LEDI 86 | Operational Transformation

 

Dan Mullen will be joining the Leader Dialogue co-hosts on the Nov 15, 2022, podcast. The podcast topic is Technology: Maximizing Your Systems to Accomplish Your Goals. Daniel Mullen joined ABOUT Healthcare as the VP of Innovation in Analytics in November of 2021.

According to an Oct. 25 report from Health Affairs, “healthcare systems are on track for their worst financial year in decades.” Margins have plummeted, labor expenses continue to climb, outpatient activity has dropped, and inpatient capacity and throughput have become even more challenging to manage, due in part to higher levels of patient acuity and post-acute placement delays. Now more than ever, healthcare organizations require accurate and real-time performance information and a technology platform that effectively supports efficient workflow processes and handoffs.

In his role, Dan is responsible for looking at an array of healthcare data and operational processes in health systems, looking for the best ways to leverage data within systems to improve processes, patient care experience, and increase financial performance.  

Dan will share his perspective and insights on this important topic, providing practical suggestions that can be applied immediately.

Listen to the podcast here

 

The Essentials Of Operational Transformation With Dan Mullen

We had a fascinating discussion with Dan Mullen. Dan is an MIT MBA. He’s a master blackbelt, a former college professor. There was so much meat in this interview that I would encourage you, however you decide to take notes, please do that. Be prepared to take some notes for this episode. There’s a lot in here.

One of the things that Dan said in the interview was, “What you measure is what you move.” I love that because you have to have insight into what it is that needs to be measured so that you can make improvements. That’s one of the little nuggets that he shared with us. Talking about what to start doing, what to stop doing, and what team it takes to move the needle and helping you optimize your resources and to maximize your demand capacity and throughput issues. Buckle up, take a few notes and enjoy this episode that the conversation that Ben Sawyer and I had with Dan Mullen from ABOUT Healthcare.

Thank you for joining us again with the LeaderDialogue from Baldrige Foundation. We are brought to you as always by ABOUT Healthcare, our sponsor. In fact, ABOUT Healthcare is a strategic partner for the Baldrige Foundation to help mostly our healthcare leaders deal with the challenges that are coming at you in a very practical way.

As always, we’re going to tease out some of those opportunities for you and give you some practical information, and help you figure out how to cope with what is happening around us. Not just survive but thrive as well. That’s our hope. I am joined as always by my cohost and good friend, Ben Sawyer, from ABOUT Healthcare. Thanks, Ben, for being with us.

It’s always a pleasure. I’m looking forward to our discussion. It’s very timely.

You have introduced me to our guest, Dan Mullen. Dan is a new colleague of yours. Dan is the VP of Innovation at ABOUT Healthcare. Dan has a fantastic resume. I’m fascinated by the fact that he’s spent so much time in the payer community, and has had a lot of experience at places like Optum but also UnitedHealthcare and Anthem, or we should say Elevance. They have to decide what their name is, but it’s Elevance now. By way of background, Dan, you’ve been with ABOUT Healthcare for a year now, and you have an MBA in Industrial Engineering certification from MIT, as well as Six Sigma Master Black Belt. As I said, you’ve spent about 25 years in the healthcare process, improvement, and analytics and working on the payer side.

You’ve had senior operational roles at those places we mentioned, Anthem, United, and was the VP of Analytics at Optum. You’re an ideal guest for us because our goal is to talk about how our readers, who all have invested millions of dollars in existing systems that are meant to aggregate data and pull things together and give them what they need to make better decisions. To optimize all of their facilities and resources. You’re a great guest for that. Thank you for making time to talk with us, Dan. Welcome to the show.

It’s my pleasure. Thanks for having me. I’m looking forward to the conversation.

Maybe to get things started, Dan, you could talk to us about some of the things. As I said, most of our readers, I believe come from the provider side. We do have a number of people on the payer side as well but most of them come from the provider side and support to healthcare systems. Maybe you could talk about the things that you did in your previous roles and how that’s prepared you for what you’re doing now as VP of Innovation for ABOUT Healthcare and how you serve our community.

As you mentioned, thank you for that great introduction, Roger. Ben, good to see you again. Over the past many years, a lot of the focus in my career has been upon that payer side and understanding the patient need from the payer side while ensuring low cost. While ensuring that we’re getting good patient outcomes with our population health management processes but also effectively optimizing contributing margin and revenue, both for the payer and for the systems.

