The following are my reflections of the lean healthcare transformation summit in Orlando which wrapped up yesterday.
The audience was keen to learn lean healthcare. With 500 billion dollars in spending cuts now legislated by the federal government healthcare leaders are realizing that status quo isn’t possible.
Presentations by Group Health of Puget Sound, ThedaCare, University of Michigan, Hotel-Dieu Grace in Windsor Canada, Iowa Health System and Mercy Hospital in Cedar Rapids all made it quite clear lean works in healthcare to significantly reduce cost while improving quality.
The summit included the release of our book “On the Mend” (available on Amazon or at lean.org) which was met with enthusiasm as conference attendees explained that this book, written in story format with understandable English, would help them explain lean healthcare to staff and doctors unfamiliar with the principles and tools.
Most attendees said they would be back next year and they planned to bring their friends and colleagues. Comments included “this was a great conference because it allowed us to listen and talk to the real practitioners of lean healthcare”.
The development of the Healthcare Value Leaders Network ( www.hcvl.org ) was seen as a value added to many. Healthcare leaders can sign up to attend the next meeting of those interested in joining one of the Healthcare Value Leaders networks which will be September 13 and 14 in Boston. We will post the details on the Healthcare Value Leaders Network site as well as this site as soon as they are available.
Finally, it was clear from most everyone I talked to that the real health reform is going to be accomplished by the care deliverers not the government. With an unsustainable rate of cost growth and quality that is average at best, the burning platform is now upon us. Fortunately, we have reason to be optimistic that all of our organizations can be “On the Mend” now that we have discovered the improvement methodology called lean healthcare.
In his monthly e-letter Jim Womack relays his opinion about the state of healthcare and comments on our recently released book, “On the Mend” and the influence he thinks the book may have on the healthcare industry.
I’ve been interested in applying lean thinking to healthcare since I first focused a lean lens on the delivery process 15 years ago. How, I wondered, could lean manufacturers treat products in factories better than healthcare providers treated patients?
I was hopeful about initial attempts to apply lean principles, beginning with Peace Health in Seattle in the mid-1990s. But the early efforts faltered and for many years the challenge seemed to be too great. It took time and many false starts to translate ideas born in the factory to the situation at the bedside. And it took more time to develop lean management methods in a craft industry with no standard work, no publicly reported outcomes, and no ability to think horizontally about the flow of patients through the diagnostic and treatment processes.
Perhaps most important, governments and insurers were willing to pour unlimited amounts of money into healthcare providers with little demanded in return. Why tackle the hard challenge of lean transformation when mediocre providers could survive and even prosper?
Now the context has totally changed. The U.S. spends more than 16 percent of its gross national product on healthcare – twice the level of other advanced economies. Yet the new healthcare law just enacted guarantees – if the healthcare delivery process is not dramatically reformed as well — that spending will spiral rapidly upward as 24 million additional citizens enroll for subsidized health insurance and the baby boom marches resolutely toward a life stage where healthcare needs also spiral. Given the spending limits the U.S. government is facing and voter resistance to additional taxes, the only alternative in the absence of dramatic service delivery reform is price controls, rationing, and denial of the care just promised.
Fortunately Lean Thinkers, after 15 years of experiments, now have the tools to reform healthcare delivery. In the last few years lean healthcare proponents have not only demonstrated that costs can be dramatically reduced as outcomes and patient experience are dramatically improved — a feat traditionally thought to be impossible. They have also shown that steady progress can be sustained in complex healthcare organizations.
One of the best demonstrations of what we have learned is a new book – On the Mend by Dr. John Toussaint and Roger Gerard PhD – that LEI is publishing today. I believe this volume will have a profound effect by summarizing the principles of lean healthcare, documenting their benefits with a striking example, and providing an action plan for other healthcare organizations to follow to achieve similar results.
The principles John Toussaint and Roger Gerard have applied over the past decade at the ThedaCare medical system in Wisconsin (and clearly described in On the Mend) are simple and they work:
1. Focus on the patient (not the organization and its employees, the insurance industry, the drug companies, etc.) in order to determine the real value desired.
2. Identify the value stream (or patient pathway) providing this value to identify where value is actually created while removing massive amounts of waste (including the large numbers of errors causing rework that drives up costs.)
3. Reduce the time required to go from start to finish along every pathway (which always creates more value at less cost.)
