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Measuring value:crafting a value model for Kaizen Events for the MRI scanning process within Philips Healthcare

Viegen, G.J. van (2009) Measuring value:crafting a value model for Kaizen Events for the MRI scanning process within Philips Healthcare.

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Abstract:	Background Royal Philips Electronics N.V. consists of three divisions: Healthcare, Consumer Lifestyle and Lighting. Within Healthcare, Philips offers utilization services for the MRI modality to its customers. One of these services is the Kaizen Event, which is a one week event at the customer site to improve utilization of the MRI scanner. Objective The Kaizen Event service has been offered in the market for one year, and is in the pilot phase. As a result, Philips has not yet focused on measuring and communicating the value for the customer of the Kaizen Event. By demonstrating the value for the customer, Philips shows that it understands the customer and that it is in the customer’s best interest to buy the Kaizen Event service. In this context, the objective of this research is: “To craft a value model for Kaizen Events for the MRI scanning process in healthcare facilities that explains how value is created and what the benefits are”. Value model The Kaizen Event aims to reduce examination duration and has impact on productivity. The value model explains how value is created with the Kaizen Event by five Value Word Equations, which conceptualize examination duration reduction. The value model also explains what the benefits for the customer are. In case there is a waiting list for MRI exams, three benefits can be applicable: a monetary benefit due to increased reimbursement, a social benefit due to reduced access time and an external consultant benefit. In case there is no waiting list for MRI exams, three Master thesis G.J. van Viegen University of Twente 10 benefits can be applicable: cost reductions, freed up time for other value adding activities and an external consultant benefit. Cost model Parallel to this research, a cost model was developed (Kuwornu, 2009) that functions as input for the value model. The cost model allows calculating the costs of different MRI exams of the healthcare facility and what the incremental costs for extra exams are. Case studies We conducted four case studies. The goal was to find out the usefulness of the value model in practice. For the case studies, we chose different types of healthcare facilities to find out differences in value creation. We chose different countries to find out how benefits differ. The most important results are: Ziekenhuis Rijnstate (The Netherlands): an exam duration reduction of 09:10 minutes can be realized. This will lead to 5,052 extra MRI exams per year. The main benefit is access time reduction for patients. Universitair Ziekenhuis Brussel (Belgium): an exam duration reduction of 07:40 minutes can be realized. This will lead to 3,254 extra MRI exams per year. The main benefit is a net value of € 310,824 in first year. Institut für Radiologie Kapfenberg (Austria): an exam duration reduction of 01:00 minute was realized. This leads to 505 extra MRI exams per year. The main benefit is a net value of € 19,348 in first year. Krankenhaus der Barmherzigen Brüder (Germany): an exam duration reduction of 04:05 minutes can be realized. This will lead to 660 extra MRI exams per year. The main benefit is access time reduction for patients. Master thesis G.J. van Viegen University of Twente 11 We sent value propositions to the case study objects and enquired how convincing the value propositions are to them. The main feedback responses were: “The five Value Word Equations are convincing and easy to understand for explaining the potential time savings in exam duration” (Mr. Twilhaar, ziekenhuis Rijnstate, The Netherlands) “The average unscheduled time of 1 hour and 35 minutes is shocking and provides great insight for potential time savings” (Mr. Twilhaar, ziekenhuis Rijnstate, The Netherlands) “The outlier analysis for conceptualizing patient‐change‐over time reduction makes sense. The 20 seconds reduction which is calculated for our facility is approximately accurate” (dr. Sulzer, Institut für Radiologie Kapfenberg, Austria) Conclusions and recommendations Our main conclusions are: ‐ The Value Word Equations are easy to understand and convincing. During the research and case studies we did not encounter any Kaizen Event improvements/recommendations that can not be captured with one of the five Value Word Equations. In that sense we conclude that the Value Word Equations succeed in explaining how value is created with a Kaizen Event. ‐ Regarding the different types of healthcare facilities, from the case studies we found that value is created with different Value Word Equations. We can not conclude a significant difference based on the four case studies, but nonetheless are the differences interesting to observe. ‐ Regarding the different countries, from the case studies we found that Belgium and Austria have a direct monetary benefit from extra MRI exams. For The Netherlands and Germany the monetary benefit is less clear due to Master thesis G.J. van Viegen University of Twente 12 the more complex DRG reimbursement system. In these cases, the social benefit of a reduced access time for patients is the most interesting benefit. Our main recommendations are: ‐ Approach potential Kaizen Event customer more proactively. ‐ Organize at least two comeback sessions in the first year the Kaizen Event takes place. ‐ The Philips Kaizen consultants should work more with SOPs and further develop the best practice MRI scanning process, so the Kaizen Event service can be further professionalized. ‐ Prior to conducting a Kaizen Event, map the healthcare facility’s problems and place them in Van Houdenhoven’s framework for hospital planning and control. This allows Philips to assess whether a Kaizen Event is the appropriate improvement method or a more radical improvement method is necessary. ‐ Introduce value‐based pricing for Kaizen Events, since Philips can demonstrate and communicate the value for the customer with the value model.
Item Type:	Essay (Master)
Clients:	Philips
Faculty:	BMS: Behavioural, Management and Social Sciences
Subject:	85 business administration, organizational science
Programme:	Industrial Engineering and Management MSc (60029)
Link to this item:	https://purl.utwente.nl/essays/60653
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