Maybe…Develop through background research the set of events / treatments to treat ‘defect.’Study the variety in treatments (some doctors use one medicine, some use another, etc.)Establish using normal quality chart methods (Pareto, histogram) the ‘normal’ response to the defect. Obtain buy-in from champion and process owner that this is the ‘normal’ or ‘nominal’ treatment set. Explain that by learning the normal treatment set you are going to be able to create the best estimate for bottom line costs and target a meaningful reduction.Talk to Finance. Obtain cost for each treatment, separately. Aggregate each treatment into a set cost. Cross check with researched amount of $25K to $50K.Study ‘defect’ rate historically. Ensure that the correct distribution assumption is made. Don’t use a normal distribution if a poisson is better.Link the defect rate with the set of treatments and associated costs. Calculate the estimated annual loss to the health care provider.Get historical data on the number of each separate treatment per unit time, as some of these may not be related to the ‘defect.’Normalize the historical data vs. admissions, seasonality, etc.Make process improvements.Track the number of each separate treatment in the hospital, keeping in mind the expected values based on admissions, seasonality, etc.Watch the ‘defect’ rate, as well as the separate treatment occurrences per unit time. If your improvements are real, those treatments associated with the defect should go down.Calculate the cost reduction based on the new rates.
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