The paradox of lean healthcare

Welcome to Lean Healthcare Grand Rounds, a blog devoted to the people and the organizations that are transforming healthcare through the application of the principles of the Toyota Management System.

Since the publication in 1999 of Institute of Medicine's report To Err is Human, the need not merely to reform but to transform healthcare in the United States is painfully clear. So, how much better does healthcare need to be? Mike Rona, former President of Seattle's Virginia Mason Medical Center, makes the case that the goal should be zero defects. See J. Michael Rona, "97.1 Percent Perfect," Journal of Healthcare Management 50:2 March/April 2005. Possible? Using the Toyota Production System, Virginia Mason reduced Ventilator Associated Pneumonia (VAP) by 92%. See J. Michael Rona, "The American Health Care System: A Wasteland of Opportunity," Future State, Summer 2007.

What about cost? The Institute for Healthcare Improvement's President, Donald Berwick, estimates that the waste in healthcare is at least 30% of healthcare production costs. If we could eliminate this, it would be worth $780 billion per year (.30 x $2.6 trillion = $780 billion), or--in the cost savings for one year alone--enough month to pay for a plan that the White House Office of Management and Budget estimates will call $1 trillion over the entire decade! Possible? Virginia Mason reports an average cost reduction of 50% as the result applying the Toyota Production System. See Rona, "The American Health Care System: A Wasteland of Opportunity."

As Steven Spear maintains, Toyota's methods offer us a way to transform healthcare from inside, today. See Spear, "Fixing Healthcare from the Inside, Today," Harvard Business Review (September 2005). In other words, the healthcare industry should transform itself. Alas, our present approach as an industry and as a nation is, of course, to transform healthcare from outside, eventually, if ever. Apparently we view healthcare reform as a Hobson's choice between providing access to our 40 million uninsured on the one hand and reducing cost on the other. And quality? It hasn't come up yet during the course of our public debate, has it? In the August 3rd edition of Newsweek, Samuelson says, "The [Obama] administration had to make choices: it could emphasize expanded insurance coverage ("access") or cost control, but not both." As a result, if the present legislation is passed, Samuelson expects healthcare costs to rise substantially. Read the complete Newsweek article: "Health 'Reform' That Isn't.' Also see Newsweek reporter Jeneen Interlandi's blog post, "Cleveland Clinic CEO Speaks on Healthcare Reform: 'We May End Up Making the Problem Substantially Worse." As Dr. Cosgrove says, "If it’s just access, we will be back in a few years dealing with cost, and it will be even worse."

Access, cost, or for that matter, quality do not necessarily present us with a Hobson's choice, because, costs will fall as we reduce healthcare's long lead times, and quality, well, quality is free. This is why most six sigma programs (originally characterized in terms of quality) have morphed into "lean" six sigma programs. For what appears to be the paradox of lean healthcare is actually a simple formula. If we stop to fix healthcare's problems, from the inside, today, it won't be long before we will find ourselves spending less time dealing with the consequences of poor quality. And as we waste less time mopping up after ourselves, the cost of healthcare will come down. Thus what appears to be a Hobson's choice is in reality a false dilemma. With Toyota's philosophy and methodology, we can have it all: all-inclusive access, zero defects, and affordable cost.

This blog will be organized into four major topics of conversation:

1. The long term philosophy of the healthcare profession--in other words, how should we interpret "Do no harm?" in a way that makes healthcare more affordable to those that need it;
2. The process of delivering healthcare services effectively, safely, efficiently;
3. The development of healthcare professionals, managers, and support staff; and
4. How to turn helathcare organizations into learning organizations.
   

This is a truly vital conversation. On this depends our national solvency as well as our personal well being. We look forward to your comments.

Best regards,

Tom Jackson, Moderator

Thomas L. Jackson, JD, MBA, PhD
Principal, Rona Consulting Group
Clinical Associate Professor, University of Washington School of Public Health
August 15, 2009