Six Sigma SpotLight: Joe Calvaruso & Tammy Weidner

Six Sigma SpotLight is a regular feature of the e-Zsigma newsletter, and allows us to introduce one of the global six sigma community's superstars.

In this issue, it is our great pleasure to introduce Joseph Calvaruso, President and CEO of Mount Carmel Health System, www.mchs.com, and Tammy Weidner, VP of Six Sigma. Columbus-based Mount Carmel offers a broad range of healthcare services in the central Ohio region and treats more than a half-million patients each year. The Mount Carmel family includes three hospitals - Mount Carmel East, Mount Carmel West, and Mount Carmel St. Ann's - and approximately 8,000 employees, 1,200 physicians and 1,000 volunteers.

Over the past year and a half, Mount Carmel Health System has embraced Six Sigma as a business management system that identifies and resolves problems that occur in its operational processes that may be sources of dissatisfaction for patients, employees, and physicians, as well as to dramatically increase efficiencies at a time when health care institutions struggle with limited funding and resources, increased demand on services, an aging population that is living longer, and mounting technology and pharmaceutical costs.

How can a methodology and toolset, that has its origin in manufacturing over twenty years ago, be applied to health care? What has Mount Carmel learned in their two year journey with Six Sigma? We'll let Joe and Tammy provide us with some insight…

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1. News: "Mount Carmel Health System was one of the first large health care institutions to implement the Six Sigma Business Management System in a big way – and that was only in year 2000.  Can you describe some of the compelling events that led you and your management team to this major decision?"

1. Joe: "We were in a period of financial challenge which was the case for most healthcare organizations at that time…just basically breaking even…in fact, we had a period of four months, from December through March (2000), where we actually lost money.  Revenues were pretty flat with healthcare, with managed care, and the Balanced Budget Act – our payers were, in effect, giving us no increases every year and yet expenses were rising very rapidly.  We had… labor shortages, so we have to pay more to attract people… supply costs increasing, new technology coming out, new drugs… rising bad debt costs as a result of a downturn in the economy, so we knew we had to fundamentally change the way we ran this organization.”

Secondly was… a very high staffing turnover rate – the industry average approaching 20%.  At our highest point, we had a 24% turnover in a year.  We viewed that as evidence that something was wrong – something had to change.

Also, the 5th leading cause of death in this country is mistakes that are made in healthcare systems.  If you listen to quality gurus like Deming, they tell you that 85% of the mistakes that are made are systems problems – they are process problems… there are flaws in design, rework, duplication… there are mistakes built or design into the process – only 15% of the time is it human error.  The industry of healthcare needs to change so that we’re not the 5th leading cause of death – not having nearly 100,000 deaths per year as predicted by the Institute of Medicine.

We needed to do something to fundamentally change health care.  It couldn’t be about incremental change anymore.  The problems were too immense.  We needed breakthrough change.  We’d been reading about the success of Six Sigma at companies like Motorola and General Electric… really taken by Jack Welch’s comment that (Six Sigma) was the most important initiative ever undertaken in the history of their company… woven into the entire fabric of the organization.  

We thought that if there is an organization as successful as General Electric utilizing Six Sigma, then maybe there is an opportunity for health care.  We went and talked to people who had invented Six Sigma and who were infusing it, or deploying it into other organizations, and we asked, “Is this being done in healthcare?”  We wanted to go visit places to see if this works… the answer was “no”.  At first, we were disappointed… perhaps, this couldn’t be done in healthcare.  But then, we thought, someone has to be first in this industry to do it – why can’t it be us?  So that is why, for all of those reasons, we decided to embark on that journey."

2. News: "I recently read your November, 2002 testimony before the Senate Health, Human Services, and Aging Committee with regard to concerns about for-profit limited-service hospitals – a model being considered by many States as well as in Canada.  Can you share some of your thoughts on this subject, and what role you believe Six Sigma can play in raising the bar for health care performance at a time when ability to meet increasing demand and expectations of services, as well as rising technology and pharmaceutical costs is in direct conflict with today’s reality of limited or reduced funding and resources?"

