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By: Karen Minich-Pourshadi, HealthLeaders Media

The first piece of advice a dietician offers a weight-loss patient is to make small changes, and then to build on these until a full-scale, permanent life change is achieved. The same is true for hospitals and health systems considering a Lean and Six Sigma approach. These process improvement plans offer healthcare leaders a sound path to meet the goal of improved quality of care delivered at the lowest possible cost.

For most hospitals or health systems, process improvement generally starts out as targeted strikes and eventually rolls into a whole new way of operating. In my next two columns I take a look at how four different providers approached process improvement, and how the changes they made—small and large—paid off.

Stage One: Small Changes Yield Encouraging Results

Every big change begins with a small step, and at North Ottawa Community Hospital, an 81-bed acute care facility located in Grand Haven, MI, the hospital was looking at a variety of inpatient, outpatient and support services to find ways to bolster margins while reducing cost and improving patients’ access to care. To that end, it affiliated with several organizations to help bolster its services and transform from a standalone hospital into a healthcare delivery system.

However, while the affiliations meant better patient care, NOCH’s billing and collections department had some process inefficiencies that had the potential to offset the progress. Moreover, some of the hospital’s processes would soon be in conflict with new laws regulating how payment information is kept.

“My staff was writing payment information down and keeping it at their desks—that isn’t allowed with the new laws. Also, sometimes that information would get misplaced and the payment wouldn’t get run. So, this was also a security effort; we knew we had to tighten things up,” said Mary Oomen, patient financial service manager at NOCH.

The main problem was that NOCH was still using dial-up credit card terminals in multiple locations and manually depositing checks at the bank. Its system lacked the ability to collect payments at any web-based computer in the hospital or at the new affiliate locations. In fact, one billing employee was still logging checks manually in an Excel spreadsheet, and another employee had to audit that log and physically bring the checks to the bank.

The collection process wasn’t any less manual either. Collection calls were made and payment information was taken over the phone. Then, the collections employee brought the information to the cash office, and it would be entered into a credit card terminal. If the card was rejected, the file would go back in to collections. If the card was accepted staff had to mail the patient a receipt for the transaction.

Kim Denhof, business manager for NOCH’s extended care services, says “just going to the bank, from start to finish, was 45 minutes every day and two people had to be involved in the process.”

Moreover NOCH lacked the ability for patients to pay online, via debit card, or to set up recurring automated payments. In short, posting, reporting, and reconciliation processes were rife with inefficiency.

As with our diet scenario, NOCH recognized that this was an easy area to take a first step at improving process. The hospital added a patient payment and remote deposit software program from InstaMed, and saw a 44% boost in collections. Plus it saved 20 hours of staff time each week.

“The individual who was responsible for making the deposit before now does it remotely, and it’s freed them up to work in our accounts receivable and outstanding accounts issues,” said Denhof.

Additionally, Oomen says patients who pay over the phone now receive a receipt via email instantaneously and they can complete the transaction while the patient is on the phone. They also can set up recurring payments with a debit card.

“[Automating] helped make our work more standardized throughout because we could offer this at the hospital and to our affiliates. It also helped eliminate a security risk for us, and the patients like it,” said Oomen.

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