Not Exactly a Value Stream

I've been somewhat amused over the last few days as Democrats try to squelch the mailing of a rather interesting chart purporting to diagram the Democrat health care plan.  It was originally going to go out to only a bunch of folks in a few congressional districts, but thanks to the brouhaha and the internet reach of The Washington Post, it is now in the hands of several million and theoretically billion.

So here's the Democrat future state chart; click here for a larger version.

And to be fair, here's a chart New Republic came up with to diagram the current state mess; click here for a larger version.

And to be even more fair, there's really no chart to be found of a Republican plan, which is a problem in itself.  But the specifics of each plan, and the issue of congressional franking privileges, is not really the point of this post.  I know better.  Although I will say that a key provision of the Democrat initiative that requires employers to offer a health care plan or else pony up a 2-8% of wages penalty will blow the budget.  Most employers pay far more than 8% of wages, and would consider simply dumping their plans and the administration headaches, paying the "penalty," and perhaps giving their employees a raise to boot, thereby dumping the cost onto the unexpecting taxpayer.  I guess in an obtuse way that achieves the "portability" objective.

Those of us that use value stream maps as a tool to support lean transformation realize that these are not really value stream maps, but more interrelationship diagrams.  However value still flows... and perhaps more importantly gets throttled or even blocked... at each relationship interface.  The network of committees and centers and offices is rather stupendous.  All with differing objectives, accountability, philosophies, and concepts of "value." 

Sort of reminds us of the traditional manufacturing business structure.  An order would be received by a "Center for Order Entry" which would then contact the "Office of Planning" to get scheduling information, who would then route the order to the "Material Control Committee" who would contact the "Office of the Financial Controller" for permission to procure raw material... well, you get the picture.  If the organization began to implement lean, one important first step would be to change to a value stream based organization to streamline accountability. 

Take the damn order and make it... fast and without waste.  Period.  That's all the customer really wants to pay for.  And as our fellow blogger Mark would push, there is tremendous waste... and opportunity... at each stage of health care delivery.

Somehow I remember the Founders wanted government to be for the people, and not sticking it to the people.  If the people are the customer, how can value be more effectively delivered?  Who are the value stream managers, and what should their organizations look like?

Comments

[Dave Velzy]

So you want to critique the "After" without discussing the "Current State" model. The current state is broke and getting worse.

Lets discuss the barrier to entry for a business start up.

You quit your job to start up a business, you need insurance. Depending on age, family status and health you may pay between $12,000 and $25,000 to insure your family. IF YOU CAN GET INSURANCE.
That makes a 2% to 8% penalty seem like a bargain. Lets see average wages are what? $65,000 times even 10% would only be $6,500. THAT IS A BARGAIN. I’LL PAY IT! Show me where I can get insurance for my average employee at that rate and I’ll buy it.

A pre-existing condition like arthritis, or a slipped disk will stop a startup insurance plan cold.

Then there is the cost beyond what you can bear. Suppose you and your wife decide to have a child. Against all hopes, something goes wrong and your baby winds up in neonatal intensive care. Average cost of stay is over $1M. With a 20% co-pay and a $1,000,000 lifetime cap. YOU OWE $200K, YOU ARE BANKRUPT! And you can’t get insurance. Seem fair?

So talk about fixes or shut up.

[Kevin]

Dave- perhaps you misread or I wasn't clear, as I am agreeing with you.

"Most employers pay far more than 8% of wages, and would consider simply dumping their plans and the administration headaches, paying the "penalty," and perhaps giving their employees a raise to boot, thereby dumping the cost onto the unexpecting taxpayer."

Exactly what you said... 8% would be a bargain, many employers would then dump their own plans and join the "public" plan, thereby blowing the [government] budget (perhaps that lack of specificity on whose "budget" was the source of your misread?).

I do understand completely as I did start my own business several years ago eventually employing several people, and obtaining health insurance initially for my partners and then later for my employees was an unbelievable challenge... especially after a couple decades of living in large corporate plans.

I also included the New Republic representation of the current mess specifically to comment on the current mess!

But all of that is besides the point of this post... I was more interested in showing how convoluted the current and proposed future processes are, how flowcharts are misused, how process boundaries add cost.

[Bill Waddell]

Dave,

It seems as though you somehow expect the Obama health care proposal - the one in the convoluted chart Kevin posted - to reduce the cost of health care. That is where Obama et al and the American people are so disconnected. The goal of Obamacare is not cost reduction - it is universal coverage. It is all about providing health care to the 'some say 45 million but who knows the truth' Americans without health insurance.

Common sense dictates that providing health insurance to 45 million people who are not paying for it themselves and do not haave employers paying for it is going to cost some money. Somebody has to pay for all that insurance, and since the only source of money Mr. Obama has is us - the taxpayers - it is going to cost us. Hence the $trillion bruhaha, and the uproar over possible custs in Medicare, jacking taxes to north of 50% on the high income folks, slamming employers with surcharges, etc... It is all about figuring out how to pay for the insurance on the 45 million. Many reasonable people look at it and see no conceivable way other than to some how, some way some day tax middle America.

The Obama plan is not only failing to reduce the cost of health care - it is increasing it by putting those 45 million people into the convoluted value stream that only a bureaucrat could love that Kevin displayed. On top of that, it is encouraging (again as Kevin pointed out) employers with better plans to dump their employees into the Obama plan of twisty little non-value adding mazes.

