Low Cost Toolset

Many hospitals mistakenly pursued a strategy of layoffs and cost cutting in recent years which damaged organizational culture and destroyed morale, yet failed to get at the underlying problem of inefficient systems. The Low Cost Toolset works in concert with High Quality in an interrelated approach. Major cost can only be removed by getting at underlying systems, but a sound approach also looks for the nickel and dime savings and institutionalizing an efficiency mindset. Experience has shown that several million dollars can be obtained in the first year with no loss of jobs. This change manual organizes the work to be done under various Initiatives (in bold) and the specific Tasks they require (bulleted). Sample Task.

Full Toolset Manual for Low Cost: Profit Discovery & Value Creation — Low Cost Module.zip

Toolset Manual Contents

LC.0 Change Module Assignments

  • MAC Administration Instructions
  • Executive Introduction
  • Module Leader Instructions
  • Initiative Team Instructions

LC.1 Preparation for Session IV and Changes Addressed at the Management Training

  • LC.1.2 Change Elements Introduced By MHI At TUL Session
  • LC.1.3 Process Incoming Manager Suggestions From TUL Session
  • LC.1.4 "What I Want To See In A Proposal" By The CEO
  • LC.1.5 Develop Low Cost Tactical Plan
  • LC.1.6 Conduct People Climate Audit In Preparation For CI
  • LC.1.7 Staff Swapping

LC.2 Low Cost Initiatives for People Productivity

  • LC.2.1 Develop People Productivity
  • LC.2.2 Add Tools As Primary Strategy To Make People Time
  • LC.2.3 Review Of Decision Times
  • LC.2.4 Power Up Down Times
  • LC.2.5 Develop Light Duty Return-To-Work Program
  • LC.2.6 Out-Source Sideline Operations
  • LC.2.7 Education/Conference Audit
  • LC.2.8 Evaluate Information Services
  • LC.2.9 Review On-The-Job Training Processes
  • LC.2.10 Review Reasons For Associate Overtime
  • LC.2.11 Evaluate Patient Preparation Protocols
  • LC.2.12 Standardize Common Patient Care Administrative Processes
  • LC.2.13 Standardize Common Administrative Clerical Processes

LC.3 Low Cost Initiatives for Financial Processes

  • LC.3.1 Install New Policy: All Service Contracts Require A Full Rebidding Process
  • LC.3.2 Manage Private Pay Customers
  • LC.3.3 Maximize Cash Flow Management
  • LC.3.4 Evaluate Accounts Payable Schedule
  • LC.3.5 Maximize Speed Of Service To Billing Cycle
  • LC.3.6 Eliminate Lost Charges
  • LC.3.7 Review The Timing Of Budget Reports
  • LC.3.8 Evaluate Furniture/Equipment Storage
  • LC.3.9 Evaluation Of Paid Medical Directors
  • LC.3.10 Review The Cost Management Of Marketing Needs
  • LC.3.11 Review Organizational Marketing Costs
  • LC.3.12 Review Budget Variance Reporting Practices—Standardize
  • LC.3.13 Evaluate Policy/Practices Of Providing Associates With Lab Coats, Kleenex, Coffee & Other Creature Comforts
  • LC.3.14 Review Precertification Process To Capture Revenues
  • LC.3.15 Review Medical Documentation For Reimbursement

LC.4 Low cost Initiatives for Operating Processes

  • LC.4.1 Identify Service Lines
  • LC.4.2 Redesign Executive Structure To Reflect Horizontally
    Flexible Organization
  • LC.4.3 Standardize Supplies; Reduce Number Of Suppliers
  • LC.4.4 Redesign Organization Structure To Streamline Communications
  • LC.4.5 Eliminate No/Low Value-Added Services
  • LC.4.6 Paper Systems Condensing
  • LC.4.7 Revisit Pay Evaluation Practices
  • LC.4.8 Locate and Reduce Areas Of Waste—Cost Containment Audit
  • LC.4.9 Natural Resources Management Audit
  • LC.4.10 Patient Transportation Analysis
  • LC.4.11 Review Toxic Waste Management Process/Costs
  • LC.4.12 Review and Revise Catering Requests And Guidelines
  • LC.4.13 Review Purchasing Process
  • LC.4.14 Review The Life Span And Repair Tendencies Of Durable Medical Equipment
  • LC.4.15 Conduct Cost Analysis Of Internal Staff vs Purchased Services For All External Services Used
  • LC.4.16 Consider Substituting Reusable Materials For Disposable Materials
  • LC.4.17 Review The Policy/Practice On Free Meals In The Cafeteria
  • LC.4.18 Review The Procedures & Protocols For Recycling Expensive Materials and Supplies
  • LC.4.19 Evaluate Hospital Mailings And Costs
  • LC.4.20 Manage The Costs of Printing/Duplication
  • LC.4.21 Personal Use of Facility Services
  • LC.4.22 Develop A Process For Handling A Large Number Of Referrals At One Time To Avoid Customer Delay And Frustration

LC.5 Low Cost Initiatives for Managing Innovation

  • LC.5.1 Manage Innovation
  • LC.5.2 Resourcing & Rewarding Innovation
  • LC.5.3 Measure & Set Goals For Innovation
  • LC.5.4 Install The Idea Engine
  • LC.5.5 Develop Reward & Recognition For Low Cost Improvement
  • LC.5.6 Standardize Common Patient Care Administrative Processes

LC.6 Begin Physician Focus of Low Cost Initiatives

  • LC.6.1 Physician Utilization of Care Maps/Clinical Protocols
  • LC.6.2 Evaluate the Use of Economic Credentialing for Physicians
  • LC.6.3 Review Services Provided To Physicians & Cost/Benefit Analysis of The Services
  • LC.6.4 Evaluate Contents Of New Hire/Associate Physical Exam For Appropriateness & Cost Effectiveness
  • LC.6.5 Evaluate Possibilities Of Standing Physician Orders For High Need, High Patient Load/Traffic Areas
Sample Task

Task LC.2.3 Review of Decision Times

Priority: A
Timing: Session III
Teamleader: Module Leader
Recommended Approach: DIG
Other Assignees: None
Interactions With Others: None

Work To Do: Identify where there are unacceptable delays in decision-making and approvals both within each manager’s individual departmental operations, and within chains of authority, communication, approval processes, and within councils and committee structures. There are no “sacred cows” in this Task. Look at committees and task forces, board meetings, normal line approvals for all functions including financial, clerical, and general operational and administrative functions.

Chart out the time frames for approvals of all decision-making types within each department, from department to department, and from department to executives, and from executives to administration. The goal is to reduce decision-making times by 50% at a minimum. Analyze why decision making takes so much time, and create ways to bust time barriers. Common reasons for lengthy decision-making include:

The speed with which decisions are processed directly affects the speed with which the organization can operate. Cut out “waiting times,” reduce the number of people that must be involved in the decision-making. Utilize a more rapid communication process, i.e. e-mail, v-mail, etc. and establish standard operating timeframes for decision-making. The goal should be to address any and all decisions within three to five business days with the majority of decisions being handled within a standard of 36 hours. The collective time involved within a slow decision-making process does not insure a better decision, it only assures slower organizational performance.

Set time deadlines, e.g., executives have seven days to approve a DIG recommendation which typically is formulated under a standard 30 day time allottment.

Revamp each system and/or process where time delays are occurring, aim for a minimum 50% reduction in time or more. Think in creative New American Hospital terms. When experiencing barriers to change and improvement, take the issue to the operating vice president for resolution and support.