4. Pursue principles 1, 2, and 3 endlessly through continuous improvement that engages everyone – doctors, nurses, technicians, managers, suppliers, and patients and their families — touching the patient pathways.
As I’ve noted for years, humans will try anything (and everything) easy that doesn’t work before they try anything hard that does work. And that’s where we are in healthcare. All the easy fixes have been tried and only the hard things are left. And the hardest part of the hard work ahead is that everyone has to change their behavior: the doctor accustomed to craft methods with no outcome measures; medical device makers accustomed to providing new equipment without regard to cost or clearly demonstrated benefits; nurses hoping that daily work-arounds in the delivery process will somehow make fundamental problems go away; administrators hoping that somehow costs can be reduced with higher capacity utilization – by simply running the same broken processes harder — whatever effect this may have on patient experience and errors (which dramatically increase costs.)
The final challenge is that everyone in healthcare must learn to think horizontally (as I discussed last month.) Managers, doctors, and nurses must learn to see patients flowing across complex organizations rather than reverting to their traditional vertical thinking where every department and activity is a castle with its moat, thwarting the patient’s quest for more value with less time at lower cost.
Despite the hurdles ahead I’m now hopeful that the availability of proved lean methods will push providers past the tipping point on the journey to lean healthcare, now that all the easy fixes have failed and there is no other option.
Best regards,
Jim
Jim Womack
Founder and CEO
Lean Enterprise Institute, Inc.
Here is an article published in Medical Home News regarding ThedaCare’s work in redesigning outpatient care.ThedaCare calls this The New Delivery Model but it represents a lot of the work that most people in the country are describing as the medical home.View article below.
ThedaCare has not dubbed it’s redesigned ambulatory care process a “medical home”. Interestingly, recent feedback from national focus groups of patients suggests that designation is considered by patients to be focused on organizations not focused on them. Since ThedaCare’s strategy has always been to deliver better patient value the actual customers(patients) have been heavily involved in the design process. In other words,most of the work on redesigning ambulatory care has been done with extensive feedback from the voice of the customer. Unfortunately, nationally the medical home work has been designed by people in conference rooms without any feedback from patients. In fact, whether it’s the recently passed healthcare legislation or publications from accrediting agencies there is almost no discussion about what patients really want.
In the following article we try to document what patients want rather than what Washington policy wonks think they want.In addition to the ambulatory care redesign work we also provide an update to the inpatient redesign work at ThedaCare , Collaborative Care. Both revolutionary process redesigns were created by using the the healthcare lean methodology.
In the following article in the New York Times the Dartmouth Atlas data and results are being questioned as valid. Give me a break! This is the most studied healthcare data base on earth and it has been available for 20 years so all researchers have been able to poke holes in it or make it better depending on their inclination.
It’s preposterous for someone to claim at this point that we can’t trust this information or that it is fatally flawed after 20 years of vetting it and improving it. The only valid point in this article is that the data base is unable to make true determinations of quality performance.I do agree that obtaining quality performance from administrative claims(The Dartmouth data is derived form Medicare patient claims) is difficult. However, this data was never purported to address quality performance. This point is important though.We need a quality outcomes public report to accompany the Dartmouth data.The only good one is the Wisconsin Collaborative for Healthcare Quality which is also mentioned in the article(they got something right).
Once we have a clinical data base available and then use the Dartmouth data we will then have a way to determine value for communities.In the meantime all we can say is that certain communities are three times less efficient than others.According to the Dartmouth data care in Miami is around $17000/yr for a Medicare enrollee,in Appleton it’s about $6100. When I practiced medicine most of my snow birds would not step foot in a Miami hospital due to the poor impression they had of Florida hospitals in general and Miami in particular. There may have been some basis for their belief but no one could ever prove it because we didn’t have an accurate quality data base to compare. We still don’t, so all we can say is Miami is three times more expensive than Appleton and all we can do is speculate. My final comment is every doctor I have ever talked to has told me his/her patient’s are sicker. It’s never turned out to be true in 30 years so I won’t buy that argument either.
Group Health recently published remarkable cost and quality improvements with their work on the medical home.
