HE A LT H C A R E
Dutch Hospital Implements Six Sigma
Red Cross Hospital in Beverwijk, the Netherlands, is a 384-bed, mediumsized
general hospital, with a staff of 930 and a budget of $70 million.
In addition to being a general healthcare provider, Red Cross Hospital
is the base for a 25-bed national burn care center that provides services to all
of the Netherlands. In 2002, it admitted 11,632 patients, performed 8,269 outpatient
treatments and received 190,218 visits to its outpatient units.
During the past four years, Red Cross Hospital’s management and employees
invested significant resources in building a quality assurance system, and
at the end of 2000, the hospital was awarded an ISO 9002 certification. After
that, management began undertaking quality improvement projects on a regular
basis, but it was doing so without the benefit of Six Sigma’s project management
system.
Life Before Six Sigma
The hospital’s initial quality improvement approach appeared to work reasonably
well. However, management soon recognized its control of projects
was less than effective:
• Project goals were often poorly aligned with the hospital’s strategic goals.
• There was no systematic way to determine a project’s relevance and contribution
to the long-term strategy.
• There was no standardized procedure for evaluating a project’s cost effectiveness.
• Management had difficulty making project go/no go decisions. Projects
were generally initiated because management thought they would make
a contribution to quality of care.
• Management was not able to access the potential savings of alternative
projects.
• Once a project was started, management did not have reliable information
about its status until it was finished. Each project had different milestones,
and progress could not be evaluated and compared to other projects.
Management was basically navigating in the dark.
The management team and employees were frustrated because the hospital
lacked a standardized project management approach. Time was frequently
wasted—when each new project was started, the approach, project documentation
and planning had to be developed from scratch. For that and other reasons,
management had problems properly training its employees in project
management. Though the hospital had organized training, the results were
meager and disappointing.
Another problem was management expected employees
to work on projects in addition to performing their
usual duties. This might appear to be an inexpensive
approach, but it seriously delayed potential savings.
Ironically, management was mostly unaware of this
unfortunate situation because of its poor management
controls. Had management been in a position to determine
the results of a project in advance, it would have
been able to make more appropriate decisions about
employee time allocations to projects. Fortunately, management
learned employees should be relieved of some
of their usual duties when working on a project.
Why Six Sigma?
Six Sigma incorporated a number of quality management
techniques that helped resolve some of the problems
at Red Cross Hospital. Management believed its
implementation of Six Sigma was successful for several
reasons:
• Philosophy: Because Six Sigma is based on scientific
principles, decisions were based on facts and
data instead of feelings and intuition. Projects
were not initiated when estimated savings were
below management defined thresholds.
• Project management: Projects were managed strictly
according to the five phases of the define, measure,
analyze, improve, control (DMAIC) methodology.
Each phase was completed only after specific
milestones were reached.1 At any given time, it was
possible to determine a specific project’s progress
in a unified way within departments and across the
entire organization.
• Well-defined roles and responsibilities: Six Sigma
assigned specific roles—Yellow Belt, Green Belt
(GB), Black Belt (BB), Champion and Master
Black Belt (MBB)—to those involved. Explicitly
defined roles and expected contributions were
important during the organizational change effort
and contributed to the success of a project.
• Tools and techniques: Six Sigma employed a variety
of tools and statistical techniques. Software
tools were used to make the techniques available
and accessible to people with little or no training.
• Well-defined interfaces with the existing organization:
Six Sigma provided a detailed blueprint that
linked it to the existing organization. Specifically,
Six Sigma’s tight project organization operated
across all hierarchical layers of the hospital. All
relevant information and responsibilities could be
brought together while the business continued to
operate.
Six Sigma was not just an idea or another trick to
organize improvement projects. Its set of well-defined
and well-tuned managerial instruments enhanced the
results of improvement projects and, ultimately, maximized
the performance of the entire organization.
To implement Six Sigma at Red Cross Hospital, management
had to customize and adapt some of the standard
Six Sigma management concepts so they better
applied to the healthcare industry. For example, adjustments
had to be made because Red Cross Hospital was
much smaller than the typical organizations that implement
Six Sigma.