2. Joe: "Well, we’re very concerned about the potential for limited-service for-profit (LSFP) hospitals to enter.  The non-profit hospitals last year in Columbus (Ohio) alone provided over $200 million dollars of charity care to residents of central Ohio, and if there are limited service hospitals, they will have the ability to direct the best-paying patients – the patients that will have the best financial outcome to those hospitals thereby limiting the non-profit hospital’s ability to provide healthcare.  

Now, one of the reasons the Mount Carmel physicians have stated as to their interest in LSFP hospitals is that they can’t get on the operating room (OR) schedule at one of our hospitals.  So, we have several projects addressed to the whole category of throughput and OR capacity – addressing issues like OR throughput, OR turn-around time, procedure-based delivery – to make our operating rooms more efficient, much more effective, and have higher patient and physician satisfaction.  

We think that will inspire the physicians who are saying, “we’re interested in other options”, that will entice them to stay with Mount Carmel, and therefore, limit the impact of those “for-profit” hospitals."

3. News: "In a brief interview you gave to Healthleaders, Inc. earlier this year, you stated that Mount Carmel’s trained Six Sigma project managers, that are referred to as “Guides”, will complete five projects over two years, with each project generating an average (annual) savings of $75,000 to $100,000 each.  I also read that you have 44 Guides trained for this purpose since June of 2002.  With that in mind, that would put your total benefit to date since starting Six Sigma to be in the neighborhood of $10 million of annualized, recurring cost savings, with an additional $10 million in current or future projects.  With an annual budget in 2002 of $675 million, that equates to a 3% operating cost reduction by year two.  Are my numbers correct?  What financial benefits have you seen to-date since implementing your Six Sigma business management system, and what do you see in the future?"

3. Joe: "It has been less than two years (since we started) working (Six Sigma) projects, and right now, we have over $17 million dollars of financial benefit to Mount Carmel, and that number is rapidly increasing.  We think that for this last fiscal year alone, July 1st to June 30th, we are going to come in with $12 to $14 million.  

In addition to the numbers, there are many, many benefits.  Patient satisfaction.  Just increasing throughput, reducing the amount of time that people wait in the emergency department for care, or reducing the number of squads that get diverted from our ER’s.  Turnaround time in our CT scanning so that people have to wait less time for test… Patient satisfaction is dramatically increasing as well as physician satisfaction.  When you’re a surgeon, the number one benefit for you is to do your cases in a more rapid turnaround time – to do more per day or at least, to have to spend less time in the OR’s, so things like reducing our room turnover time – having the right equipment that is exactly what the want for the procedure they are doing is very much a physician satisfier. 

And finally, employee satisfaction – no employee likes to work in an environment where the processes are designed poorly – where there is rework – where there are inefficiencies – where there’s duplication of effort – and where there are mistakes designed into the system.  We have testimonials from our employees thanking us for bringing Six Sigma in because it has made their jobs much easier." 

4. News: "When I speak to health care providers about Six Sigma, I am often troubled by the tendency to draw references to manufacturing and industry, where this strategy has been so successful over the last 20 years.  For example, one could equate bed availability to a manufacturing environment with inventory, work-in-process, re-work, scrap, etc.  While, in practical terms, this is exactly how we need to approach Six Sigma in the health care environment, it is not how we might apply it from a real or human sense.  There is, at least for me, an underlying sensitivity.  We are not talking about inventory and raw material… we are talking about people and life and death.  You refer to your 2000 launch of your Six Sigma system as “Soulful Six Sigma”, and this was done in conjunction with another innovative training program you brought to Mount Carmel, “Higher Ground Leadership”. Can you give me some insight into your philosophy at Mount Carmel, and what makes your Six Sigma system different from a culture perspective as well as for healthcare in general?"

4. Joe: "At the same time that we concluded that we needed to fundamentally change the way we do things with processes, we also realized that many people felt that Mount Carmel was losing its soul.  We in the healthcare industry have to continually require our people to do more and more with less and less.  We realized that part of the problem is that we have process design opportunities, but the other part of the problem is that we need an environment where people are inspired – where they want to come to work on Monday morning – where they feel good about their job, and where they enjoy the work they are doing, and the people their doing it with – that they also have a good relationship with the person they report to.  We decided that we needed to fundamentally reawaken the spirit and values and reclaim that soul of Mount Carmel that we’ve been known for, that has a palpable feeling to it – that people really love the caring environment.  

