Wednesday, September 30, 2009

9 Points (continued)

J. Michael Rona
Principal, Rona Consulting Group
Mercer Island, Washington

This is the second in a series of posts about 9 Points that define the lean heatlh care enterprise:

1. A Compelling Vision
2. Enlightened and Fearless Leadership
3. Values Driven
4. Respect for the Customer and Customer Driven
5. Quality Driven
6. Obsessed with Safety
7. Respect for Staff
8. Continuous Improvement
9. Generate Higher Margins or Create Greater Capability

These nine points help characterize a lean health care organization. When implemented and fully engrained, the organization is transformed. Then it lives the principles of the Toyota Management System and produces perfect products, one at a time, in flow synchronized to the demand of the customer. This is what a lean health care organization looks like and how it behaves.

In the first post in this series, I covered Points 1 and 2. In this post, I cover Point 3 and discuss the value that drive the lean healthcare enterprise.

3. Values Driven

The lean health care enterprise is guided by its values. They are living foundational beliefs, which drive all behavior and become the yardsticks by which the day-to-day conduct of the organization is measured. The primary value is service to the customer. If service to the customer is flagging, then nothing else matters. It is this priority which is essential in understanding the failings of the current state and which drive priorities for improvement.

The second value is teamwork. Lean health care enterprises understand the different value which the broad range of workers in health care bring to the processes of health care but do not let this create a hierarchy of power. It is this hierarchy of power which inhibits freedom by all to work together in a fear free environment and which then diminishes the product for the customer. These organizations recognize the interdependency of all members of the organization and the importance of minimizing traditional power relationships.

The third value is continuous improvement. Lean health care enterprises are never satisfied with the current state. They believe that things can and must improve all the time. They believe in teaching and learning and becoming excellent at every position in the organization. They invest significant resources in training and giving time to their workers to improve processes. They insist on each worker participating in improvement and at least monthly improvement suggestions implemented by each worker for their own processes.

The final value of lean health care enterprises is integrity. These kinds of organizations conduct themselves with the highest level of integrity, which is modeled by the leadership. This principle starts with always doing things that are right from the customer’s perspective and is linked to a commitment to requiring the unvarnished truth about the current state to be publicly stated within the organization and with the organization’s customers. This truth telling is the key to enabling improvement. Without it, the real story is never surfaced, customers are harmed and the workers are burdened with truths that cannot be told. Organizations, which hold integrity as a foundational value, have no fear of public disclosure since they see such things as the truth about the current state and a driver of even more rapid improvement. Truly enlightened lean enterprises willingly “put their defects at the front door” for customers and workers to see to drive improvement and trust.

Monday, September 28, 2009

9 Points

J. Michael Rona
Principal, Rona Consulting Group
Mercer Island, Washington U.S.A.

The definition of a lean health care enterprise would be a health care system, which had in every manner patterned its management philosophy and system after the Toyota Management System. It would have the following characteristics upon close examination:

1. A Compelling Vision
2. Enlightened and Fearless Leadership
3. Values Driven
4. Respect for the Customer and Customer Driven
5. Quality Driven
6. Obsessed with Safety
7. Respect for Staff
8. Continuous Improvement
9. Generate Higher Margins or Create Greater Capability

These nine points help characterize a lean health care organization. When implemented and fully engrained, the organization is transformed. Then it lives the principles of the Toyota Management System and produces perfect products, one at a time, in flow synchronized to the demand of the customer. This is what a lean health care organization looks like and how it behaves.

Below I describe each of the 9 Points in detail:

1. A Compelling Vision

A clear and compelling vision is the critical starting point for any organization, but in particular for an organization that is pursuing a transformation. The question is transformation to what and why? The vision is a short and concise statement of what it is that the organization strives to be. By definition it declares a gap between the current state of the organization and its desired future state. The vision must be inspirational and a statement of aspiration. It must be a long view that would be welcomed by its customers and embraced by its people. It is a statement of quantum change and one that when achieved creates a major point of differentiation in the marketplace and pride for the organization’s workers.

