Governor’s Sterling Award for 2007.
This award recognizes organizations and businesses in the state that demonstrate exceptional management and operational performance. The Florida quality awards program was started in 1993. Quest Diagnostics South Florida is only the second non-hospital healthcare provider in the past 15 years to earn the Florida Governor’s Sterling Award.
With this recognition, Quest Diagnostics South Florida joins Tempe, Arizona-based Sonora Quest Laboratories (another Quest Diagnostics business unit) as the only two laboratories in the United States to win state quality awards. Sonora Quest Laboratories earned the Arizona Quality Programs “Governor’s Award for Quality” in December 2005. (See TDR, February 6, 2006.)
Transforming The Lab Industry
Both of these state quality awards to laboratories demonstrate how “first mover” laboratory organizations are transforming the lab industry. They are evolving from the traditional management paradigm to a new paradigm that emphasizes quality improvement methodologies such as Lean and Six Sigma.
The cornerstone of Quest Diagnostics South Florida’s achievement is the use of Six Sigma and Lean quality improvement processes across every aspect of the organization. These management techniques helped the laboratory earn a “world class” rating in employee satisfaction and dramatically improve customer satisfaction, among other accomplishments.
“Another notable achievement is that our quality improvement program is a financial winner,” stated Jim Panzer, Managing Director of Quest Diagnostics’ operations in South Florida. “In 2006, the return on investment was almost $10 for every $1 invested in our quality improvement program.
“Winning the Sterling award is a testament to our company’s vision and its commitment to building a business that excels in every major area of organizational competence, from patient service and employee relations to process management and leadership,” observed Panzer. Panzer and his team are preparing to showcase the unit’s quality improvement efforts on October 18. The Florida Sterling Award winners will discuss their experiences and successes at an all-day, by-invitation seminar in Miramar, Florida.
The Florida Governor’s Sterling Awards for 2007 were announced in June. These awards are given to organizations that score well on a range of criteria, including leadership, strategic planning, customer focus, and business results. A panel of independent examiners reviews a 50-page application, assesses company documents and interviews managers and employees to identify businesses that fulfill the award criteria.
“Examiners spent five days at Quest Diagnostics South Florida, reviewing every aspect of our operation and our quality improvement program,” recalled Panzer. “They did one-on-one interviews with 175 of our employees, in addition to group Quest Diagnostics South Florida is a sizable laboratory organization. It operates full-service laboratories in Deerfield Beach and Miramar, supported by 42 patient service centers (PSCs). Its 920 employees perform testing for as many as 16,000 patients daily. Services are provided to physicians and patients in the four counties of Miami- Dade, Broward, Palm Beach, and Monroe. The 55,000 square foot lab in Deerfield Beach is certified as ISO-9002 compliant.
“It was former Chairman and CEO Kenneth Freeman who, in the late 1990s,introduced Six Sigma and other quality improvement methods to Quest Diagnostics,” said Panzer. “Our South Florida business unit was quick to apply these methods to operations. We achieved ISO-9000 certification in 2000. In 2002, I was one of the first managing directors to earn a Six Sigma Green Belt. Since then, every director-level employee in South Florida has earned a green belt.
“In this business unit, we have a Master Black Belt, three black belts, and 48 green belts,” Panzer said. “All current senior staff have completed extensive Green Belt Six Sigma training that includes 72 in-class study hours. Black belts have completed 40 in-class hours as part of their training. All 920 employees have been introduced to Six Sigma methodology. We are currently implementing Lean methods in our labs.
“Six Sigma techniques help us reduce variation in processes,” explained Panzer. “We’ve done Six Sigma projects in anatomic pathology and cytology. We are preparing Six Sigma projects for the high volume core laboratory.
“Lean methods are designed to eliminate waste and speed up work flow,” he noted. “We have completed several Lean projects and three Kaizen projects. Kaizen events are focused Lean efforts in which a project is tackled over a five to six day effort.
“Our company mission is to put the patient first in everything we do,” stated Panzer. “Customer satisfaction surveys are one way to track how well we succeed in this dimension of our business.
“This year, we won the company’s customer satisfaction survey award for the third straight year, which no other business unit has ever done,” Panzer said. “So we knew we were doing something right. But we also know we can do better! And, we were aware of how Sonora Quest, another Quest Diagnostics business, had won the Arizona Governor’s Award for Quality.”
To sustain ongoing improvement across the laboratory, Panzer decided to raise the stakes. “We were clearly doing well, when measured against other business units of our company. But how good would we be when benchmarked against other businesses?” he asked. “To pursue ‘world class’ performance, it is necessary to measure our achievements against other companies and industries.