So, we embarked upon this Higher Ground Leadership (HGL) journey, which has two major areas of focus.  One is a leadership development focus, whereby we focus on the values that we want at Mount Carmel… where those values are reawakened.

We have a variety of experiences that tap into people’s values… talking about how to be an inspired leader… value-centered leadership… how to conduct “truth-telling” circles…  the importance of being an authentic leader – being a real person… the importance of asking the right questions – not just having the answers.  We do a lot of inner journey work where people look into what is their passion and what are their talents, and identify why they are here on this Earth…. What is their destiny?… what is their calling in life?

The second major component of HGL is changing the culture.  Aligning our human resources …consistent with the values of HGL. 

Now, how does that relate to Six Sigma?  That is why we call this “Soulful Six Sigma”…If we feel there are going to be job eliminations due to a Six Sigma project, we right up front, bring in the human resources team and HGL team to help people identify what are their strengths – what kind of things do they like doing, so that they can find some other position within Mount Carmel where they can fulfill their calling.  We’ve gotten as detailed as even changing the language which we use to infuse Six Sigma.  For example, the word infuse.  Most people say they are going to “deploy” Six Sigma… We felt that usually when you hear the word deployment, you’re talking about troops… We’re deploying troops right now in the Middle East…. usually words of the language of war.  So we changed it to “infusion”.  The terms Black Belt and Green Belt, Brown Belt, other terms… We use “Guides” – using “Master Guide” instead of Master Black Belt would be more compatible.  We wanted to conjure up a softer image for Six Sigma.  So, that gives you some flavor for how our infusion of Six Sigma may be a little bit different than most other places."

Tammy:  "One of the things we believe is that our HGL model – the values – is really the foundation that Joe often talks about as being the primary operating system,… this (helps) Six Sigma Guides when they are actually bringing the teams together… I’ll give a couple of analogies… Number one, is from the onset, there has been a promise that if their job is eliminated, we value them as a person, they are more apt to tell us where the inefficiencies are since they are not in fear that their job will go away.  Secondly, sometimes, the solution to the business problem is pretty intuitive, but what we discover through the process of doing a project is some relationship issues that may be around trust in the past…. we’ll use some of the tools that we learned from our training in HGL, and try to surface some of those concerns, so that they can be talked about and some understanding – not always resolution – but a greater understanding so that we can put a process where it needs to be by dealing with a relationship issue… communication issues that were probably not managed as well as they could be, and we’re able then to identify and correct those things before we move forward with the implementation, therefore making it much more efficient when you actually implement a solution.  It’s the soft-side skills that you need to deal with every Six Sigma project… dealing with people and asking them to change their behavior."

5. News: "I had the pleasure of attending the presentation you made at ISSSP’s Annual Six Sigma Conference in Chantilly, Virginia last year.  One example you provided of the breakthrough results you have achieved in Six Sigma was in operating room utilization rates.  I can’t remember the exact numbers, but I think you quoted an industry standard of 65% versus Mount Carmel’s 90% utilization rate.  What are some of the results that you have seen in your Six Sigma journey to-date that your team at Mount Carmel has achieved?"

Scroll up to right-hand side of page to continue interview...

Joe Calvaruso, CEO, and Tammy Weidner, VP Six Sigma. 
Images courtesy of Mount Carmel Health System. Unauthorized use not permitted.

Click on image to go to Mount Carmel's website

Continued from left panel...

5. Joe: "We can give you both the industry average as well as the Mount Carmel before and after because that has been a major goal.  As I recall, our number when we started a year ago was 56%, and that’s not talking about night times or times the OR is not expected to be open.  We’re talking about open business hours.  We were running at a capacity of 56%.  That was at the hospital where our orthopedists are saying, “I can’t get OR time”.  So, we were only at about half of the time that those OR were supposed to being used.  We felt that this was a tragedy.  We have been working on that, and are now up to 70%, Tammy?"

