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HowardCenter Finds Success in Applying Value Stream Mapping to a segment of their Revenue Cycle Process
HowardCenter is a non-profit organization that provides services to children with serious emotional and behavioral challenges, adults who need mental health and substance abuse treatment, and children and adults with developmental disabilities. Last year, HowardCenter served over 15,000 individuals and families at more than 50 agency sites throughout Chittenden County and beyond. They employ approximately 1,200 full and part time employees.
What began as an IBM-sponsored project to help HowardCenter reduce its energy use grew into a collaborative effort partnering with VMEC to assist them with their internal work flow and looking forward to increased efficiency in the future starting with what proved to be a $300,000 savings in recovered revenue over ten months.
IBM was awarded a $100,000 grant in 2011 to help HowardCenter and Vermont Technical College reduce their energy consumption by at least 5% annually partially through the use of energy management strategies developed at IBM’s Vermont facility. The grant was made as part of IBM’s 100th anniversary, and was one of only 10 Centennial Grants awarded by IBM to projects around the world, and one of only two in the U.S.
Through this grant, HowardCenter was introduced to VMEC by IBM. HowardCenter was unaware of VMEC, their expertise in Lean process improvement and was unsure how VMEC could assist them in their non-manufacturing setting. IBM convinced HowardCenter their efforts would be well worth their time. To provide exposure to VMEC, Charles Stringer, Director of Finance and Administration and Russ Stratton, IT Director, took part in a Fundamentals of Lean Office public workshop hosted by VMEC in October 2011. This session acted as the springboard to bring VMEC into HowardCenter, to expose their support staff to Lean tools and techniques, to identify gaps in their office processes and to provide guidance for improvements. Over the next several months, a series of on-site Lean Office, Structured Problem Solving, Office 5S: Office Organization and Standardization and Value Stream Mapping sessions took place at the HowardCenter main offices in Burlington.
Upon completion of the VMEC training sessions, the primary focus of the Lean initiative was for VMEC to provide coaching and support of tasks related to improving billing processes. During the Revenue Cycle Value Stream Mapping Project VMEC‘s objective was to coach the on-site Lean Team Managers and focus team efforts on quantifiable improvements and results. Prior to the Lean project work with VMEC, HowardCenter was not able to capture nearly $1 million annually in revenue linked to denied claims activity. These included such things as no pre-authorization, not meeting contract parameters, lack of coverage, timely filing and incorrect deductibles / co-pay fees, just to name a few. Billing lag time, mostly from the front end – date of service to date of denial – was taking place. By applying the Value Stream Mapping process and adapting revised methods to the billing claims workflow, HowardCenter was able to recognize savings of nearly one-third of their lost revenue in less than a year’s time.
Early in the process, some staff members were skeptical with the proposed changes. Now they see, as a team, they’re headed in the same direction and have realized success. This generated the necessary momentum to move forward. There is ownership in the efforts that have been made and visual controls placed in high traffic areas such as break and mailing rooms are constant reminders that this employee effort is recognized and appreciated.
As a wrap up to the first year’s efforts by HowardCenter and VMEC, a Strategic Deployment planning session took place in July 2012 with HowardCenter’s Agency Leadership Team to review their successes, contemplate their future actions and map out a True North statement.
Another project that Charles would like to undertake in the future is the evaluation of time sheet processing and how to alleviate the repeated errors and amendments that occur each pay period. He also envisions training and assigning Lean Team Managers to Service Areas in efforts to sustain the progress that has been accomplished.
Charles commends VMEC and specifically Bill Kuhns, Professional Manufacturing and IT Advisor, with the success of the project. “We had not been exposed to VMEC and their services prior to receiving the IBM grant last summer. The training and workshops enabled us to get the right people in a room, identify our problems and formulate solutions as a team. Our organization is complex, both from a funding and service delivery perspective. VMEC helped us get to a better place than where we were ten months ago and the savings to us is something we never anticipated. Many businesses could benefit from the Lean techniques we learned and applied to our business processes. We are very grateful to them.”