E6S-159 Shana Dykema - Task Driven Activity-Based Costing in Healthcare at MUSC Part 1

E6S-Methods Lean Six Sigma Performance Podcast with Aaron Spearin & Jacob Kurian

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Intro: Welcome to the E6S-Methods podcast with Jacob and Aaron, your weekly dose of tips and tricks to achieve excellent performance in your business and career. Join us as we explore deeper into the practical worlds of Lean, Six Sigma, Project Management and Design Thinking. In this episode number 159, we speak with healthcare improvement specialist, Shana Dykema, on her work applying Task Driven Activity-Based Costing, (TDABC), at the Medical University of South Carolina. If you're just tuning in for the first time, find all our back episodes on our podcast table of contents at e6s-methods.com. If you like this episode, be sure to click the "like" link in the show notes. It's easy. Just tap our logo, click and you're done. Tap-click-done! Here we go. http://bit.ly/E6S-159 Leave a Review! http://bit.ly/E6S-iTunes

I Who is Shana Dykema?

Biography: Shana Dykema, MHA, CPPS is an Improvement Facilitator in the Performance Improvement Department at the Medical University of South Carolina. She is a Certified Lean Six Sigma Green Belt and a Certified Professional in Patient Safety. Prior to joining MUSC, Shana managed the South Carolina Hospital Association’s High Reliability and Just Culture initiatives in 26 hospitals across the state. Her experience also includes clinical rotations in multiple specialty areas, and over six years in healthcare clinical, laboratory, and translational research.

Shana received her B.A. and Master’s in Healthcare Administration and attended medical school at the University of South Carolina. She is a member of the American Society for Quality, Institute of Industrial & Systems Engineers, Society for Health Systems, National Association for Healthcare Quality, and International Society for Performance Improvement.

a. How did you get into Healthcare?

b. What is Healthcare Administration vs. other Healthcare degrees?

c. How did you get into performance improvement as opposed to other parts of administration?

II Tell us a bit about MUSC. Medical University of South Carolina – Changing What’s Possible

a. http://www.muschealth.org/pn/yir-2014/quality/high-reliability/index.html

III What is TDABC? Time-Driven Activity-Based Costing-

a. Costing system used to more accurately and easily assign costs to process steps using two parameters: cost of each resource and the quantity of time required.

IV Why is TDABC better than other methods?

a. Traditional ABC: staff estimates a percentage of time given to a total task, not individual steps

i. Time estimates aggregated for whole process

ii. Difficult to identify waste

b. RCC (Relative Cost to Charge): total cost/total charges; this ratio is then multiplied by a diagnosis’ charge to obtain its cost

i. Difficult to find true cost

ii. Difficult to identify waste

c. RVU (Relative Value Unit): a service is assigned a value that reflects its relative effort, skill, and training required to complete; total expenses are divided by total RVUs to generate a cost per RVU

i. Overestimates specialty care

ii. Underestimates primary care

iii. Difficult to identify waste

V How to perform TDABC analysis:

a. 1. Choose your process.

b. 2. Define your process cycle or value stream.

c. 3. Develop your process map(s).

d. 4. Obtain time estimates for each process.

e. 5 & 6. Estimate the cost and capacity of resources.

f. 7. Calculate your total cost.

VI How is TDABC helpful with Lean?

a. Waste identification?

b. Does this work better than a Value Stream Map or Value-add Flow Analysis?

VII How is TDABC helpful in Healthcare?

a. Does TDABC affect how healthcare costs are allocated or paid for?

VIII What are some challenges with this method?

a. Technical/tactical challenges with performing the TDABC analysis?

b. Social/Organizational Change challenges?

IX Better information = better decisions (solutions to implement, implementation complexity, strategic decisions, etc.).

X Is there anything you'd like to add that I haven't asked you about?

XI If anyone wants to get in touch with you, what's the best way to do so?

email: [e-mail]

Outro: Thanks for listening to episode 159 of the E6S-Methods podcast. Stay tuned for the second half of this interview with Shana Dykema and her work using TDABC at MUSC. Don't forget to click "like" or "dislike" for this episode in the show notes. Tap-click-done! If you have a question, comment or advice, leave a note in the comments section or contact us directly. Feel free to email me "Aaron", [e-mail], or on our website, we reply to all messages. If you heard something you like, then Clammr and share it. Don't forget you can find notes and graphics for all shows and more at www.E6S-Methods.com. "Journey Through Success. If you're not climbing up, you're falling down." Leave a Review! http://bit.ly/E6S-iTunes

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