How lean strategies saved a NH critical access hospital from financial ruin

Peter L. Gosline, president and CEO of Monadnock Community Hospital, was at a crossroads in 2009. The 25-bed critical access hospital faced a huge deficit as a direct result of an unexpected ice-storm that hit the state of New Hampshire in December 2008, causing a two-week power outage. The hospital was in crisis.

"I had to pull a rabbit out of a hat," recalled Gosline (pictured right) in an exclusive interview with FierceHealthcare shortly before he retired this month as head of the Petersborough-based hospital. "And I didn't want to do a layoff."

Fortunately for the hospital and the region, he decided to look into other options. The hospital's lab department had some success following a lean Six Sigma model, so Gosline and his team pursued the strategy hospital-wide.

Gosline highlighted the success of the hospital's five-year "lean" journey during the American College of Healthcare Executive's 2014 Congress in Chicago, a model that he estimates has saved the organization $1 million a year.

"We created a level of motivation that surpassed my expectations," he said. "We have had significant savings and we improved our processes and the patient experience."

The business management strategy addresses process flow and waste issues, while focusing on variation and design to promote business and operational  excellence. The hospital worked with an outside firm to identify what the organization wanted to achieve, provided selected managers with "lean training" and then created five hospital "work out" teams that met five times over a 120-day period.

The teams asked every manager to come up with two ideas every 30 days for three months, to improve processes and reduce waste. Those ideas in the first 120-day period generated estimated savings of $800,000, according to Gosline. "It seems so simple, to ask people who know the processes to bring ideas to the table and then act on those ideas, but it works," he said.

Each team reports monthly results and celebrated successes during meetings. "One of the keys is the recognition component. Everyone likes to excel and being recognized for it," he said. "The teams looked forward to the meetings, and in between, people helped each other and supported each other. It really built up morale."

One change that had an immediate impact was improving the patient flow through the emergency room (ER), Gosline recalled. Prior to implementing the lean process improvement, hospital patients could wait several hours to receive treatment and discharge instructions. "We aimed to get that to less than two hours, which was pretty good for an ER door to door," he said. "We had to focus on the details, process to make sure we were doing things as efficiently as possible. And since then patient satisfaction went up, we saved money and the quality of service improved."

The hospital also incorporated lean strategies into a new ER design in 2010. For example, the team wanted to make sure patients had direct sight of the nurses' station from the moment they walked into the ER. "The result was a superior design," he said.

Staff responded to the lean movement from the beginning, Christine Pillsbury, director of wellness operations and business process at Monadnock, (pictured right) who also serves as one of the work-out coordinators, told FierceHealthcare. "In some ways we didn't have much choice. We were in crisis and we had to try something. Most people were on board right away but it was a challenge," she said.

The hospital succeeded because it continued seeking new ideas and process improvements after the initial achievements, Pillsbury said. Mangers must still come up with two process changes or ideas each month, and staff members are also involved. "It's built excitement and engagement with frontline staff and together we are problem solving and generating ideas," she said.

For example, Pillsbury said, one team is working on redesigning the hospital's referral process for patient rehabilitation so that when appropriate, doctors refer patients to services at the hospital rather than another setting. "These are small changes but big wins. We are keeping the patients in the community and everyone is happier," she said.

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