There has been a lot written recently about the “medical home”.This is the term popularized to describe the structure of the relationship between the primary care physician and the patient.The theory being that if the outpatient visit was re designed to incorporate better focus on patient’s educational, clinical, social, and behavioral needs that quality would improve and costs would go down.One of the major provisions in the recently passed health care legislation is medical home pilots to be administered by CMS.
I don’t like the term medical home as it implies the system should be focused on the doctor and staff vs. the patient condition.In focus groups the AARP has conducted this concern is voiced by patients as well.But be that as it may, we do need to redesign the care process to better meet outpatient care needs. There is evidence that many readmissions to the hospital could be avoided if better coordination existed of the patient condition. The challenge for providers is to redesign and re package existing resources so that hundreds of millions of dollars of unnecessary hospital care can be averted.
Group Health of Puget Sound has been on the lean journey for four years.They are also a member of the Healthcare Value Leaders Network. They have published an article in Health Affairs in May which shows a $10 dollar per member per month reduction in premium expense for patients accessing their redesigned primary care clinic which they call their medical home model. Using lean to redesign their primary care clinics they have created the future state value stream in a way that is adding better value to customers.This doesn’t surprise me as I have visited Group Health twice and spoken to the Family Doctor who has championed much of this work. His passion and commitment to redesign care is exciting.and to watch the staff in front of their visual tracking centers expertly describe the problems they face and the improvements they have made is inspiring. This is some of the first evidence that redesigning outpatient care can reap huge cost savings while improving quality.
Congratulations Group Health! Click below to read the article.
I think Steve has really nailed the core components of sustainability in lean. Lean transformation is really hard work and never ending. It is not for the faint at heart and it’s not just another healthcare project. Read what he has to say.
“Many organizations have looked to Toyota for a model to emulate, in pursuit of excellence. Why? Toyota went from being an uncompetitive auto maker in the 1950s, to world class in quality and efficiency by the 1980s, to the world standard in model diversity, new brand introduction, regional expansion, and technological leadership by 2000.
Credit for Toyota’s success was given to its management system-the Toyota Production System-more generally known as ‘lean manufacturing.’
Recently, a CEO trying to drive his own organization to exceptional levels of performance suggested that at some point, ‘lean’ becomes self perpetuating, largely because employees-accustomed to problem solving, kaizen, and the like, would insist on continued improvement it even in the absence of strong leadership.
Does that happen?
Before reading my take, what would your answer be? Does this become ‘habitual?’ Underpinning your answer, how are you defining:
Lean
Lean implementation
Leadership roles
Here is my response.
‘Lean’ _never_ becomes self sustaining. Never ever ever. No way, no how. It simply cannot.
Why?
There are infinite sources of friction and viscosity in an organization to suppress the core behaviors critical to achieving exceptional performance. (Before you read further, what did you define as ‘core behaviors’?)
The friction and viscosity can only be overcome by the motive force of constant, vigilant engaged leadership.
Let me expand on this.
Exceptional performance is possible. That is not a hypothetical. There is obvious evidence that some accomplish it though most do not.
Achieving exceptional performance requires generating and sustaining high velocity, non-stop, broad based, improvement and innovation. In short, you can only outperform the field if you can consistently out learn the field.
Why?
Because EVERYTHING we design- product, process-any complex system-will be grossly flawed on the first version. They HAVE to be. Our brains are insufficient to anticipate all the structural needs and all the dynamics behaviors without practical tests.
Therefore, we must have the skills to convert the ignorance that we incorporated originally into our designs into useful knowledge about how to design and operate the exceptionally complex products, services, and systems on which we depend and for which we are responsible.
Generating and sustaining high-velocity, non-stop, broad based improvement and innovation is skill based–not inspired genius, ‘culture,’ ’spirit,’ ’servant leadership,’ or any of that other fluffy kumbaya stuff which sounds good but which has no actionability.
Some examples from The High Velocity Edge.
The Navy’s Hyman Rickover (Chapter 5), servant leader? Please. He was an insistent teacher of engineering discipline. Alcoa’s Paul O’Neill (Chapter 4)? Again, an incredibly insistent modeler and reinforcer of the disciplines necessary for excellence. At Toyota (Chapter 9), the leaders there come across as challenging bosses, not mean or destructive, but tough in the same way your best coach or teacher was tough. Demanding, with high expectations. And constant feedback, encouragement, direction, and education. The type of person you never wanted to disappoint so you dug down deeper than you ever thought possible.
