Reduce Medical Costs for America

Reduction in Medical Costs Idea

            I want to present an idea, using our U. S. history of private enterprise, to reduce health care costs, while providing better care using better equipment, more effective medicines, better procedures, and effective use of human resources. This idea is as follows:

            In most larger cities that three or four major medical hospitals and corporations today vie for patients in order to pay for their vast overheads, state of the art equipment, and keeping doctors compensated for sending them patients. Each major health care facility normally has several satellite hospitals, doctor's offices, and what I call 'Doc in a box' (Dib) facilities located in drug stores, food markets, or as stand-alone emergency facilities.

            This mix of facilities provide good care for their local patients. Occasionally, a “Doc-in-box” will have a patient walk in that requires more extensive treatment than their facility can do, so they refer the patient to a regional hospital. If the person's needs exceed the staff or equipment at their facility, the person will be transferred to a major facility located in a central hub where care is available. The various transfers are accomplished by ambulance or helicopter.

            One major cost not associated with health care is the unbelievable amount of paper forms required and flowing between facilities, doctors’ offices, insurance companies, governmental agencies and patients is the huge amount of paperwork required by the government payers as well as private payers that must be filled out and input to database and completed by the Health Care providers staff. The information on each piece of paper must be clerically read, and entered into computer files, faxed, mailed, Emailed, etc. Most of the paper does not pertain to healing a person's body and mind, but to assuage the requirements of government participation and payments in the health care marketplace.

            I know when I visit a doctor, I must complete 8 or more pages of medical and private history and financial information which must be entered into a computer database, open to God only knows whom.

            Consequently, I believe the health care system should operate as follows:

1.     The Federal Government would be removed from the US Health Care System with exception of the Center for Disease Control and Prevention. I do not find Health Care in our Constitution or Bill of Rights, so it is not a US Federal Government mandate.

2.     Each major health care facility in a region in the US would be licensed to offer annual individual and family health care insurance policies good only for their specific hospitals, satellite hospitals, satellite doctors’ offices, and 'Do-in-the-box' facilities. The present insurance commissioners in States would certify the viability of an issuer of medical insurance the same is done today for major insurance companies issuing policies in a State.

3.     These policies could be crafted similar to auto insurance policies ranging from basic health care to concierge care which might include private hospital room, same day doctor appointment, gym passes, periodic health checkups, etc.

4.     The cost of a policy could vary depending on the policy holder’s attention to taking good care of their own physical well-being. This would include exercise programs, eating programs, weight control programs, etc. If sponsored by an employer, the group policy could take into consideration the same areas for payment.

5.     As a State has many Health Care policy issuers authorized by the State, a State would create a pool of low-income people similar to today’s Medicaid participants. The various Health Care policy insurers would be given an overview of the health care requirements of those in the State pool. The HC Providers would then bid on providing the amount of care or service for which the State would contract. Of course, the policy would be issued by a provider operating in the same neighborhood as the potential patient. The Social Service Agency in a state could assist in funding the contract to bring the low-income policy up to the normal policy standards.

           

Note: Why would a HC Provider bid on a State Contract? The Provider must obtain enough “Sales” dollars to cover the facilities, equipment, utilities, personnel, etc. If these costs are not covered periodically facilities must be shut down or personnel laid-off. This is the last thing a CEO would want is to lose good trained staff, or good facilities, or forego new and better equipment. Consequently, there would be an ongoing push for a Provider to have lower costs, better care, heal people faster, and get the patients well and out the door. In addition, they would desire to provide well care, so their policy holder would not need to come into the facility as a patient.

5.     Also, a Health Care Provider is judged on the Internet where a patient/policy holder could negatively or positively report on their care and treatment. This would alert their fellow potential policy holders to change policies at the next anniversary or to 'jump-on-board'.

6.     A person could change policy facilities issuers annually as now done in the Medicare/Drug open window policy change period.

7.     In addition, State Health Care Inspectors would continue to operate as they do today.

8.     In each area there will be individuals that require an excessive amount of health resources. The premium for those requiring ongoing excessive amount of treatment such as paraplegic care, stroke, major heart problems, transplants, etc. would be much higher. It would be necessary to include in general policies an excess charge to cover this care.