Tammy: "The Healthcare Advisory board actually has a standard that is 70% for this definition – the top 10% - actually it’s more like the top 5%, and that only takes in the time that the patient is actually in the room.  The best practice out there is 70% and we were at 56%, and we have had the opportunity to implement several projects and we’re currently running at about 64%.  To do this in less than a year, by focusing on those throughput issues,  is really an astounding shift in such a short period of time."

6. News: "In an article published by GE Medical Systems, Mount Carmel’s Senior VP of Finance, and CFO, Russell Garner comments, “Don’t even consider implementing Six Sigma if you don’t have the buy-in and support of your CEO, your senior management team, and your physicians…” Can you comment on this, as well as what it means in a practical sense?"

6. Joe: "(Six Sigma) is a significant management operating system and it requires significant cultural change… there will be people who resist… who will feel that we were doing things the right way already.  Some… saying, “Are you sure we should be spending this money on resources – on people resources – on time resources..”  

There’s also resistance from people who don’t want to give up good people… We have to pay a firm to train these people at a time when financial challenges are so great?… We can’t afford this type of investment right now.  Our answer was that we couldn’t afford NOT to do it now.  That, if we do not do something in the very near future that is breakthrough – a fundamental change – that we’re going to be in a worse and worse situation as time goes on.  

So, the organization needs to have CEO and top leadership support for this because there will be that kind of resistance in pockets of the organization…  

Physicians are a tremendously important group of people that are essential to a smoothly running hospital, but, they’re not employees – they are very intelligent people that are data-driven, and they’re trained to be skeptical – they’re trained to rule everything out until they have proof that it works.  When you’re taking care of a patient, that is good training.  When you’re trying to create organizational change, it is a challenge to overcome.  

So there was resistance early on… and (it) wasn’t until probably this last year, when we started to experience things like, “Hey, the OR turnaround time is different, or lower”, or “I’m having a higher percentage of times when I have exactly the right surgical equipment that I need for this procedure because of the Six Sigma project”, or, “My patients are getting processed through the CT scanner or MRI units faster”.  

We are starting to see a change in the physician’s sentiment – in fact, so much so that we’ve had several physicians come up to us and ask if they can use Six Sigma in their office… can we help them infuse Six Sigma in their practice.  I think that is the biggest compliment anyone can pay us, or the biggest vote of confidence anyone can give us."

7. News: "I read somewhere that Mount Carmel has approximately 1300 volunteers, which represents 13% of the workforce.  Do you, and if so, how do you involve your volunteers in your Six Sigma improvements?"

7. Tammy: "I would consider our volunteers in the very important category as the voice of the customer.  Obviously, we are already two years in from the time when we really began to see the results of projects, so to be real specific as to say we take them off for orientation and those kinds of things would not be where we are at yet, but the same could be said for the general population.  

What we have found, however, is that our volunteers are extremely enlightened on what our customers experience – they’re the ones that staff our information desks… One example that is project specific is the location of wheelchairs – something as simple as that.  We purchase many wheelchairs each year, but they disappear from our campus.  We don’t have access to them when we need them.  

Our volunteers are very important to us for getting the voice of the customer… the whole concept of way finding – they’re critical in that…. Customer satisfaction issues, and they feel every empowered that they are there to share information when they are able to observe issues experience by our first-line patient customers.  They’re really good at sharing that information so that we can incorporate it into potential (Six Sigma) projects."

8. News: "What was the greatest challenge you had to overcome when deploying your Six Sigma business management system, and how did you overcome it?"

8. Joe: "I think that the initial greatest challenge was convincing people that (Six Sigma) was, a possible solution to what was challenging the healthcare industry at the time.  I don’t say it was “the” solution, but it was a solution… that this was a good investment… and investment in time, and investment in people, an investment in money to help us out of the challenges that we were facing.  Many people said we just needed to keep doing what we were doing – just do it a little harder or better.  