What we have found with that many years and the majority of my background was in process improvement, looking at the processes, applying engineering and lean Six Sigma methodologies to streamline those processes. Streamline that demand, that capacity, that throughput that flows any unit through any system. As we looked at those process improvements, we found that from the payer side, prevent prevention was the best medicine. Understanding our population health and how can we minimize occurrences and digging into that.

LEDI 86 | Operational Transformation
Operational Transformation: From the payer side, prevention is the best medicine, understanding our population’s health and how we can minimize occurrences and digging into that.

 

What we found and I have found this over many years and at about working with systems. It’s no different, is that we are so robust in data. Hospital systems and payer systems are so robust in data that it carries over. Looking at the other side of the operation, hospital operations and the systems operations over the past years, I found that a lot of it carries over and where those opportunities lie.

I almost want to equate it to a workflow management system leveraging data as its cornerstone. The largest difference I have found between the healthcare industry and the health system industry, the payer side versus the provider side is the accessibility of that data and the way we interpret that data. As we’re getting this great data and there’s a lot of great data. On the payer side, they’re very focused on what their objective is to come out of that data.

On the system side, we’ve got a few more things to worry about. The hospital systems, not everyone is worrying about contributing marginal revenue. We also have factors like patient safety and patient care that we have to focus on and bring into our equation that it’s not all about optimizing to optimize. It’s optimized while maintaining that high level of quality to our patients. That has been the golden ticket in understanding some of these process improvements that we’ve done in some systems over the past few months.

As you talk about how the health systems have this huge tranche of data, I remember in the early days, and I worked for a very large national system. We somehow justified or we felt necessary to justify our expenditure on the electronic health record. Like many systems, we started with one and invested deep, then we merged and acquired and all that stuff. We ended up switching to another company, so millions and millions of dollars.

One of the reasons that we made ourselves feel okay about it is because we said, “Look at all the data that we’re collecting. At some point, we can figure out a way to monetize that data. We can do something with it.” We kept talking about data warehouses and how important that is, but it occurred to me as you were talking, we were missing the point.

We were missing the point that that data could be used by us. Not us selling it, monetizing it and selling it to somebody. We didn’t take full advantage of it and say, “What are the trends here? What can we learn from our own data in terms of how to get this holy grail of low cost and better productivity and all that?” Thank you for that.

I want to add to your comment there and ask Dan a question. Given the amount of data, Dan, coming from multiple systems, how do healthcare leaders start with the end in view? Particularly in what you set up with demand, capacity, and throughput, how do they start with the end in view and say, “This is what’s critical? How do I get it? How do I make it applicable to my daily operations?” What recommendations would you make to leaders that are facing those kinds of real-life questions?

Without getting too much into the organizational design, which I’m sure we’ll touch on at some point in this conversation. You’re right, both Ben and Roger. We’re putting a lot of data in these systems. A lot of data’s going into these systems and it’s sitting there. You almost have to treat your system as an employee. You almost have to say, “Why am I investing in you? Why am I putting into you so heavily? I need to get something out.”

The way we want to look at that is we want to treat our hospital operational side as that in operation and a workflow. Starting with the end in mind, it’s about demand capacity and throughput and understanding each of those three tranches, how much demand do we have backing up at our front door. Do we have the capacity to place that and are we getting the throughput that we need to keep the process flowing and keep it flowing?

The best way to start looking at that is looking at your bottlenecks in that process. Understanding where those opportunities lie that your patients are waiting and/or you’re missing on capacity. I would always start in that first tranche of demand, understanding what am I getting in and where’s it coming from. The second is, the stuff that’s coming to me, can I put it somewhere? Whether I’m lacking the service or lacking the capacity. What’s happening in that workflow that’s causing me not to get that demand in?

The part that’s often overlooked is that throughput. Those extra bed stays long length of stays compared to what it should be because that’s what’s causing the backup and the rest of the process. When you’re looking at this, again, you have to operationalize this process. You have to seek to understand what’s that workflow and where do the opportunities line in. You’re doing that with all this great data you’re putting into your system. Pulling that data out and understanding it becomes a key component. Also, understanding who’s doing the work.