2. Enlightened and Fearless Leadership

The lean healthcare enterprise is led by leaders who think very differently from the mainstream of health care leaders. They think first of the vision and have a clear sense of the future state. They understand that the key to transformation is a change in the management philosophy of the organization. They are unafraid of abandoning the current management paradigm and are comfortable with the uncertainty and ambiguity that exists in the transition from the current ways to the future way. They change themselves first and demonstrate the new way and are absolutely understanding but rigorously intolerant of individual managers defaulting to old ways. These leaders understand the changing of the mind of management that is occurring and help the transition by connecting the turmoil of change to the possibilities of the new way.

These leaders are passionate for the customers and constantly bring the voice and mind of the customer into the daily management of the organization. They are impatient with the traditional pace of management and relentlessly push for improvement. They are constant on the themes of change and what the new paradigm will bring. They have a deep knowledge and understanding of the new management process and philosophy. They have a constant view on the long term. They are unyielding in their belief in zero defects and the elimination of waste. They leave their offices and go to the “shop floor” to see with their own eyes the state of processes that are burdening their workers. And, they change things quickly.

I will describe Points 3 through 9 in posts to follow....

Wednesday, September 23, 2009

A Natural Match

By Deborah Dolezal
Senior Director, Kaizen Promotion Office
Park Nicollet Health Services
Minneapolis, Minnesota

As a healthcare worker and an implementer of lean, I am often struck by the similarity of the human body and the lean methodologies. They are both systems, each unique part doing a necessary function –

Circulatory, digestive, endocrine, immune, lymphatic, muscular, nervous, reproductive, respiratory, skeletal, urinary

Standard work, JIT, pull, one piece flow, mistake proofing, set up reduction, level loading, 5S.

Each function independently is unique in nature but cannot be successful without all parts working together. Each has a strong emphasis on flow and waste removal. When something is not operating properly, no one solution is right for everyone.

If chronic disease strikes, we instruct our patients to apply counter measures – usually involving a new form of standard work and are often surprised when these recommended changes are not immediately embraced, reminding us that change is hard and people need to be part of the solution, using their own creativity to fully define their best outcomes.

Current data from the Centers for Disease Control and Prevention:

• Percent of adults age 20 years and over with high serum cholesterol: 16% (2003-2006)
• Percent of noninstitutionalized adults 20 years and older with diabetes (diagnosed or undiagnosed): 10% (2003-2006)
• Number of noninstitutionalized adults with diagnosed heart disease: 25.1 million
• Percent of non-institutionalized adults ages 20 and over with hypertension: 32% (2003-2006)
• Percent of noninstitutionalized adults age 20 years and over who are overweight or obese: 67% (2005-2006)
The CDC also tells us that the medical care costs of people with chronic diseases account for more than 75% of the nation’s $2 trillion medical care costs. Experts who have recently testified to Congress say that 30 to 50% of these costs do not add value to patients.
Both the healthcare provider and the lean implementer have similar goals:

• Do no harm
• Add value

Healthcare and Lean - seems like a natural match.

Sunday, September 20, 2009

Making Sense of Alphabet Soup

Patti Crome, RN, MA, CNA, FACMPE
Principal, Rona Consulting Group

CQI/TQM, Six Sigma, TPS…how does one deal with the alphabet soup and decide which quality method being used in health care today is right for their organization? Some of us remember our introduction to what was known as Continuous Quality Improvement (CQI), others may be familiar with Total Quality Management (TQM). Together with our clinical colleagues we were relieved there was finally a shift from a cost only focus to quality, actually stemming from Deming’s PDCA (Plan-Do-Check-Act) cycle of improvement.

TQM has a very clear focus on quality consciousness. It emphasizes that every organization has a direct customer and needs to understand what the customer needs and how to achieve quality with zero defects. This philosophy is engrained in a quality initiative referred to as the Toyota Way. This method was developed in the 1960’s when automobile manufacturer, Toyota, set a goal to win the prestigious Deming Prize, which rewards companies’ major advances in quality improvement. Toyota won the prize twice. TQM is powerful and became one very central piece of the Toyota Way (Liker and Hoseus, 2008).

A little later Six Sigma came on the health care scene. Based on TQM, Six Sigma boasts bottom line results that can be measured in dollars and cents. At its best, this method teaches problem solving throughout the organization but at its worst, it reverts back to the cost-only philosophy of organizational improvement. Lean Six Sigma is a compilation of tools and training focused on isolated projects to drive down unit costs… it tends to be results oriented and top down (Liker and Hoseus, 2008).