“The Florida Sterling Award Program is one way to accomplish that,” Panzer added. “After the examination, there was a meeting with the examiners. They recognized the things we do well. They also identified areas where we can improve. We learned a great deal from the examination and review process. Now, as award winners, we are still learning as we participate in the conferences and exchanges that are part of the Sterling Award program.”
Panzer’s comments accurately describe the quality management techniques his team uses to improve services and meet customer expectations. However, the real lessons for other laboratories are the performance gains achieved by the effective use of Six Sigma and Lean techniques. One major innovation is in patient scheduling for specimen collection at the patient service centers (PSCs).
“Use of Six Sigma methods helps us to be innovative in how we improve customer service,” said Panzer. “One big success is in patient scheduling. We watched as a couple of other Quest Diagnostics business units developed a call center-based program that allowed patients to schedule appointments at patient service centers.
“We recognized that many patients like this service. We also saw the advantages of patient scheduling,” he continued. “We decided to develop a scheduling system, organized as a Six Sigma project, to identify and eliminate sources of errors in the scheduling system. When we launched, we started by scheduling 500 patients per day!
“It took us about six months to develop the protocols and the software,” recalled Panzer. “Our patients responded favorably when offered the option of scheduling an appointment for their specimen collection, thanks to careful planning.”
“To achieve this level of patient acceptance, he continued, “we had to do an analysis of all 42 of our PSCs in South Florida. We had to determine, how do we train everyone? What are the steps involved in communication? How do we inform and educate patients about this new system? This Six Sigma project caused us to review every process and each step in how we served our patients. We literally changed the entire system.”
Quest Diagnostics recently launched the diagnostic industry’s first nationwide patient scheduling system. Patients can now schedule appointments through the Internet or by calling a toll-free number with interactive voice recognition (IVR). The nationwide system builds on lessons learned by South Florida and other business units that adopted patient scheduling service models in recent years. Today, approximately 35,000 patient appointments are scheduled each month using the new system at South Florida patient service centers.
Patients Like Appointments
“Acceptance has been steady and now 35% of all of our patients who come in through our South Florida PSCs make appointments in advance of their collection,” stated Panzer. “We’ve learned how to educate patients about the opportunity to schedule their specimen collection. When word got out to all patients, their use of scheduling appointments took off.
“This triggered an amazing shift, which we expect to continue using the new Internet and IVR system, in how our laboratories and PSCs interact with patients” Panzer said. “Besides the obvious increase in patient satisfaction, we had two significant operational results from patient scheduling.
“First, appointments made it possible to level the work load in the PSCs. That makes our phlebotomists more productive,” noted Panzer. “For example, instead of seeing a flood of patients arrive at 6 a.m., many of these patients now book an appointment later in the day and come at their appointed time. Further, because we have an appointment book, we can better match phlebotomist resources to the hourly needs of each PSC.
“Second, patient scheduling and the Six Sigma mindset created new opportunities to significantly improve our courier scheduling and logistics,” Panzer continued. “Since we have two laboratory facilities, it’s important to maintain a balanced load between them throughout the week. We closely monitor turnaround times from each lab site because we are committed to having all reports out to the physicians by 8 a.m. Right now, we get 97% or better of our work reported by 8 a.m.
“For the improvement project in our courier and logistics department,” he continued, “we applied Lean methods, with an eye to reducing the time that it took specimens to go from collection to receipt in the laboratory. Before patient scheduling, our 135 couriers went to the PSCs at 4 p.m. to pick up the day’s specimens.
“After patient scheduling was implemented, we asked the PSCs if we could pick up specimens at 2 p.m.,” Panzer noted. “That required them to start preparing specimens at noon. They did it, and 30% of our work arrives hours earlier in the laboratory.
“These specimens get to accessioning and the technical department earlier,” said Panzer. “It is the Lean concept of single piece and small batch work flow. All our specimens now move faster through the laboratory, leading to improved turnaround times. It is a great example of how Lean helps us compress the time allotted to meet and exceed our service targets.
“In addition, it’s helped the laboratory run more smoothly at night,” he commented. “Because more specimens arrive earlier each day, we have staff come in earlier, which means our processes are more efficient.
Earlier Finish At Night
“Activity now picks up in our lab at about 6 p.m.,” Panzer explained. “By 8 p.m., specimen processing has a full workload and is passing work on to the lab. By 10 p.m., about 90% of the work has arrived
in the laboratory for processing.
“Supplies is another service area where Six Sigma helped us improve customer service,” stated Panzer. “Through our Six Sigma customer satisfaction surveys, we knew that some physicians weren’t receiving supplies from us in time.
“We believed this was because they weren’t getting enough supplies. But when we applied a Six Sigma project to our supply systems, we found the delivery of supplies to be adequate, but that our system added time to the ship date, primarily because many of our accounts wait until they are almost out
of supplies to reorder—and their supply orders tend to come with the specimens, later in the day,” stated Panzer.