9.     Rather than have costly duplicated care within a region, the local healthcare insurance providers would be encouraged to contract with specialist healthcare institutions to provide care such as knee replacement or cancer treatment.

10.  There would be NO free Emergency Care. A policy holder must go to their Policy Issuers Emergency Care facility. Going out of town would require a separate policy to cover the difference the same as traveling overseas does today. (Available today at AMEX)

11.   Each citizen of a region must have a policy to visit a Doctor or Health Care Facility. This is no difference then having a mandated auto policy to legally operate a vehicle in a State.

12.  Each policy can be geared to the amount of care to be provided. This is the same as an auto policy. If you do not need a huge limit, do not buy it. Premiums would have copay or not reflected in the insurance premium cost. Premier Coverage for same day appointments? Sure, just pay a bit extra.

13.   Purchasing of a catastrophic health care insurance would become available. This plan would be used if a plan member suddenly became very ill and would cover thing not covered under the original policy with a health care provider. This is like Plan F under Medicare today.

14.  Nursing Homes would be able to contract with health care providers for their residents. Their contract could include weekly visits by a Doctor or Nurse Practitioner.

15.  Specialists could contract with multiple Health Care Providers as one Provider would probably not be able to afford and keep busy a particular specialist.

16.  Within a family, some members could contract with a provider for their children and others contract with a standard provider. School districts could contract with a provider as well as businesses and government agencies that could use their purchasing power to reduce medical costs.

17.  The Health Care providers could contract with other companies to provide administration and marketing for that provider.

Why would this work:

1.     Health Care providers would be under the gun to heal a person and get them out of the facilities  as quick as possible along with understanding that they will be rated by the patient on the internet services and State Inspectors, and lose money if they do not perform.

2.     The Health Care providers and associates would be under the gun to reduce paperwork and still track the necessary care given.

3.     Providers would make use of Telemedicine and databases of their treatment protocols to facilitate treatment.

4.     New equipment and drugs that have demonstrated healing more rapidly would be used.

5.     There would be an initial scramble to reduce overhead costs such as adding unused facilities, betting on the come, etc. (There is one huge hospital in Houston Medical Center that has never opened since construction was completed several years ago.)

6.     Doctors would want to align their careers with state-of-the-art Health Care providers.

7.     With the battle for policy holders would come cost reductions in Health Care.

8.     Healthcare providers would contract with drug companies to obtain meds as well as pharmacies.

9.     This idea is almost in practice today by Kelsey Seybold Clinic™ and Scott and White Hospital™ in Texas.

This idea is presented by George Koeninger.

I, George Koeninger , have no investment in any Health Care Company or Insurance Company. These ideas are my own caused by my interface with Health Care Agencies or Medical Practice Offices. I find government intrusion into the Health Care Industry like finding Poison Ivy in your yard. It is easy to grow, hard to kill, and causes a bad rash when you try to remove it.

                                                                                    ___________________________________

                                                                                    George Koeninger

                                                                                    2119 River Falls

                                                                                    Kingwood, Texas 77339

                                                                                    George.Koeninger@gmail.com

Quality Best Practice in Home Furnishings Manufacturing

How to Achieve Quality in Home Furnishing

And Manufacturing in General

            How many times in our career have we heard the following comments: “Well, we just lost XYZ account because you ignorant people in manufacturing couldn’t produce a quality product”. From a Sales Manager,” That isn’t what our customer wanted.” From an employee, “Don’t chew me out for that, I made it the way Old John showed me how to do it.” From Order Entry, “Hey Production Manager, I know we haven’t made this style in 5 years, but a major customer of XYZ retailer, just relocated to a new house and wants this old product replicated. Can we do it?”  From a Product Development Manager, “What the heck! You’re telling me that all the samples were sold at the market and already delivered to a customer!!!  How the heck can we remember what we made, how we made it, and what styles we need to develop if we don’t even remember what we shipped?”