A lot of the opportunity you’ll see now in a lot of places is the way we’re getting that data in is we’ve got highly qualified RNs like yourself, Ben, that are doing work that might be better served, being done a little bit smarter. Maybe having a more administrative person doing some of this by allowing our system to do some of it for us.

We have to stop thinking of our computer systems and our IT systems as the box downstairs in the corner of the basement we throw money at, and we feed it every now and then. We need to start making it act like an employee and giving back to us. The way we do that is pull that data out, have the right people looking at it, and making the right decisions to bring us forward.

We have to stop thinking of our computer and IT systems as the box downstairs in the corner of the basement that we just throw money at. We need to start making it act like an employee that is giving back to us. Share on X

Dan, you and I have talked about this before, but to provide clarity, as leaders are looking at getting that information that’s meaningful so they understand their process obstacles and so forth. What are some of the key performance indicators or metrics that you would recommend prioritizing in those three areas so that organizations can gain the greatest insight and be able to zero in on their improvement efforts?

We’ll start with demand. In demand, most people reading this will probably be familiar with the metrics of acceptance rate, denied rate but the hidden metric, the mystical hidden metric is canceled. Canceled is the one that most systems probably ignore. Your canceled cases are majority of those with the exception of patient cause, patient pass away and patient leaves AMA. Vast majority of those are caused by process opportunities in your demand.

If a system is looking to transfer patient to us and they’re waiting so long that they give up. They basically send it somewhere else. That essentially means we’re not responding in a timely fashion or something’s going on that’s causing them to go elsewhere. The acceptance rate, what are we accepting? What are we declining and why? Why are we declining things? Are we declining these things because of capacity? Are services not available? Why are we declining cases coming in that margin coming into our facility?

Again, if you want to take a nugget away, go look at your canceled cases. Go look at who’s pulling the opportunities away from us for patients and why are they doing it. In the demand side, I would put those as the big three. In the capacity tranche, I would say you want to look at your length of stays. You want to look at, are your patients in those acute facilities or in those heads and beds and for what reason are they there more than a planned to?

LEDI 86 | Operational Transformation
Operational Transformation: If you want to take a nugget away, look at your canceled cases, who’s pulling the opportunities away from us, and why they are doing it.

 

As if you’re planning anything. You want to plan for when that capacity’s going to be available and you want it visible all the time. You want to know the minute someone’s there an hour too long or the minute someone’s there two hours early because we’re not talking about solving the problem but making it better. You’re making it better by constantly understanding what your availability is because that case that’s about to get canceled on the demand side. If suddenly I have an early discharge and I have a bed available. Maybe I can grab that extra case and get it into my system.

Your current capacity and availability of beds is key in your capacity measurement. On your throughput side, there are two I’m going to mention. The first is a length of stay adherence, extra bed stays, overarching, getting people out, understanding when are people leaving versus when they should have left on your throughput.

Evaluate your network of where you’re putting them. Understand the capability of your system you’re handing off to because you can push all day. No one’s there pulling it away. It’s just going to sit out there. Truly understand, where can I put these patients? Is that network of where I’m putting it adequate and am I effectively monitoring it?

There’s an old saying, Ben, you’ve probably heard me say it a thousand times. What you measure is what you move. If you are not measuring the performance of these things to get that incremental improvement, you’re going backwards. From my perspective, demand, I would say accepted, canceled, and non-accepted. Focus on that canceled. Those are missed opportunities but focus on those declines because the declines are going to indicate to you where your problems are.

Cancel is going to into you where your full-length workflow problems are. On capacity, understand in real-time the availability of your capacity and react to it. If you get an early release, react to it by getting a patient in. If you get a late release, react to it by shifting resources doing what you need to do. Finally, on throughput, understanding length and stay compliance and understanding where you’re setting your patients and why and how that is working.

That’s a great summary. Thank you, Dan.

It’s very interesting. As you talk about this and talk about taking full advantage of whatever capacity we have, again, two questions come to my mind. One is, do most hospitals, do most systems on the patient care level, do they have the tools that they need to do this? Have they invested enough or do they need to invest more to be able to do what you’re talking about? Is there something missing or is it all there?