“Using Six Sigma methods, we moved the entire supply process from the day shift to the evening shift,” he said. “Now we take orders up to 8 p.m. each night. These are filled by the evening shift and are ready for the couriers to deliver to clients in the morning. Six Sigma helped us understand how to accept the customer’s way of doing business, then design an improved system that both eliminated supply shortages for our client physicians and made it easier for them to order supplies.
Quality Management Methods
Quest Diagnostics South Florida demonstrates how quality management methods can help a laboratory meet many of the challenges in today’s healthcare marketplace, while continuously improving the
service it provides to patients and referring physicians. It is an important example of how these new management principles are already at work transforming the entire clinical laboratory profession.
In at least four ways, the accomplishments of Quest Diagnostics South Florida demonstrate how and why the competitive bar for laboratory testing services will be raised by those laboratory organizations that embrace the philosophy of modern quality management. First, such laboratories are organized to understand the needs of their customers, to define the quality expectations of these customers, and then organize all aspects of its operation to fully meet client needs and expectations.
Second, such laboratories measure processes and outcomes in great detail. They understand precisely how the organization is performing—both at the level of individual work processes, as well as the final products or services delivered to their customers. In other words, the quality of services provided is deliberate, not accidental.
Third, regular and detailed surveys of customers trigger two benefits that provide competitive advantage. These surveys allow the laboratory to quickly identify problems and issues—and proactively fix them before the customer switches to another lab. Similarly, knowledge about customer needs and wants helps the lab identify opportunities to boost service levels and add greater value to customers.
Patient scheduling at Quest Diagnostics South Florida is a perfect example of how improving processes helps improve outcomes. Guided by customer feedback and Six Sigma/Lean thinking, the team spotted an opportunity to improve the specimen collection process and overall service for the patient, while simultaneously using these changes to boost phlebotomist productivity and significantly reduce the time between collection of the specimen and its arrival in the lab.
THE DARK REPORT observes that, by initiating patient scheduling nationwide (via telephone and Internet booking) across all its locations, Quest Diagnostics is raising the competitive bar for the entire lab industry. Yet the idea of scheduling appointments is simple and most of us recognize why patients would like it. So why hasn’t patient scheduling become more prevalent in the lab industry?
Knowledge Guides Action
One answer is traditional thinking. Laboratorians have a reputation for following the tried and true. Which brings up another point about coming changes to the lab profession. Labs which adopt quality management principles learn to think differently, to think innovatively, and, most important, to implement those innovations.
By its effective use of Six Sigma, Lean and similar improvement techniques, the accomplishments of Quest Diagnostics South Florida provide powerful evidence that the laboratory profession can be more innovative, creating new value for patients, physicians, and payers.
Close Attention to Employee Surveys Helps Increase Staff Satisfaction
EMPLOYEE SATISFACTION SURVEYS are a serious and continual endeavor at Quest Diagnostic Incorporated’s South Florida business unit. “Employee participation rate for these surveys is 68% and we analyze the results in every way possible,” said Jim Panzer, Managing Director of the company’s Florida operations.
“To help us understand the thinking of our employees, every survey has specific questions tailored to current issues and priorities,” Panzer explained. “The results from the employee satisfaction surveys are dissected and analyzed. The findings are used to develop an action plan to further improve employee satisfaction. Our team at every level—director, manager, and supervisor—participates in developing and implementing the action plan.
“The company’s ability to fulfill its commit- ment to patients is based largely on the skill, enthusiasm, and diversity of its 920 employees in South Florida, so achieving high levels of employee engagement is an important busi- ness goal. In 2006, the company’s operations in South Florida received an employee satisfaction score of 78%, which is considered ‘world class,’ based on an independent analysis by the Gelfond Group. In South Florida, minorities comprise 78% of the workforce, and hold half of the business unit’s supervisory and management positions.”
Panzer offered an example of what the company learned about employee advancement through its employee surveys. “We did a Six Sigma project on what people consider to be ‘advancement’,” he said. “Management’s idea of advancement is moving up from the line to supervision to management, for example. Or to move from an accessioning position to a higher-grade position.
“However, the surveys told us that our concept of advancement was not always the same as our employees’ concept of advancement,” explained Panzer. “To illustrate, a phlebotomist didn’t necessarily want to go from being a phlebotomist 1 to being a phlebotomist 2. Rather, phlebotomists wanted to improve their situation by working in a more desirable site. A technologist 1 was not always interested in being a technologist 2, but may have been more interested in going from the night shift to the day shift.
“We used employee feedback from these surveys to craft advancement policies that better meet their expectations and needs,” observed Panzer. “We also have a goal sharing program in which employees can get a bonus of up to 6% of salary at year end. This bonus is a key motivational tool and it helps to focus employees on our mission, our core values, and our strategic priorities.”