           

           If you have worked in manufacturing and/or in Product Development, you have heard these comments and more. No matter your position or title, more than likely, you have been reprimanded at some point in time about quality. The prime reason is that there is no industry wide definition of quality. Today, for the most part, quality is in the eye of the beholder.

           

           It costs money to obtain quality, but not only money, you might need a completely new focus in engineering, marketing, and in production. One of my favorite companies solved the quality definition problem a long time ago and has become the fastest growing and most profitable company in the furniture industry that does not also retail products.

           

           First on your quality program punch list is that there are certain basics that must be defined and developed by each company. For instance, the welts on cushions are straight and match across the product. Seams are always 3/8”, Seat suspension is always done in this manner with this pattern. Frames are always square. Joints in frames are always glued in this manner using this glue. And on it goes. These are the basic manufacturing methods that define your company. These basic items are documented by written instructions and normally the methods are demonstrated by video. The video, if it has voice instructions, must be available translated into all the nationalities in your plants that do not have a good command of the English language, or what ever the main language in your country. So much for the very basics.

          

          Next comes the product definition.

           

          Normally, your Sales and/or Marketing Manager will be working with others outside the company to come up with ideas that will be added to the product mix and be sold in enough quantity to be profitable for the company. The product idea will be given a prototype ID number or name. This idea will be sent to the engineering manager to have a 3D sketch developed of the product either black & white or in color as is desired by the Sales/Marketing people to use to work with their outside contacts. This sketch can be all the way up to full size with special detail highlighted.

           

          This process will go back and forth until both engineering and Sales/Marketing have an agreement that the sketch is close to what they desire.

           

          If the communication is such that a firm example is required such as a finish color, comfort of a mattress, or pitch and suspension of a product, then a representative of exactly what is desired is constructed and agreed upon.

          

           Next a 3D model is printed in Engineering and sent to Sales/Marketing for final review. A final agreement is made along with written detail of what is expected of the product. In upholstery engineering, this would be how soft the padding will be, how firm the seat and back are, how much pitch should be in the back, of course, the dimensions are listed, any packaging that is different from the norm is listed, any special hardware desired such as legs, colors, wood type, finish, hardware, covering desired, buttons, decorative nails, etc. This package goes to engineering.

           

          The final 3D frame deign is made which will include joints, fasteners, padding support such as cardboard, added to the drawing, padding material is specified as to density (firm to soft), seat support is drawn in, (most of this final drawings consist of layers). The layers together make the final prototype 3 D design.

           

          The prototype full Bill of Material is developed and goes to cost accounting to insure the product can be manufactured at the required cost to obtain the required profit and selling price.

          

          Once the final drawing with all component parts is designed, the product is then unwrapped by layer on a computer.

         

          The cover patterns go to the cover design engineer, then sent digitally  to manufacturing cutting, padding, cushions, back fill then goes to the padding vendor, the frame design, checked by the frame engineer, goes by parts detail to manufacturing CNCs to cut the frame. The bill of materials goes to purchasing to ensure all component parts are in inventory for the initial production.

         

         At the first assembly videos are made of sewing for the product, frame assembly, and other areas that might cause questions in production or slow production to get information about the methods used to make the assembly go quickly.

        

        A great job done in engineering is when you can bring a novice from outside the company and have them productive in assembly job in 10 days. This means that all the critical decision are made in Engineering, and ABSOLUTELY NOT ON THE PRODUCTION LINE. If the front of the arm is to be pleated, the pleat folds are marked in the cutting pattern. The pull on an arm or back should be pulled down to a pre marked spot on the pattern such as a small hole or notch. All padding arrives precut to specifications so there is no judgement as to how much or little fill or width and length of a pattern of padding foam, etc.

           

         When I go into a plant and see rolls of any support material, padding materials, sheets of cardboard etc. on an assembly line, I know there is a quality problem in the plant. Not only a quality problem, buy a lack of true cost, a lack of assembly efficiency, a lack of leadership in developing a true engineered product, and on it goes.

          

         A great engineered product by a great engineering team is defined by the fact there is no scissors in the assembly area. If any cutting or change or simply putting rolls of foam or fiber in assembly signifies that that company is doomed to failure due to poor quality and no accurate costs of assembly.