In most cases, it’s all there and it’s an exercise of collection aggregation and analysis. Most systems have invested, back to the million-dollar question. Most systems have invested millions of dollars into these systems. They are capturing such robust information and data. If there was to be a gap, I would probably say the gap would be in the workflow of the patient. The patient flow tooling of where the handoffs are occurring and how long it’s taking on the handoffs.

If I was to look at all the systems I’ve seen over the years, I would say that’s where, if there’s a gap, it would be an understanding the handoffs in the process to where things are getting held up. I think most have the ability to look at their patient flow and understand these things pretty robustly. There’s a way to do that. There’s an approach you want to use and the right expertise you want to apply to that, which we’ll talk about in a later discussion. Most hospitals in the array of investments they’ve made in the technology sector and the patient flow management sector do have this information available to them.

Roger, what’s interesting with this, I had a conversation with the director of case management at a large academic medical center. To Dan’s point, the data is there but this organization had made a decision because of staffing challenges that they were going to give a patient load to their charge nurses. The charge nurses are carrying their own caseload.

As a result of that, the multidisciplinary rounding that’s occurring on a daily basis is missing nursing. Even though the nurse has clarity as to when that patient’s supposed to be discharged, it’s not being brought in to the MDR and that coordination. Cross-disciplinary is not happening. They’re like, “The stay is going up.” They have the data but because of decisions they made on staffing, they’re essentially obstructing the ability to execute on that effectively.

There’s not an alignment between the case management knowledge of that data, the hospitalist knowledge of that data and the bedside and charge nurse knowledge of that data to be able to effectuate to Dan’s point, the change in patient throughput. Regardless of knowing when that patient should be discharged.

Who made that decision?

It was senior leadership and it happens a lot. By the way, this happens a lot where you’re dealing this senior leader with priorities and you’re trying to make the best decision you have. The challenge is you don’t always know what the impact on the frontline is going to be of the decision you make. You make a staffing decision that from a cost standpoint and so forth, might make perfect sense.

Unbeknownst to you, it is impacting directly your patient throughput and the ability to get patients out because those folks that need to be involved in that key meeting and decision making, which is the multidisciplinary round. Either or not there or don’t have the information necessary to be able to make that decision.

That’s my point. Thanks for bringing that up. It’s a real-life example and it’s not isolated to be sure. It’s happening to other places as well. As I listen to you, Dan and Ben about these examples, I go to the people part of it and say, “You can have the most elegant system. You can create this expensive, elegant system that has all these components. You can pull all this stuff but who owns it?” Who is it that owns it?

There are several communication challenges here. One is, do the people that own it and maintain it, communicate effectively with the people that have to use it? What’s the mechanism in a hospital? Again, my most recent examples of healthcare, as a healthcare purchaser with my 94-year-old mother and being in and out of the hospital and broken hip and all this stuff. I’m going, “Whose responsibility is it to communicate this to the patients so that they understand?” There’s a lot of misinformation.

Anyway, back to the who. What I had hoped we’d talk about Dan is if you were going into a health system and setting this up, what team would you put together? What’s necessary for you to go in and diagnose and say, “You are not doing a very good job. You have the tools to manage demand capacity and throughput but it hasn’t been assigned to the right people.” How are you going to set that up as a consultant to a health system? What’s the best way to do that?

I’ve been through a few of these over the past in looking at systems and looking at workflows and things like that. I found an effective strategy is a triangle approach. A three-tier approach to managing this and working this. The cornerstone of that is your data, getting that data out and understanding the question you’re asking.

As you approach this, you want to ask that question to say, “I’m looking for an opportunity in my patient flow. I am looking for an opportunity in my contributing margin. I’m looking to increase market share.” Whatever that question may be. You have to go in and have to dig that data in looking for that opportunity. The first person you want on a tiger team or an operational improvement team. Whatever vernacular you want to use for this patient workflow improvement team, a margin improvement team is a data person.

The first person you really want on your tiger team is a data person. Share on X

You want someone who’s got that experience in going into your system, understanding the data and not just the data. This is where the mistakes often made. You get some data nerd that can pull you a bunch of data and put it in a spreadsheet and send it to you. That’s great. That’s not consumable data. You want someone that can go in and understand to a degree your process flow and your patient flow so they can pull that data in a meaningful way, which is quintessential.

