Lean Healthcare Taking Off

Monday's Wall Street Journal had a good article titled What Factory Managers Can Teach Hospital Wards, which began by describing how John Toussaint at ThedaCare recently hired three more managers with manufacturing backgrounds, including Matt Furlan as COO.  ThedaCare is well-known to those of us affiliated with the Association for Manufacturing Excellence, as Mr. Toussaint was a keynoter and they made a presentation at AME's annual conference in Dallas last year.  In fact, if you want to learn more about their efforts they are hosting an AME workshop this coming September titled Lean as a Change Initiative in the Healthcare Environment.

Continuing with some excerpts from the WSJ article,

Health-care providers are seeking managers with years of factory experience to help raise the quality of hospitals as they grow larger and more difficult to run.  Much of the demand for factory veterans stems from hospitals' embrace of lean manufacturing techniques.  Pioneered by Toyota Motor Corp., lean manufacturing aims to cut waste and reduce defects by speeding up the production cycle, shrinking inventories and implementing just-in-time supply delivery.  On hospital wards, lean tactics are used to reduce patient waiting times or prepare operating rooms faster.  ThedaCare was among the first to adopt these techniques in 2002.

That's one of the more accurate descriptions of lean that I've seen in a mainstream periodical.  Of course there's the other central pillar of "respect for people," which obviously has particular impact in a healthcare setting, but still the WSJ's Carola Mamberto deserves some kudos.  So how much demand is there for lean experts in healthcare?

Ted Stiles, whose recruiting firm specializes in placing managers with backgrounds in lean manufacturing techniques, says demand among health-care providers is up tenfold this year from last year.

Not too shabby.  But of course there are the naysayers.

Skeptics say medical procedures cannot be standardized; they say patients, unlike car parts, may require differing treatment.

Tell that to ThedaCare's John Toussaint.  As the Lean Insider recounts from his AME conference keynote address, he is a big fan of standard work.

He commented that hospitals have an excellent quality record when it comes to blood transfusions and anesthesia, but quickly noted the reason: “These are the only two things in America done exactly the same at every hospital.”

He then noted efforts at a Thedacare hospital to improve care related to heart attacks. These efforts focused on making sure that certain simple procedures, which apply to almost all heart attack victims, are performed, and are done when they should be done. These include giving the patient an aspirin, giving the patient a beta blocker, making sure that insertion of an artery-opening catheter occurs within 90 minutes.

Reducing defect rates present a major opportunity, one that lean manufacturing has been especially successful with at factories.

Errors are a lot less common in good factories than hospitals.  A top-performing factory produces fewer than 10 defects per million.  Many studies suggest medical errors are far more common.

And once again ThedaCare has seen the results of its lean healthcare initiatives.

Toussaint said his hospital lowered its defect rate by one-third. That’s the good news. The bad news is that they still operate at a rate of 66,000 defects per million opportunities – not very good by lean or Six Sigma standards. Even worse, the hospital’s performance puts it in the 95th percentile for all hospitals. Imagine going for treatment to a hospital in the 10th percentile.

Imagine indeed. And what does Toussaint estimate that those erros cost?

“It’s possible to take $1 trillion out of the healthcare system in America,” Toussaint declared.

A focus on reducing internal waste, and cost, can create more savings that all the gut-wrenching changes favored by politicians and conventional wisdom.  Perhaps we need to get some of those folks to Wisconsin this September to see how ThedaCare does it.

Comments

[Jon Miller]

Taking the cost out and reducing errors is great. But will health care be able to fundamentally transform how they deliver high quality care to the highest number of people at the lowest cost, as Toyota did with their business? The focus so far seems to be on education and applying lean tools (neither of which are bad things) but in the long-term this is not sustainable unless the underlying thinking and paradigms are changed. Toyota did not start with the tools, they started with the thinking and ended up with the tools and an overall, cohesive system. Injecting expertise of factory managers is a great kick-start, but the healthcare professional community will need to digest and internalize these ideas on their own, as Toyota did with the ideas of Ford, Deming, Drucker, etc. in order to be truly Lean.

[Jim]

I fully agree. Hospitals and medical care in general needs to move towards this. There was an excellent article on this in the Harvard Business Review a couple of years ago. (Sept or Oct. issue I believe) It was very heartening to read.

Too often we look for some governmental "fix" to address the high cost of healthcare and miss the fundamentals. Too often the government gets involved in some mandated "fix" and it just ends up hurting a different group. (Usually the ones with the smallest lobby)

Lean manufacturing techniques does offer great improvements in the quality of care AND cost reduction. (certainly it costs less to NOT have to correct a defect in process than to fix it due to a crappy process.)

Medicine's problem is NOT incompetent or uncaring people. The medical professional is highly trained and competent. They just need some tools and guidance on how to improve their processes.

I worked with a Dr. who was originally running resturants. He applied good restuarant service skills to his practice and offered superior service to his patience. (and made more money through his effeciencies)

[Mark Graban]

I agree Jim -- it's usually not lack of caring or lack of technical/clinical knowledge. Just lack of training in operational and improvement aspects of work, including lean.