Another quality initiative known as the Toyota Production System (TPS), commonly known as “Lean—the ‘Toyota Way,’” is based on two pillars: continuous improvement and respect for people. Respect for people includes not only having a relentless focus on what is important to the patient (eliminating wait time, waste or non-value added work and emphasizing the services they are willing to pay for), but also, respect for the employees, recognizing they have the understanding and knowledge of the work being performed. In this method, the front line employees work with the patients and know the opportunities for improvement and more importantly, they are given the authority to design necessary changes and implement them as standard work. This system becomes both a “bottom up” and “top down” improvement method. Toyota Way “Leaders,” as opposed to the “Black Belts” in Six Sigma, must establish the vision, support the improvements and hold people accountable for the standard work designed in the improvement processes.

Standard work and accountability are both key to creating a quality patient environment, yet many times in health care, one or both are lacking. As Taiichi Ohno, one of the founders of the Toyota Management System says, “Without standards there can be no improvement (Womack and Jones, 1996).”

Lean methods adopted from the Toyota Management System are very powerful in supporting the pursuit of perfection that is desperately needed to transform health care today. Using the scientific method and focusing on the customer—our patients—will result in significant gains in patient quality when the role of the employee is kept central to that improvement work. The transformation will not be easy, but our patients and our staff deserve no less.

Monday, September 14, 2009

Becoming a Lean Enterprise: New Insights from Along the Journey

I have worked with Lean in the hospital/health care environment for the past several years, and recently decided to take a step back and attempt to focus on the most critical factors which have determined success or failure in our various initiatives and strategies.

As part of my professional experience, I have both served as the COO of a major university teaching hospital, as well as the CEO of an organization that operated 139 hospitals across the U.S.

Because of this background, I have tended to focus on the more strategic aspects of Lean, and the role that it can play in the redesign of our delivery systems, and have reached several conclusions which may be of interest.

First, while many health care providers indicate that they have engaged in the use of Lean Thinking in one or several areas of operations, few have made the strategic commitment to become a Lean Enterprise.

While the first is relatively easy and painless, the second is substantially more complex, and requires a comprehensive assessment of the entire organization and it’s “current state”. That assessment includes its’ beliefs and values, it’s current management practices, and the structure of its’ key management jobs across the entire enterprise.

It also involves the important insight that the traditional hospital hierarchy was never designed to effectively manage productivity, cost or quality, and was certainly never designed to function as a Lean enterprise. Work and tasks in our hospitals tend to be organized around the health care professions (Nursing, Pharmacy, Clinical Laboratories, etc.) and do not lend themselves to effectively managing flow and value streams.
Even though, over the years, we have seen significant measurable improvements in the four critical areas around which our strategic plan is designed much is left to be done. (These four areas are Patient Safety, Customer Service, Clinical Quality, and Profitability.)

As a result of our Lean initiatives, we have seen substantial gains in these strategically important areas, including a 55% reduction in patient falls, a 41% reduction in urinary tract infections, a 7% reduction in labor costs on our inpatient units, and elimination of over 15,000 miles of nurse walking through flow redesign .

However, as we continue to assess our progress to date, it has become clear that to sustain these and many other gains, we must now focus our attention on policy deployment. . This step is critical in assuring that we have clear alignment from the “board to the bedside” in our strategic priorities.

Second, to that end, we are now redesigning the jobs of all key managers to assure that we have a new system of accountability which reflects our commitment to Lean. From top to bottom, we are formally realigning manager responsibilities around the “four pillars” of our Lean “house,” Patient Safety, Clinical Quality, Customer Service and Profitability

We are also creating new performance metrics and Key Performance Measures (“KPI’S”), which are closely linked with annual individual
performance evaluations and individual financial incentives.

Finally, we have realized that new skills are required of our managers, in order to successfully execute and sustain our gains. To that end, we have created a new entity called “Signature University” which provides certification training in critical areas of Lean and Leadership. All managers must become certified in eight critical skill areas to remain in their newly defined jobs, and financially progress within the organization.

All of these new insights are helping us more quickly transform our delivery systems, and move toward becoming a Lean enterprise.

David Spencer
Senior Vice President
Signature Hospital Corporation