If anyone in the US wants or expects the cost of health care to go down, they need to find a different Congress and a different President and open up a whole new discussion - the current Congress, current President and the currently proposed overhaul to health care is not about health care cost reduction at all. If you already have health care, or if you are providing it to your employees, there is absolutely nothing in this plan for you. Your only involvement in the discussion is how much more is it going to cost you to cover the people without health care.

Eliminating the waste from the current system - the second chart Kevin showed - along with tort reform, a discussion about what people should reasonably expect from health insurance, the role of the big pharms, etc... - is very much needed. I hope it gets on the agenda soon, but it is not on the Obama agenda now.

If you need confirmation of my take, you have only to look at the $200 million ad campaign the big pharmaceuticals are about to unleash in favor of Obamacare. They can't wait to fill the presecriptions for those 45 million folks with the trillion bucks Obama is out to raise.

[Robert Edward Cenek]

Interesting! Actually does not appear to be much more complicated than the current mess that we have??

[Bill Waddell]

Actually the two charts are apples and oranges.; and neither is a process flow chart or value stream map. The 'Future State" chart is a heirarchy of government agencies that will control the Obama health care system. The "Current State" is really all of the current entities - private and public - that have a role in health care and it attempts to show where and how they are interconnected.

Neither shows the path that the mainstream American does or will follow in the course of obtaining health care.

[Mark Graban]

Kevin, thanks for the link. I'll admit to not reading your whole post and the comments, as I'm totally worn out on partisan bickering that surrounded the news I was reading and writing about all day -- medical errors.

Regardless of what happens in DC, we have these realities:

1) We need to reduce cost and nobody's plan in DC can credibly claim that cost will go down. There is 30 to 50% operational waste in the system and only a few people are talking about how to eliminate that (Gary Kaplan at Virginia Mason and John Toussaint from ThedaCare, who I work with closely now). We need to find ways to spend less without just "squeezing the supplier" and paying MDs and hospitals less (sounds more like the GM/Chrysler/Ford approach than Toyota).

2) The healthcare industry is killing about 200,000 people a year from preventable medical errors and hospital acquired infection. This is the ultimate non-partisan issue, or should be.

Check out my blog and the latest reports at www.DeadByMistake.com

Again, nobody is talking about this reality. We are potentially giving the uninsured better access to a very unsafe system. We need to think about the morals of that too.

The death rates are similar in Canada and the UK, so don't think more government involvement will mean better quality.

Regardless of the payer system or the shenanigans and promises in DC, remember this:

1) Too much waste. Only way to truly cut costs = eliminate waste.

2) Need to stop "killing and maiming" so many patients as Paul Levy, CEO of Boston's Beth Israel Deaconess Medical Center.

Cindy Jimmerson and others are also trying to help push quality improvement, patient safety, and waste reduction into the public policy realm. We'll see if that helps.

Also, check out John Toussaint's site at www.createhealthcarevalue.org and the joint site with LEI at www.healthcarevalueleaders.org.

[Mark Graban]

Here is my most recent post for tomorrow morning:

http://www.leanblog.org/2009/08/dead-by-mistake-report-hits-news.html

Or

http://ow.ly/jvUY

[Mike]

Why do we need to reduce the cost of healthcare? I have pretty normal BC/BS converage and while it takes a chunk out of my pocket every payday which it didn't used to, it isn't an unreasonable amount. In return my wife and I--both in the "boomer" age bracket--receive quality care with low co-pays, very good service at our local doc, pharmacies, and "off hours" clinic, access to two excellent hospital "groups" in our local area, and have virtually no chance of being denied treatment for anything--at minimal cost. Not to mention that the quality of care we have experienced has been top-notch. Where's the problem with our system? Am I in some kind of unique minority? I think not. People are unhappy because what used to be 90/100 coverage for $0 now is 80/90 coverage for $200/month (for a family) with a deductible. Not what we would WANT, but does it REQUIRE a massive overhaul of the entire SYSTEM? If you want to start a taxpayer-funded insurance system for those who truly can not afford it I'm all for that, just tell me where to send my contribution. Figure out how many truly needy there are, first, though. As for the rest of healthcare--leave it alone!

[Brian]

I agree with Mark's assertion about eliminating medical errors and all of the inefficiencies in the system. Hospitals are perfect places to institute TWI methods as well.
However, please tell me what is wrong with a single payer system (i.e. Gov't as insurer similar to Medicare/aid)? Why should we defend insurance companies who profit by denying care (does anyone contributing to this blog have diabetes, high-blood pressure, cancer,etc?) and who have no financial incentive to become more efficient? The truth is that the for-profit model of running hospitals and other health care facilities does not work. Maybe we treat health care as a service akin to our police, fire and ambulance services. Maybe we run our health care system as we do a utility (water, electric)? I do not know what the final answer will be, but the status quo is not it.
Also, it is the democratic health care plan, not the democrat health care plan. You don't call Republicans "Repubs" do you?

[Kevin]

You mean the same Medicare that is rapidly going underwater?

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/12/AR2009051200252.html

And yes, one of my direct family members has a major medical condition that has required several weeks in several hospitals over the past year. I'm glad I was able to access care when I needed it, on my and my doctor's terms without a government bureaucrat telling us what works, without waiting.

I do agree we need to decouple health care from employment, just as my employer doesn't coordinate and pay for part of my car insurance.

Most importantly everyone needs to have skin in the game, which is why HSA's are powerful. If health care was effectively free, there would be no incentive to control cost at the consumer level.