NewYork-Presbyterian Hospital has signed a seven-year contract with General Electric Medical Systems to bring in GE's management techniques to help the hospital run more efficiently. The partnership is expected to save the hospital from $150 million to $200 million.
The arrangement greatly expands the current relationship among NYPH, GE and Columbia University Medical Center, which have been working together for the past year on ways to improve stroke treatment using more advanced imaging methods. GE provided a $2.5 million, two-year grant to NYPH and CUMC to fund the research in January 2003.
Dr. Michael Berman, executive vice president and director of NYPH and professor of clinical pediatrics at P&S, spoke to In Vivo about what the agreement means for the hospital and Columbia faculty and students.
All hospitals are constantly struggling to meet revenue expectations and efficiency standards. As we looked around, there were companies in other industries, such as Cisco Systems in information technology and AIG in insurance, that have learned to run businesses in a more cost-efficient way, while still providing a quality product.
After evaluating other companies, we decided to go with GE, which has traditionally been a well-run company and has as customers organizations such as Johns Hopkins Hospital and Health System. We will be far ahead of where our industry is currently if we transfer the way GE is run, the way they evaluate and reward personnel, and the tools they provide their employees to deal with change. We also did a survey where our employees told us they don't have the best tools to evaluate and reward other employees nor to evaluate how we're doing versus other hospitals. GE will help our managers, for example, conduct better performance and overall reviews to evaluate personnel and make sure they are being deployed properly.
The technology part of the deal will help us spend our money more wisely to enable us to better anticipate where the next generation of equipment is going. Being on the cutting edge is particularly important for us because of our affiliations with Columbia and Cornell, two research-intensive universities. We plan to collaborate with GE to test the newest equipment and help drive GE's medical technology agenda.
We will be one of the first hospitals in the country to have access to flat panel digital mammography, digital X-ray, and latest generation computed tomography (CT), magnetic resonance imaging (MRI), positron emission tomography (PET) and other imaging technologies as they become available. Using these machines in the most efficient way might help us double the number of patients we can handle in a day in the MRI or CT imaging areas. Then the dollars begin to work for you. You get more patients through, and capital costs go down. And more patients are more satisfied with the improved efficiency. Currently, X-ray machines and technology cost us $40 million a year. We'll save somewhere from $6 million to $8 million a year in that area alone.
The GE management systems we purchased are the Six Sigma statistical methodologies; Change Acceleration Process (CAP) strategies; and team-based problem solving techniques called "Work-Out." GE will work with us for three years, at the end of which we will have trained our own people on the GE systems and we'll do our own projects.
Six Sigma, a statistical term that signifies a nearly error-free process, uses a statistical measure to analyze routines such as emergency room patient flow or medical errors to track them to see the impact of any changes you make. You set whatever standard you'd like as your guideline, such as not allowing wrong-sided surgery. This will help reduce medical errors because we can better analyze which actions lead to errors and as much as possible eliminate those mistakes. Six Sigma was developed at Motorola and then adopted by GE. The methodology first was applied to jet engine part production to reduce variability and manufacturing errors.
We are concentrating on five areas that affect patient flow for the first rollout of systems in the hospital: radiology, supplies, clinical utilization, bed capacity, and cardiology. We recently finished gathering data and are starting to implement the collection of systems. There will be hundreds of small projects to improve quality and customer and employee satisfaction.
Once you get these systems established within an organization, people's time is better used. It's almost breathtaking to watch a meeting run by an organization that has gone through this process. You end up with a finished report at the end of a single, one-hour Work-Out session.
Yes, there is a big learning curve for our staff. We are working to tailor training for physicians, residents and students. Doctors don't have the time for extra meetings so we're making the sessions as focused as possible. The thing for people to remember is that they will be able to work better and faster using their new skills and tools. Our ultimate goal in incorporating these new systems is to attract and retain both patients and staff.