USE OF LEAN METHODS HAS UNLOCKED major improvements at Baystate Health’s Department of Pathology in Springfield, Massachusetts. One Lean project cut average Pap test turnaround time by more than 50%. Another Lean project attacked errors with Advanced Beneficiary Notices (ABN), leading to a 75% reduction in write-offs, worth $1 million!
In the first case, the lab at this 750-bed hospital identified and corrected a myriad of small problems needed to cut Pap test turnaround time in half. As it did, it erased a significant competitive disadvantage for its lab outreach program in Western Massachusetts.
Similarly, the Lean effort involving ABN errors, by eliminating insurance verification failures at the point of care, increased revenue collections in the outreach program by almost $1 million.
“Best of all, we started these Lean process improvement efforts last fall and it took just eight weeks to produce impressive results,” said Virginia Blake, M.T., Performance Improvement and Education Coordinator in Baystate’s Department of Pathology. “For our lab, Lean techniques were easy to teach, easy to use, and produced remarkably fast improvements.
“In fact, the simplicity of this effort was best captured by the Lean team leader in our lab,” continued Blake. “She summarized the fixes in our lab’s work flow as ‘It was a lot of small potatoes.’ That one fact is enlightening about Lean. Removing waste in processes is not rocket science. The solutions we identified were not complicated. We fixed numerous simple and small problems—what the team leader called small potatoes—and those added up to reaching our goal.
“Lean proved effective and allowed our lab to change the system and produce these impressive outcomes within 60 days,” Blake added. “We started this program in November and showcased our outcomes for the administration in January.”
Characterizing the problems as many and small may be somewhat misleading given the size of the lab operation. The 21 pathologists and staff of 600 in the lab at Baystate Health perform 4.5 million billable tests annually, of which 60% are from the hospital’s outreach program, known as Baystate Reference Laboratories (BRL). One of the top 15 largest hospital-based reference labs in the United States, BRL has 23 patient service centers throughout Western Massachusetts. The med- ical center itself comprises three facilities, including Baystate Franklin Medical Center in Greenfield and Baystate Mary Lane hospital in Ware, Massachusetts.
Identifying Projects to Pursue
“Our lab’s Lean journey started about a year and a half ago with a few key projects in histology and the core lab aided by the assistance of an outside consultant with Lean expertise,” recalled Jason Newmark, Administrative Director of Pathology who was hired in October. “Then, in November 2008, we brought together several key department staff (including representatives from depart- ments other than pathology) in a conference room and identified four additional Lean process improvement projects to tackle on a priority basis.
“After identifying our four priority problems, we established a 60-day timeline to address them,” he said. “This was based on our upfront assessments, including: 1)way to measure progress and outcomes; and, 4) establishing an improvement schedule to achieve these goals within 60 days.
“One Lean project involved Pap smear turnaround times, two projects addressed insurance verification and Advanced Beneficiary Notices (ABN), and a fourth Lean project involved processing of inpatient CT patients in radiology,” explained Newmark. “The first three projects produced remarkable results, while the radiology project stalled due to several factors, most important of which was the difficulty providing staff dedicated time to thor- oughly work through the Lean process.
“For us, the Pap test Lean project was necessary because competing laboratories in our area were reporting results in two to three days,” noted Blake. “By comparison 95% of our Pap tests were reported in five to six days and our average turnaround time was four days.”
“Ob-gyn doctors in the community often asked why these test reports took so long,” added Newmark. “They could get Pap test results in two to three days from our primary competitors. If our competition can do it in two to three days, we needed to figure out how to do it faster.
“That became a motivator for our Lean team,” he stated. “The goal was for us to equal and exceed this performance target. Not surprisingly, the initial response of several of the staff (and even the manager) in cytology was, ‘There’s no way we can improve the turnaround time (TAT). We’re already going full out, and we’re strapped.’
“Then they started the Lean process,” Newmark stated. “The fascinating thing with Lean is that when you examine the processes in your lab step by step, you will see things that no one recognized were happening. This new knowledge typically overturns initial assumptions about what is, and what is not, possible to accomplish.”
Steps Toward Improvement
Blake agreed, saying, “We identified the steps and painstakingly mapped out each one on paper. This showed where each Pap slide comes from and where it goes at every step in the process through the lab—from the time it arrived in the lab until the results were reported.
“Dissecting existing work flow in this manner allowed us to model different solutions,” she explained. “We quickly identified a best case work flow scenario. A moment of enlightenment was when the team realized that with workflow changes, a Pap test could be processed and results
available in 24 hours. That was an eye-opener for all of us.