Missing something as simple as how long is it taking a provider to respond to a page and understanding is there a hang up there? It’s a lot different pulling a bunch of data. Once you have that data and you have that flow of data that shows the flow, the informatics of that data, there are two other people you want involved in this process. This is where a lot of the disconnect occurs. Get a clinical person involved. Take that data that this data analyst, this whatever term you want to call them. They pull this data and create all this information.

Now take a look at it and say, “Does this make sense from a clinical perspective for a patient flow and patient safety?” This may take an extra ten minutes but it’s meaningful to the patient’s success. You can’t lose sight of that. You want a clinical person involved with that data person. Finally, you want some process improvement, industrial engineer, someone who can look at these workflow processes and quickly identify where we’re getting our bottlenecks and what’s holding on our throughput.

You’ll often find the same areas of opportunity but it’s how do we fix it? Now you take those three people, you put them together and now your data person takes that industrial engineer, that process improvement person’s feedback and can model for you what the difference will be. The most important part of this is, as that process improvement person walks in and puts on their master black belt hat and says, “Here’s what we should do.” You want to give that clinical person that flag to say, “That would make it more efficient. However, it would jeopardize this patient’s safety.”

The success I’ve had, Roger, is looking at those three capabilities. Someone who’s very familiar, who can get our data and is familiar with it but understands it, understands that business process. Partner them with a clinical person and an industrial engineer process improvement person and create that tiger team. Call it operational excellence or process improvement. Call it whatever you want but take that team, put them together in an office. Not in separate places, so they’re talking to each other.

That bullpen mentality to improve these processes and the ideas that group will generate and bring to your C-suite are amazing. Again, it starts with that data and understanding that data. As I said, we’re putting tons of data into these systems. Get it out, make that system your employee and make it work for you.

What’s your estimation? Are a lot of systems doing this, or is this rare when somebody figures out how to this formula that you’ve laid out?

I’ve been to a few conferences over the past year and over the past many years. I’d say that it’s few and far between hospitals that take the time to take the step back. Except that they have an opportunity and put the energy and time into it. A strong executive sponsor in these types of efforts is key. Usually, someone in the C-suite. The COO is usually an amazing person to support these efforts but you’re always going to have your CFO trying to get involved.

You’re going to want to think of this process as a train. Getting that train going and getting out of the station is a little challenging. Once it gets moving down the tracks, everybody’s going to jump on. That’s where you start doing things like opening up inlets for people to give ideas to say, “We’re doing this. This is wasteful. This can make the process better.” Some of those ideas will become organic once this train starts moving down the tracks.

That’s great. That’s helpful. On a previous episode, Ben, you remember we talked with Brian Moran about the twelve-week year. I refer our readers to that because as Dan, as you said, getting executive sponsorship. I think that’s one of the huge takeaways from the twelve-week year. How do you compress the timeframe? How do you assign the appropriate amount of urgency to this and at the same time saying, “We are all looking at this.” As we talked with Brian and Dan Isaacson too at Loyola, having a daily meeting five days a week, talking about, “What progress are we making? What’s the next problem for us to solve?” That’s the intensity you’re suggesting that we focus on this?

Ironically, I’m also a certified scrum master. An agile approach to this with daily standups, daily updates, a production tracking report, showing the progress you’re making day over day quickly gains that momentum I’m referring to. I 100% agree with you, Roger. I’ve been doing this for a long time. I love this topic. You picked the right topic for this discussion. I’ve got to give you credit, Ben and Roger.

It’s super clear. One thing that jumps out at me too, Roger, with the twelve-week year is the clarity of focus. In that example that you used at Loyola, there was nothing nebulous about it. You had a particular problem that you were trying to fix.

Revenue cycle.

That sometimes is part of the problem as we all know in organization. It’s like you can have improvement efforts underway, but if it’s not focused and/or prioritized because it’s both of those, you may not make any progress. That’s why beginning with the end of view is important. It’s also why, to Dan’s point, the executive champion is critical because if it’s not prioritized, it’s also not going to get done.

I’ll tell you, when you look at the data in a lot of these systems, all the notes are there. It’s about getting them in the right order and playing it. The notes are there already in a lot of these systems.

