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HMO Formulary Standardization Six Sigma Breakthrough

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    aniel Sloan

    Business Issue
    All medications are not created equally. Reopro (generic name: abciximab), Integrilin (generic name: eptifibatide) and Aggrastat (generic name: tirofiban) are all platelet inhibiting drugs used in cardiac care. Each is priced differently. They act on patients in slightly different but clinically significant ways. The key critical to quality issue in health care is patient safety. Costs are a very close second.

    The classic Six Sigma DMAIC methodology (Define, Measure, Analyze, Improve, and Control) is used to summarize this health care success story.

    Define
    The health care provider wanted to see if evidence based medicine, using rigorous Six Sigma statistical methods, could or would promote a more standardized formulary. If so, volume purchasing of this single drug in only one hospital would yield improved patient outcomes and a $265,000 annual savings. The project champion, a doctor of pharmacy, wanted to investigate patient outcome variations in patient lengths of stay, blood utilization, and complications.

    • Null Hypothesis 1 (H1): There are no differences in lengths of stay related to the use of different platelet inhibiting drugs.

    • Null Hypothesis 2 (H2): There are no differences in blood utilization related to the use of different platelet inhibiting drugs.

    • Hypothesis 3 (H3): There are no differences in the number of complications seen with the use of different platelet inhibiting drugs.

    • Hypothesis 4 (H4) There are no financial impacts associated with the use of different platelet inhibiting drugs.

    Measure
    This project took place during a nine-month Black Belt training course. In addition, an undergraduate student was employed over the course of a two-week period of time to complete a comprehensive literature search comparing the three medications that were being scrutinized.

    One-way ANOVAs (Analysis of Variance) were designed to compare lengths of stay, surgical complication rates, blood utilization, and cost outcomes. In addition, correlation analyses, designed experiments, Pareto charts, quality control charts, and other statistical tools were used to compare 100 percent of the physician practice patterns.

    Analyze
    Statistically or economically significant differences emerged immediately in all areas of study. Results observed "in-house" mirrored 10 years of published data in peer-reviewed, professional journals. In the context of this medical community, a decision was reached to eliminate Reopro and Aggrastat from the formulary. Deciding factors included significantly improved patient safety, better outcomes with fewer complications, and a system wide savings of more than $1 million dollars.

    Improve
    The political process of presenting the data to the medical staff took months of time. The actual data collection and analysis process took only a few weeks.

    Control
    Standardization based on patient safety offers Health Maintenance Organizations any number of breakthrough opportunities.

    Financial Results
    Conservative first year, system wide cost savings exceed $1 million. In addition the lower lengths of stay created new treatment capacity, which had a very favorable effect on productivity and bottom line performance results. Total time for this Master Black Belt consulting project was six months.

    About The Author
    Daniel Sloan has provided senior executive leadership, project management, seminar leadership, education, Six Sigma training, and consultant services to manufacturing companies, software corporations, computer network companies, health care corporations, aerospace, insurance, and governmental agencies in 38 of the United States, Australia, Uruguay, Mexico, and Brazil. Mr. Sloan has provided consultant services to a diverse group of other organizations including: The Washington State Department of Health Facilities, Services, and Licensing Division, City University, the University of Pittsburgh, and the University of Washington Business School.

    Sloan Consulting has a 12-year track record of regional, national, and international consulting in productivity and Six Sigma breakthrough improvements. The firm's reputation rests on a long track record of producing substantial, bottom line financial results. Mr. Sloan can be reached via email at daniel@danielsloan.com.

     
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