“After discussing all the problems and possible solutions, the Lean team settled on adopting a system of continuous flow,” Blake noted. “This was a paradigm shift for everyone, since the popular wisdom in the lab is that batching is the faster, more cost-effective way to move specimens through the laboratory. But the switch to single piece/small batch work flow was quick to implement and quick to produce results.
Moving Cytology Tasks
“Another source of improvement was to move some tasks in cytology over to BRL Client Services,” continued Blake. “This distributed those issues to the people who could remedy them. In turn, that removed those problems from the cytology line so they wouldn’t stop the flow.
“Cross training in cytology was another change,” commented Blake. “After cross-training, whenever staff has free time, they can help anytime a bottleneck develops. This gives cytology a resource it can redeploy to keep processes moving. Whether a cytotech, a secretary, or a prep tech—all can now use the same techniques to fix problems as they show up in daily work flow.
“Most impressively, these changes allowed the Lean team to reduce turnaround time—previously as long as five to six days—down to as short as 24 hours!” she declared. “Now our average is consistently two or three days, and that is 50% less time than our pre-Lean project Pap test TAT average.”
“The best validation of this outcome came from outside the laboratory,” recalled Newmark. “I received calls from doctors who said they noticed the improvement in TAT. That’s motivating to the laboratory staff. It is great that outreach clients acknowledge the value of these improvements to their medical practice.” (See table on page 13, “PAP TAT: Percent Completion From Accession in Lab to Result Available.”)
Unlike the Pap smear test initiative, Baystate Lab’s other successful Lean project had an internal focus. It targeted write-offs involving ABNs and insurance claim rejections.
Newmark set the scene. “Last fall, we determined that our lab was writing off about $1.5 million per year in net income due to insurance verification information that was wrong or because of ABN errors,” he explained. “About 60% of this total ($900,000) involved ABN errors. The balance of these write-offs, $600,000, were due to failures to verify insurance coverage.
“These problems occurred because we didn’t have the right systems in place and we didn’t have the right data for tracking,” he continued. “Moreover, we had not done a very good job educating our referring providers about how to manage ABNs or educating our patients on what an ABN was and what it meant to them financially. Further, in comparison to overall gross revenue, the write-off amount due to insurance and ABN issues represented less than a 0.5% write-off rate. That is one reason why the issue of lost revenue unfortunately fell off the radar screen.
“Yet, this is money legitimately owed to our laboratory,” Newmark added. “What prevents us from collecting those funds is our failure to collect the right data at the right time and educate our patients and providers. The goal of this Lean project is to identify these failure points and implement effective processes.
“In mapping the processes involved, we determined that there were only a few ways that patients come to us,” said Newmark. “For example, patients can show up at our patient service centers (PSCs). Another other way is when they visit doctors’ offices, where the specimens are collected and transported to our lab by couriers. A third way is that specimens are collected from inpatients here in the hospital.
“Oddly enough, prior to starting this Lean project, everyone believed that doctor’s officers generated the largest number of problems with ABNs and insurance claims,” stated Newmark continued. “But as we mapped our processes and identified the sources of errors, we were surprised to find that the vast majority of these problems originated with patients who visited our own service centers!
“This was a positive finding, because we have more control over the procedures that take place in our patient service centers,” he added. “On the other hand, it was disappointing to learn that, under the existing work flow, staff in the PSCs lacked sufficient procedures and tools to verify insurance coverage or to ensure Medicare patients signed an Advance Beneficiary Notice.
Working With ABN Forms
“As most lab managers know, the ABN, sometimes called a waiver of liability, is the form medical providers give to patients when they believe Medicare may deny coverage,” offered Newmark. “If Medicare denies coverage for the service, the patient would be responsible to pay for the service or appeal the denial. In either case, an ABN is needed if the provider wants to bill the patient.
“Value stream mapping of work flow showed us how specimens from the PSC were arriving in the accessioning area with flawed paperwork,” he said. “At that point, it is too late to ask the patient for insurance information or ask them to sign an ABN. Consequently, our staff must spend time contacting the patient or the doctor’s office in an effort to acquire the needed insurance information necessary to submit a complete, clean claim. Not only is this disruptive to patients and providers, it is waste (Muda) for staff to chase after information that is best gathered upfront, at the time the patient’s specimen is collected.
“Having identified the primary sources of these ABN and insurance billing write offs, our Lean team took steps to implement improvements to the process,” Newmark stated. “To address problems that originated with specimens submitted from doctors’ offices, we contacted our physicians’ offices directly and, where possible, arranged meetings with the physicians and their staff.