Management also had to address concerns regarding
the culture of its nonprofit, service organization and the
differences between it and an industrial for-profit company’s
explicit focus on financial results. Fortunately, it
was relatively easy to convince the skeptics by explaining
that more money for the hospital means happier and
healthier patients. In this respect, Red Cross Hospital’s
experience parallels the implementation of Six Sigma at
Thibodaux Regional Medical Center in Louisiana.2
The Implementation
Six Sigma was initiated at Red Cross Hospital by an
external consulting company during a one-day training
session for upper management at the end of 2001. The
management team consisted of two directors and the
managers of the hospital’s four divisions. The quality
manager was introduced to Six Sigma in January 2002,
and she enthusiastically went through intensive BB
training that spring.
After the quality manager completed her BB course,
16 employees enrolled in in-house GB training provided
by the consulting company in September 2002.
Though all GB trainees were required to participate in
one Six Sigma project, one hospital director also participated
in the first wave of GB projects.
During the course of two separate, three-day periods,
every participant was required to produce documented
results. No GB project was allowed to proceed to the
subsequent phase until the preceding phase was completed.
Participants had to present their results twice in
front of the entire group, the second time being a presentation
of their final results.
12 I F E B R U A R Y 2 0 0 5 I W W W . A S Q . O R G
Dutch Hospital Implements Six Sigma
Because of the hospital’s small size, teams were made
up exclusively of GBs, each typically spending two days
a week on the project. Considering the hospital’s budget
and savings potential, management used $25,000
estimated savings as its financial threshold for initiating
a project. After completing the first wave, management
immediately started a second group of 15 GBs in
February 2003, a third group of 13 GBs in September
2003, a fourth group of 14 GBs in February 2004 and a
fifth group of 17 GBs in September 2004.
The Six Sigma approach was well received by employees.
The teams believed it supported them throughout
the entire process of a project. The data driven approach
was helpful in establishing support during the implementation
of the results. The data proved convincing
and, in many cases, minimized emotional resistance.
Initially, the hospital’s BB performed the role of MBB
on a part-time basis. This quickly proved inadequate as
the number of GBs increased. Since management wanted
to deploy Six Sigma relatively quickly, it decided to
hire a full time MBB from outside the hospital.
Fortunately, it was able to hire a BB with previous experience
from DAF, a Dutch truck manufacturer now
owned by Paccar. Management was comfortable employing
a MBB with experience from outside the healthcare
sector because the language of Six Sigma is universal
and independent of industry type. Red Cross Hospital
even received an offer from 3M, a company with a reputation
for having successfully implemented Six Sigma,
to support it in further developing its Six Sigma organization.
Outstanding Results
The first group of 16 GBs were initially involved with
seven projects. One project was terminated during the
course of the training because it didn’t run well. This
was a nice change, because in the pre-Six Sigma phase
of the hospital’s quality improvement initiative, such a
project would have dragged on forever. The other six
projects were successfully completed in February
2003. They are described briefly below. More details
about these and other projects can be found in a
recent article in Quality and Reliability Engineering
International.3
Shortening the length of stay of COPD patients:
Patients with chronic obstructive pulmonary disease
(COPD) were admitted to either the pulmonary or
internal medicine department due to capacity problems
in the former. A statistical analysis done by the first team
showed a significant difference in the admission time
between the two departments. The average stay in the
pulmonary department was two days shorter than that
in the internal medicine department. A further statistical
analysis showed this difference was not due to patient
characteristics or physicians. The pulmonary department
was just better at treating pulmonary patients.
The hospital rebalanced the bed capacity so all
COPD patients could be to be admitted to the pulmonary
department. After this change, in-patient days
were saved and more admissions were possible. The
annual savings was estimated at $40,000.
Reducing errors in invoices from temp agencies: After
an intensive investigation, the second team discovered a
considerable number of incorrect invoices from temporary
agencies. The errors consistently fell in favor of the
agencies and cost the hospital a lot of money to fix. The
hospital designed and implemented an improved declaration
form that is now required by all agencies contracting
with it. In addition to the annual savings estimated
at $75,000, Red Cross Hospital experienced a
one-time savings of $35,000 due to a refund from the
agencies.
Revision of the terms of payment: An analysis by the
third team revealed the hospital’s suppliers were paid
under a variety of terms due to the lack of a uniform
payment policy. A standard policy was established, and
a number of improvements were implemented. The
total savings so far is $35,000 and continues to increase.
