A key tenet of Lean Six Sigma (LSS) is that you never spend more to solve a problem than it is costing you. SigmaMed’s Value Based Services (VBS) is a project delivery model that guarantees project returns will always exceed costs. We are so confident in our work that we will eliminate your risk by guaranteeing results, reducing our normal consulting rates by 50%, and earning a small percentage of project returns above minimum goals.
Here’s How It Works
- We help you select an important first project that will return far more than it costs within 4 months
- You specify a minimum threshold of project results that delivers a 100% ROI
- We will continue on the project until we reach your improvement target
If we exceed your goal, you pay us a bonus that equals 10% of the extra returns, up to a capped amount
- This extra payment to us is capped at a small percentage of final project value
- This minimizes your risk and provides us with a bonus if we exceed your goals
Example
Your leadership team determines reducing rework on outpatient service orders will result in lower costs in billing to re-process and re-submit claims, reduced AR, and fewer write-offs due to untimely filing, etc. You decide on your goal for reducing rework on these orders and we send you a project proposal to reach these targets:
Minimum Goal — 5% rework, a 75% improvement, results in total savings of $120,000/year
- Project cost = $30,000
- Minimum Net Savings of $90,000 per year ($120,000 total savings – $30,000 project cost)
- Minimum Project ROI = 300% ($90,000 net savings/$30,000 project cost = 3.00)
Actual Project Results — Project team reduces rework to .5%, a 98% improvement, results in savings of $160,000/year
- Since we exceeded your goal, we earn 10% of the extra $40,000 savings beyond contract.
- Net Project cost = $30,000 + .10($40,000) = $34,000
- Net Savings = $126,000 ($160,000 total savings – $34,000 project cost)
- ROI = 370% ($126,000 net savings/$34,000 project cost = 3.70)
Bottom Line
As a future partner we understand the pressures you face and will put some of our skin in the game too. VBS enables you to try out Lean Six Sigma and our company without any risk of making a wrong move. A highly successful project is the best way to initiate a Lean transformation and we can teach you how to build on this base and build momentum. To learn more about our approach to Lean Six Sigma consulting you can download our Lean Sigma Healthcare mini-White Paper, “Lean that isn’t a Waste,” or email Jamie Martin.