“It was a pleasant surprise to find the physicians very receptive to helping us,” he continued. “Our approach was to explain the problem to them and ask for their suggestions on how to address it. In almost all cases, they asked us to do two things.
“First, we were asked to educate the providers and their staff members about revising requisitions to clearly denote tests that would require ABNs and provide the list of common tests that require ABNs,” said Newmark. “Second, we were asked to provide or recommend software and online tools they could use to verify insurance coverage. We also asked the doctors to have their patients sign the ABNs in their offices rather than wait for our lab staff to call the office asking for additional information. Many offices did agree to manage ABNs in their office, a step in the right direction!
“The Lean team took other improvement steps,” he added. “Revenue management workflow was reorganized so that ABNs could be run on all send-in specimens, including follow up contact with the client on specimens that fail medical necessity. These improvements further reduced write offs.
“Simply put, in just over nine months, our Lean improvements have increased cash collections by almost $1 million!”
“Next, the Lean team turned its attention to the staff at the patient service centers,” recalled Newmark. “Everyone working in the PSCs was made aware of the problem and the implications associated with losing $1.5 million because of the write-offs. This was key. We communicated with our staff and asked them to be part of the solution.
“PSC staff was concerned that taking time to verify insurance coverage or get patients to sign ABNs would slow everything down,” he said. “The Lean team responded by installing software tools in each PSC that handle eligibility verification and include an ABN checker.
Working With PSC Staff
“The next step was to educate the PSC staff and everyone involved in how to verify insurance and how to handle ABNs” added Newmark. “This job is made easier by the fact that Medicare requires an ABN for only about 55 tests.
“Another change to our work flow is that we now have all patients give us the information and sign the forms up front,” explained Newmark. “Since October, these work flow improvements have reduced the amount of write-offs by about 75%. Simply put, in just over nine months, our Lean improvements have increased cash collections by almost $1 million!
“This is an interesting problem for the clinical laboratory because where I worked previously (in radiology), patients wouldn’t be served until it was known that the patient’s registration information was accurate and, where necessary, an insurance pre-authorization was on-file (if required), especially for a CT or MRI scan,” observed Newmark. “Plus, in radiology, patients are scheduled, which allows time to verify insurance information and collect authorizations. In the lab, many patients are not scheduled. They simply show up at the PSC, which makes validating information ahead of time nearly impossible. However, with changes to our workflow, we now have systems in place to verify insurance coverage or ensure that the ABNs are signed. That is making a big difference.”
New Lean Projects
Motivated by the successes of the Lean projects involving Pap testing and write offs associated with insurance claims and ABNs, Baystate’s Lean team is pushing forward with new projects. “Currently the Lean effort is tackling work processes in transfusion medicine, as well as results reporting and workflow in anatomic pathology,” noted Newmark.
It is most common for laboratories that adopt Lean to apply it first in such areas as accessioning and the high-volume chemistry and hematology lab. So it is noteworthy that Baystate pursued different objectives with its initial Lean projects.
With the project to cut average turnaround times for Pap test reporting, the laboratory improved its competitive position in the outreach marketplace. The Lean project to reduce write offs due to incomplete insurance information or missing ABNs clearly demonstrates the power of Lean. In an eight-week Lean project, Baystate picked up an additional $1 million per year in collected revenue.
Baystate’s Laboratory Uses Lean to Drive 50% Reduction In Average Pap Test Turnaround Time in Just Eight Weeks
TO BE COMPETITIVE IN THE OUTREACH MARKET, THE LAB AT BAYSTATE MEDICAL CENTER recognized the need to reduce turnaround time (TAT) for Pap tests from its current average of five to six days. In a Lean project that lasted just 60 days, the Baystate lab streamlined workflow utilizing pull and single piece/small batch work flow. The improvements were dramatic. Before the project, 39% and 16% of Pap tests were reported in two days and one day, respectively. After the project, 98% were reported in two days (a 59% improvement) and 85% of Pap tests were reported within one day (a 69% improvement). These significant improvements in TAT were quickly recognized and acknowledged by client physicians.
Baystate Medical Center Lab’s Improvement in Pap test turnaround time, Pre-Lean to Present:
Three-Day TAT: 67%, post-Lean raised to 100% Paps completed in 3 Days. 33% improvement
Two-Day TAT: 39%, post-Lean raised to 98% of Paps completed in 2 Days. 59% improvement
One-Day TAT: 16%, post-Lean raised to 85% of Paps completed in 1 Day. 69% improvement