In short, achieving exceptional performance depends on skills, just like civil engineering, cooking, quality writing, or anything meritorious. There are deep skills required and the time and discipline that goes into developing, nourishing, and applying them relentlessly.
What are those skills?
The skills necessary for an organization to out learn its peers include those for:
1: Seeing problems–seeing ignorance:
Designing systems so they incorporate our current best known approach AND identify problems _immediately_ when and where they occur. Those problems are a signal that we don’t understand.
2: Solving problems:
Containing problems as soon as they are seen so they don’t propagate AND solving them rigorously (scientific method, A3, PDCA, Shewhart<–all essentially the same point about rigorous diagnosis, treatment, and follow up) so that the ignorance that caused problem is converted into useful knowledge.
3: Sharing learnings:
Incorporating new knowledge both locally and sharing it (and the discovery process behind it) systemically for broad effect. 1, 2, and 3 are precisely what high performing technical communities do well. This is the same skills applied to work systems rather than mechanical, electrical, or biological ones.
4: Engaging leadership:
Leading by (a) being responsible for incorporating component pieces of work into sub systems and systems and (b) relentlessly developing skills 1-4 in others.
As far as friction and viscosity that corrode and impede these skills, adults in general and leaders in particular are incredibly crappy at the skills above.
1: Calling at problems shows they are ignorant.
2: Solving problems rigorously takes A LOT of discipline and doesn’t provide immediate gratification of a ’solution.’
3: Sharing learning requires they expose their own work to relentless critique.
4: As for leadership, too much leadership education is about ‘decision making’–implying that the key is having the right information and the right models to interpret it rather than about discovery and development–finding new information and new ways to interpret it and teaching others to do the same.
In response to the question: Does ‘lean’ (or any other approach for achieving excellence) ever become self perpetuating, did we come to similar or different conclusions?
If we have come to different conclusions,
What do you mean by ‘lean’ and ‘lean implementation?’
What skills do leaders have to have, by your accounting, for lean to succeed-actual behaviors?
How are those behaviors and skills taught to leaders?
Best wishes,
Steve”
I invite you to answer Steve’s final three questions.
Today at the Institute of Medicine I listened to Douglas Elmendorf from the Congressional Budget Office(CBO) followed by Nancy-Ann Deparle the health reform director at the Whitehouse and came away thinking we really have a bigger problem than we think.To Mr Elmendorf’s credit, he admits there is so much uncertainty in most aspects of American medical care it becomes almost impossible to predict the financial outcomes of healthcare reform. Many factors come into play such as the sustainable growth rate(SGR) which is the physician payment schedule reduction.The present legislation assumes the SGR will go down not up over the next 10 years. The reality is congress has eliminated the reduction in physician payments every year since the formula was passed into law.This is only one of many factors that create uncertainty as to whether the health reform bill can deliver the financial results it has been predicted to deliver.
Mr. Elmendorf is right,predicting what new federal programs cost is not an accurate science.The most recent major healthcare program enacted was Medicare Part D which covers some drug benefits for Medicare beneficiaries.The CBO cost estimate for that program actually was 40% more expensive than the planned.It is reasonable to assume that CBO estimates for the new health legislation will also be significantly inaccurate as well.
The Massachusetts example is the only thing we can use at this point to try to predict the federal legislation financial outcome.Massachusetts now has well over 95% of residents covered by health insurance and the cost is close to 50% higher than before the bill was passed.This explosive growth in cost is leading to radical changes.Recently the Massachusetts payment commission approved moving to “global payments” for health services.These payments are as yet undefined but the dramatic rise in cost of care is necessitating dramatic solutions most of which are entirely untested.The more concerning rhetoric is that rationing of services may be next.
With this scary backdrop we continue to remain focused on the core principles of reform the center has espoused from the beginning. These principles are:transparency of cost and quality performance,payment reform,and delivery system redesign.
Transparency pushes us in the direction of understanding value. In other words we need quality and cost outcomes data on providers publicly reported so patients,employers, and the government can make good decisions. See www.wchq.org for a great example.