          

         It is a fact that if assembly people are only adding value by performing pure assembly by putting an engineered part in place on a product without having to go find anything, or go ask someone how to do something will yield a profitable company with high quality.

        

        In addition, the same product can be made 10 years apart and achieve a mirror image. Fire and/or flood will not destroy the company if everything is digitized and stored in a digital cloud somewhere.

           

         So there you have a definition of quality.

  QUALITY IN MANUFACTURING IS THE EXACT ADHERENCE TO SPECIFICATION –                                                    PERIOD.

           

        Who is responsible for quality in a manufacturing plant?

1.     The CEO, COO must ensure their operation conforms to best practice.

2.     The Sales/Marketing Manager must provide accurate communication with focused definitions of what the customer expects in a continuous received specified product for a given purchased price.

3.     Manufacturing Managers must demand accurate detailed specifications and ensure those specifications are met within their production.

       If you have any questions, drop me a line at George@bfcconsult.com

Case Goods Manufacturing in the United States

For many years I have held in very high regard those manufacturers of “Case Goods” or wood finished furniture who had the intestinal fortitude to tough it out as United States Manufacturers when most case goods manufacturers packed up and left the US because they needed cheap product to enable them to keep sales. 

I have found that a manufacturer must sell something cheap because they don’t have the marketing and/or sales talent to enable the sale of a US made product against a cheap foreign product. Also, a cheap sale would be necessary because they do not have design talent onboard to attract a customer to buy better designed and made US products. 

The main problem to compete in the US vs Foreign products has been the ability to come to grips with the idea that the US customer wants their product with their stamp of design and color, and they want it NOW! They are not willing to wait for your company to make a cutting, assembly, finish, and ship for six months.

So, here is an idea for you!

A modern case goods plant in fact contains three plants. One plant cuts and stores the parts for the entire product line. It is driven by best guestimates of future demand. If the parts are not cut from fixed sized wood panels on CNC Machines, the inventory must be cut on machines where set-up time and run time must be taken into consideration. This would mean that each machine must be scheduled for set-up and run time. Then the machine schedule would also be fed best guess styles to be cut along with the fact that you don’t want to schedule parts to be machined that would be an over supply and then scrapped later because lack of orders.

The best practice was to keep unique style parts together in a bin with a cut order card inserted in the stack that, when the card level is reached, a recut would be issued. By location of the cut order card in the bin, the total recut of all unique parts for a particular style would be back in the bin stock almost at the same time the last group of unique parts is pulled for assembly. 

Said another way, the cut order card would be placed in the inventory stack where the total unique parts for a style should be depleted when the recut order for the unique parts hits zero inventory. This number of total cut parts could be communicated to sales so they could promise a delivery. If sales see a n unusual high order, they should advise scheduling to move the card up in the bin parts stack.

This unique part inventory would also be supported with a common part inventory and a special hardware inventory for a style.

When an order comes in, it goes almost immediately to the second plant for production which is the assembly plant. The order , which includes the bill of material and parts list, is given to a order picker who gathers the parts for a particular assembly order, checks them for quality and total numbers, then issues the picked parts, hardware, and standard parts to a holding zone beside an assembly person.

If an assembly person must take any steps to get a pert or hardware, your system is in failure and needs to be reviewed or adjusted.

Of course, part of the engineering development is to video every assembly and make it available to the assembly person on a local individual tablet. This allows even a new assembly person to pick up the procedures rapidly.

Once assembled, the finished product goes to sanding, then into the third plant which is the finishing plant. 

Finishing can have certain day/time for a color or obtain a color and type of finish for a specific customer/end user.

The end product is checked against the specifications for the finished product, then released to package and shipping.

This method of scheduling can allow a specific product to be fully manufactured and shipped in this time frame:

1.      Pull Parts for product assembly. 1 hour

2.      Assemble product                       2 hour

3.      Sand                                            1 hour

4.      Finish                                          2 hours + drying time ?

5.      Pack                                            2 hours

Total ship time from receipt of order = 8 – 10 hours from receipt of order

.

This would mean we could put an order on a truck to a customer before a foreign manufacturer received the order. What do you think?