When you look at the data in a lot of these systems, all the notes are there. It's really just about getting them in the right order and playing it. Share on X

Dan, if a system is reading, the right person is reading who can ignite this in their system and introduce it. They have the agency and the authority to do it and they put together this triangle, the three people and everything is done right. How quickly do you think they’ll begin to see measurable results?

You can usually affect change. I have examples of where we’ve affected change in as little as 90 days in some facilities where analyzing this information, look at this patient flow. We identified a level of care and a service line that had a huge opportunity for us. We quickly transitioned into being able to accept more of those patients. We showed a 15% to 20% growth and contributing margin in 90 days.

Understanding and looking at that, I can’t stress the importance of looking at your data in a lens of understanding your business. A lot of the failures I see are looking at the data and looking for random anomalies that might help us out. Approach the data with the business question you’re trying to solve and don’t lose sight of that clinical patient safety side.

We have a few more minutes left, but I’d love to hear both of you paint a picture. Ben, you’ve got real-life examples too from your work. Maybe if you folks could paint a picture to leave with our audience of what is likely to happen if they fail, if our systems and if our readers fail to do this. If they fail to take full advantage of what’s right in front of them, what’s it going to look like? What’s their path?

I would say two key impacts on this. First, from a cultural perspective of your clinical staff, frustration’s going to build. Now we are dealing with a very challenging environment with retaining RNs in most systems because of frustration because of workload. This is compounding it. Let’s get these RNs back to using top of their license. Let’s get this administrative work cleaner and more linear where it’s working for not against us.

Let’s get these guys back to doing what they want it to do in the first place and what they enjoy doing. Get some of this process and administrative offer their plate. The second would be patient acceptance, patient opportunity to help more patients. By understanding your demand and freeing up that capacity through your process. You’re going to be able to bring in more patients and help more patients, which is going to result in better for everyone in the system.

The way I would answer it is not understanding your business, and what’s driving success is going to impact you in literally every aspect of your business. It will impact you on avoidable days because those will be coming up because you’re not hitting your state targets. That drops right to your bottom line. It will hit you on the top line because you’re not able to accommodate patients. You’re losing revenue.

It’s going to impact you in your managed care contracts. It’s going to compromise your ability to be competitive in your catchment area because whoever else is doing it better is going to get that volume. Particularly in today’s fast-paced consumerism market with a lot of external competitors, an organization’s ability to line up on what is key and be able to drive the kinds of processes that Dan is talking about. It can literally be the difference between success and failure.

Thank you, folks. This has been very interesting and a little academic, which we expected from a former college professor from you, Dan. Those are the kinds of things that I think our audience needs to understand that there is hope. We don’t want to go where you’ve painted this picture. Our frustration and all these issues tend to pile up.

We need a release valve, and this could provide that. Ninety days is not a long timeframe to begin to see some fruit for your labor and some measurable improvements. As we’ve always said, our show are the appetizer, the teaser. If people want to find more information about what you’re doing and how you can help, how can they do that, Dan?

They can reach out to ABOUT, and we’d be happy to give some guidance to them. They can reach anyone on our team. We’re happy to talk to them through stuff.

I think the other thing to remind the readers of is on December 9th, we have an upcoming virtual executive roundtable. We’re going to be talking on this topic again. We’re going to be asking Dan if he’ll be a panelist on that, so people can call in, ask questions and so forth, and dig into this a little bit deeper.

Thank you. Dan, thanks for spending some time with us. All the best to you. You’ve got a lot of challenges, but you’ve got a lot of resources behind you to help people with this. That’s a very fulfilling thing. Ben, it’s always good to be with you. Thank you again to our readers for spending some time with us with Dan Mullen, who is the VP of Innovation of ABOUT Healthcare. Thanks, everyone. We’ll see you on the next episode.

Thanks, Roger. Thanks for having me. I appreciate it.

Thanks, Dan.

 

Important Links

 

About Dan Mullen

LEDI 86 | Operational TransformationDan has an MBA with an industrial engineering certification from MIT as well as Six Sigma Master Blackbelt certification. Dan joined ABOUT after an over 25-year career in healthcare process improvement and analytics. Including holding several senior operational roles at United Healthcare, Anthem most recently as the VP of Analytics at Optum.

Turning Disruption and Change into Peak Performance

Fill the fields below to proceed with downloading the whitepaper.

Name