Secondly, the identification of the resources – the Six Sigma Guides was a major challenge – to identify the best people we thought would be suited for the job of leading the projects that would be a vital part of our Six Sigma program. You have to remember that for the first wave of trainees, it was much harder because they were the first.  No one knew anything about Six Sigma, yet we were asking them to bet their careers by leaving their traditional roles and dedicating themselves to this new and significantly different program.  

If other organizations have the luxury, make sure they have people that know exactly what they’re getting into.  And they can do that now since Six Sigma in Healthcare is popular.  Back when we started, it wasn’t that popular – you couldn’t even go to other hospitals and say, “What is my job going to be?”  We had to select people, and people had to sort of select us, without the ability to exactly know what they were getting into."

9. News: "If you had to do anything differently with you Six Sigma deployment from the start, what would that be?"

9. Joe: "The top two things I would have done differently is, earlier on,  I would have made sure we focused on the right projects, the right themes, and secondly, gave people a chance to really assess if (Six Sigma) was right for them.  And fortunately, for both of those, we made very quick modifications to the projects and where able to learn quickly that we needed to focus on themes, and it didn’t cost us too much time by focusing on the wrong projects.  Fortunately, we have been able to adjust very quickly."

Editor’s Note:  As mentioned in an article by Mount Carmel’s CFO, Russell W. Gardner, which appears in GE’s CFO Profile: “Setting Up Six Sigma System Not An Easy Task”, their Six Sigma project focus is based on six themes, which include, Revenue Realization, Bad Debt Reduction, Patient Throughput, Labor/Right Staffing, Labor Retention & Recruitment, and Patient Safety.

10. News: "If you had to do anything differently with you Six Sigma deployment from the start, what would that be?"

10. Joe: "Well, the new eyes is a new way – a scientific way – an organized way – a statistically-based way to approach the most challenging issues that we’ve been faced with for years and not been able to solve.  For example… we have one of the busiest emergency department at one of our hospitals in the State of Ohio… we also have the highest diversion rate, meaning we close the emergency department to squads who want to bring patients.  A couple of years before Six Sigma, we hired an emergency department physician and other people to improve the throughput.  They worked on it, and we thought, you know, we’re going to assign our best team to it, and it wasn’t able to effect any change at all.  Now, with the use of Six Sigma, the tool, the statistical methodology, the DMAIC methodology, we were able to improve our throughput.  So, it’s a new way of solving the most challenging problems that has faced us and frustrated us for years.  It’s a common language.  We have people throughout the organization talking about some of the Six Sigma terms.  It makes organizational change easier if we are all speaking the same language.  We also have a new view of entitlement.  Our old view was if we could improve anything – even if it was a slight improvement – that was okay.  Our (new) view is, we have entitlement that goes up to as high as 70%.  In fact, we look for 70% improvements in a short period – a four to six month period. We have a whole new attitude about project management, and a whole new attitude about the importance of change management… that brings a whole new sophistication to our organization that we didn’t have before.  We have a focus on measurement that we didn’t have before. Our sophistication of knowing which projects to work on is much more improved.  We have a whole new attitude about variation that we never used to have.  We know we need to improve the mean (average), but we also know we need to reduce the variation in processes.  We have a new attitude about sharing among campuses.  For example, we had a major project on CT Scanning throughput at our East hospital.  Our St. Ann’s hospital took it - and they had a goal of $2 million dollars for this year for Six Sigma – they accomplished their entire goal and then some on that one project alone, that they didn’t even need to invent – they just borrowed from the other hospital. .. so there’s a new attitude about (sharing) at  Mount Carmel.  I guess the final thing I’ll say is that we focus on the critical few variables – what are the major things that are going to drive change?  We don’t look at all the variables because it is too complex.  We concentrate on the critical X’s, and that helps us stay focused on the few things that will impact us the most.  Those are the new eyes in our voyage of discovery that make this organization so different than it was two years ago...  It’s not even the same organization now."

Editors Note: It was extremely difficult to distill the interview with Joe and Tammy into a reasonable length for this article, without diluting or excluding valuable information.  Hence, very little has been left out from the actual interview transcripts.  If you are interested in obtaining a copy of the complete interview, please mail your request to news@e-zsigma.com.

Rod Morgan, e-Zsigma, Inc. 

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