Reducing the number of mistakes in invoices: Red
Cross Hospital issues 250,000 invoices to patients
and insurance companies a year. The fourth team
discovered 9% of the invoices were refused and sent
back due to the hospital’s mistakes. Given the large
number of invoices and mistakes, the true statistics
lovers saw their finest hour during this project. More
than 100 percentage points of improvement were identified,
a number of which are still being worked on
today. At this time, less than 1% of the invoices are
refused, and the savings has exceeded $200,000.
Rooming-in in the children’s department: A data
analysis done by the fifth team revealed a child’s length
of stay decreased when parents were permitted to stay
with their hospitalized children over night. Measures
were then implemented to facilitate the presence of parents.
Armed with the data, insurance companies agreed
to pay 80% of the cost for the extra services. The significant
decrease in the number of admission days allowed
the hospital to admit more children and boost its revenue.
The total annual savings was estimated to be
about $30,000.
Reducing the number of patients on intravenous
antibiotics: Intravenous antibiotics are much more
expensive than oral medication. The sixth team found
a number of patients who used intravenous antibiotics
could have been transferred to oral medication earlier
than they were. An analysis showed the internal medicine
department was better than the surgical department
at managing this process. Further analysis
revealed the internal medicine department had a strictly
followed standard operating procedure (SOP) for
switching between intravenous and oral medication,
and the surgical department did not have an SOP. The
protocol developed and used by the internal medicine
department was adopted as the SOP throughout the
hospital. The total annual saving was estimated at
$25,000.
Although each of these savings individually may seem
relatively modest, they added up to a significant
amount. Each required only minor changes and adjustments
to the operation and management of the hospital,
and more importantly, all the improvement projects
provided significant but less tangible benefits to the hospital’s
management and its customers—the patients.
The six improvement projects illustrate a $25,000
minimum level of revenue per project can easily be met,
and much larger amounts are also possible. Projects in
patient care and the administrative departments are also
feasible. Because employees are free to suggest ideas for
projects, management expects an improved selection of
projects will further enhance revenue in the future.
The results at Red Cross Hospital are encouraging.
The hospital’s management experienced no significant
problems implementing Six Sigma in the nonprofit
service organization, and employees were enthusiastic
and considered its use a major advantage in managing
and executing improvement projects. There is no doubt
Red Cross Hospital will continue to use Six Sigma and
ISO 9000 as the core of its quality management system.
ACKNOWLEDGMENTS
The work described in this article was supported by Red Cross Hospital, the
Institute for Business and Industrial Statistics at the University of
Amsterdam, the Isenberg School of Management at the University of
Massachusetts Amherst and the European Community (EC) through the
Thematic Network-Pro-ENBIS-EC (contract number G6RT-CT-2001-05059).
By Jaap van den
Heuvel, Red Cross
Hospital; Ronald
J.M.M. Does,
University of
Amsterdam; and
Søren Bisgaard,
University of
Massachusetts
Amherst and
University of
Amsterdam
REFERENCES
1. Mikel Harry, The Vision of Six Sigma, Tri Star, 1997.
2. Greg Stock, “Taking Performance to a Higher Level,” Six Sigma Forum
Magazine, Vol. 1, No. 3, pp. 23-26.
3. Jaap van den Heuvel, Ronald J.M.M. Does and M.B. Vermaat, “Six Sigma
in a Dutch Hospital: Does It Work in the Nursing Department?” Quality and
Reliability Engineering International, Vol. 20, No. 5, pp. 419-426.
BIBLIOGRAPHY
Barry, Robert, A.C. Murcko and C.E. Brubaker, The Six Sigma Book for
Healthcare, Health Administration Press, 2002.
Does, Ronald J.M.M., Edwin R. Van den Heuvel, Jeroen De Mast and Søren
Bisgaard, “Comparing Nonmanufacturing With Traditional Applications of
Six Sigma,” Quality Engineering, Vol. 15, No. 1, pp. 177-182.
General Electric’s website, www.gehealthcare.com/prod_sol/hcare/
sixsigma.
iSixSigma’s website, http://healthcare.isixsigma.com.
Kabcenell, Andrea, and Donald W. Berwick, “Pursuing Perfection in
Healthcare,” Six Sigma Forum Magazine, Vol. 1, No. 3, pp. 18-22.
Stahl, Richard, MD, Bradley Schultz and Carolyn Pexton, “Healthcare’s
Horizon,” Six Sigma Forum Magazine, Vol. 2, No. 2, pp. 17-26.
14 I F E B R U A R Y 2 0 0 5 I W W W . A S Q . O R G
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