Payment reform is also required. In Wisconsin the Wisconsin Health Information organization is sponsoring a multi stakeholder initiative in which three subcommittees have formed to carefully evaluate how providers are paid to deliver acute,chronic, and preventative care services.These subcommittees are meeting monthly to struggle with difficult issues in changing our payment system.a recommendation for some potential pilots on reform is targeted for Jan. 2011.One thing is certain though,creating wholesale payment reform change without having first piloted such change won’t happen.the teams expect the recommendations to be piloted in various communities across the state before any statewide changes are recommended.
Finally, we all know radical delivery system design is also required.June 9th and 10th the Healthcare Value Leaders are hosting the Lean Healthcare Transformation summit in Orlando.Anyone serious about system wide transformation to continuous improvement should attend. Jim Womack will be there along with Mark Graban yours truly, as well as many great health systems all of whom have committed to lean transformation.30% reduction in the cost of inpatient care with 100% quality reliability is possible and this first annual summit will be focused on teaching people how to do it.
In summary, If we take the waste out of care delivery,report our results publicly,and pay for value not volume,we won’t need to worry if Mr. Elmendorf’s forecast is off by 40% or not.
On May 26th a number of national leaders in healthcare will come together to discuss how to create the right incentives for health care change. Two Network members are invited,Group Health of Puget Sound and the ThedaCare Center. In addition 2 other lean healthcare organizations will attend.
Lean healthcare is going to be well represented at the upcoming IOM meeting on Value Incentives next Wednesday May 26th.The agenda is enclosed but presentations from Group Health Cooperative of Puget Sound (A Healthcare Value Leaders Network member) and Virginia Mason will be an important part of the agenda.Denver Health is also invited. In addition the congressional budget office director Douglas Elmendorf and the White House director of health reform Nancy Ann DeParle will be in attendance. The invitee list includes a number of other high profile government officials and academics as well.
The remarkable thing about this meeting is the actual practitioners of care who have been invited are almost all using lean to transform their organizations.And in some cases have published compelling data on cost and quality outcomes which are directly tied to their lean activities. This is an exciting step in the right direction to improve quality and lower the cost of healthcare across the U.S. I’ll be reporting next week on what happened and next steps.
Walt Rugland the chairman of both the ThedaCare board and the ThedaCare Center board, testified recently in a House hearing on transparency of prices in healthcare
Transparency is one of the three fundamental reforms the Center has been espousing for many months.The other two are delivery system redesign to improve value to patients using lean and a payment system that rewards value.
Congressman Steve Kagen (DWi) introduced a bill in Congress recently on transparency of healthcare pricing. Chairman Walt Rugland testified at the congressional hearing on this bill that cost and quality transparency have been one of the cornerstones of ThedaCare’s remarkable quality improvement and cost reductions. Although this bill does not include transparency of quality performance the two go hand in hand in allowing patients to make good decisions about where to receive their care.
It doesn’t appear this bill will pass this year but the good news is the conversation has started.The following article suggests it might even get bipartisan support!
Carolyn Clancy visited the Kimberly clinic and Orthopedics Plus in addition to Radiation Oncology, and Collaborative Care at Appleton Medical Center. Read what she said and view videos.
The Agency for Health Research and Quality (AHRQ) has been one of the big winners from a federal budget perspective. The budget has almost doubled by several hundred million dollars and a lot of those dollars will be spent researching “comparative effectiveness”. So when the leader of AHRQ decided to visit ThedaCare the obvious question was why? Dr. Clancy made it clear she is very interested in understanding what high performing health organizations are doing and how others in the country could emulate them. Throughout her visit she continually asked how the ThedaCare Improvement System could be applied across many institutions nationally. She was very excited about the work in ambulatory care (she is an internist by training) and could easily see how the “new delivery model” which is ThedaCare’s Medical Home initiative, could positively change medical care across the country.
It is clear we need to publish results on ThedaCare’s lean redesign of patient care so that the principles and practices can be shared to influence industry change. Without committing any research funding, Dr. Clancy gave us the highest compliment when she said “I’ve got to bring my staff here to see this” implying even AHRQ can improve work processes. The last word we heard was “fantastic”. However, I’m sure we haven’t heard the last word yet, from Dr. Clancy or AHRQ and we look forward to more rigorous discussions. In fact the Center is principle investigator on a three million dollar grant that was recently submitted to AHRQ. Although the grant rules made it impossible for us to discuss this with Dr. Clancy, it is clear that studying the impact of the lean methodology in hospitals and clinics will be an important aspect of determining comparative effectiveness.
