How Lean and Digital Capability can work together to create unthinkable solutions for today’s Business Environment
Where could the need for quality, flow, and efficiency be more critical than in healthcare? Mark Graban author of Lean Hospitals, Healthcare Kaizen, and The Executive Guide to Healthcare Kaizen shares his insights on Lean — both within a healthcare context where the stakes couldn’t be higher, and within a broader business context.
The 3rd edition of Lean Hospitals is published this month.
What first drove you to study and practice “Lean?”
Before I even learned about Lean, I was fortunate to be exposed to the work of W. Edwards Deming and his book Out of the Crisis (thanks to my father who took his famed seminar at General Motors). Deming was a major influence on Toyota and I’ve followed that path after being exposed to the Toyota Production System as an undergraduate industrial engineering student.
When I started my career at GM, my passion became creating a better, more engaging workplace for everybody using Lean management principles. I had the opportunity to move into healthcare back in 2005 and I’ve focused improving healthcare workplaces and working for better quality and lower cost for patients.
What is your greatest success story from all the projects you have worked on over the years?
I’ve been fortunate to help with projects that have improved flow, quality, and efficiency at the same time. These results came from the work and creativity of the healthcare professionals and leaders that I’ve taught and coached. When I teach them Lean principles, they’re able to figure out how to redesign and improve their processes.
One team I worked with reduced pressure ulcers by 70 to 80% relatively quickly using Lean principles (including making it easier for staff to do the right things for patients). Another very meaningful success was a team that reduced the waiting time for outpatient MRI scans at a children’s hospital from 12 to 14 weeks down to just three weeks and they’ve sustained that performance for over five years. The improvement didn’t come from working harder or cutting corners in anyway, it came from a number of systemic improvements to the departmental process and the overall value stream.
What are some of the most common challenges specific to healthcare?
One way that healthcare, in the USA at least, is that physicians are often not employees of the hospital and their compensation is often based on different factors than the hospital (this is sometimes true outside of the U.S. too). In “fee-for-service” payment models, health systems are often punished financially for keeping patients healthy and out of the hospital. While it’s true that better quality costs less, the financial benefit often goes to the payer (such as the government or an insurance company), rather than going to the healthcare organization that’s improving quality.
Another related challenge is that while Lean says “value is defined by the customer”, the healthcare customer is usually not directly paying, so they might just want more treatment instead of the best value for money. In terms of value, it’s very difficult for patients or payers to make good choices when data on healthcare quality or costs is hard to find.
Have you worked with healthcare organisations outside the USA? If so, do/how do the challenges compare across these different regions?
Outside of the U.S., I’ve done the most work with hospitals in Canada and one NHS hospital in England. At a high level, the challenges are the same and the approaches that work (or don’t work) are the same. Even with different payment systems across different countries, the operational challenges of healthcare delivery are very similar since hospitals and processes tend to be about the same.
I haven’t visited a country yet (having seeing ten or so, first hand) where people are perfectly happy with the cost, quality, or waiting times in their health systems. Many countries, even those with universal health insurance, have long waits for emergency treatment. In the U.S., this often happens because people don’t have insurance; in other countries, it happens because it’s hard to get a convenient appointment for primary care. Data suggest that the patient safety problem is just about equally bad in different developed countries – that needs to be solved. Even though other countries spend less than the U.S., nobody seems to be happy with spending levels or the rate of increase. These are all problems that Lean can address.
Which of the wastes is most prevalent and most damaging to the health sector, in your view?
In manufacturing, it’s often said that “overproduction” is the worst form of waste (when a company produces too much of a product too soon). In healthcare, I think the waste of “defects” is the worst form of waste because process problems and errors can harm or kill patients. The human cost of preventable medical errors around the world is difficult to measure, given the lack of transparency in healthcare.
There’s also a financial cost that’s especially significant in healthcare. Errors and harm not only destroy lives, but they can destroy trust that people have in our healthcare providers and facilities. Lean is often a “safety first” philosophy in manufacturing companies and we need more of that thinking in healthcare, instead of focusing just on cost and efficiency.
With Lean, the question of off-shoring certain services is sometimes a consideration. In what instances can this be effective – and on the flip side, be damaging – within the healthcare sector?
Offshoring is often a “quick fix” that reduces labor costs in one category, but hurts the performance of a company overall in manufacturing or services. It’s tempting, but doesn’t always help.
Compared to other industries, healthcare is somewhat shielded from the competitive threat of offshoring. Healthcare is often a very local enterprise, especially for emergency care. However, I think we will see more of a trend where people are willing to travel for non-emergent or elective treatments and surgeries.
In the U.S., there has been a lot of hype about traveling to India or other countries for lower-cost treatment. When data is made available, we actually see huge gaps in the prices charged by hospitals within the U.S. or even within the same state. I hope these pressures help inspire hospitals to improve instead of fighting to keep cost and quality data private.
In one of your video interviews you say something to the effect of “Flow is improved not with more speed but by reducing delays… busy is not the marker of success rather it is often more a sign of of siloed inefficiencies.” Can you expand on this?
One lesson that Lean teaches us is to look at the “end to end” flow for patients. We call this a “value stream” in the Lean approach. We can’t just ask every individual or department to improve; we need to improve the system. Reducing waiting times in one department doesn’t matter if a patient waits longer someplace else as a result.
People in healthcare are already working very hard. They’re usually expending too much effort, actually, because of broken and wasteful processes – they are already overburdened and stressed out. Real, sustainable improvement doesn’t come from working harder, it comes from reducing waste and freeing up time. Making work easier for staff leads to more efficient, better service, and better quality and safety. Staff are more likely to be excited about Lean when it engages them and equips them with methods to solve problems that matter to them and their patients.
Management can’t just ask employees to change; leaders need to change too. Culture change starts at the top, with senior leaders. That’s also an old lesson from Dr. Deming. Leaders need to model the right behaviors to help change the culture.
Engagement of staff is a key topic of concern for many organisations looking to implement a Lean strategy due to fear of streamlining and offshoring, largely. Can you give an example of an organisations or scenario where the implementation of Lean approaches have actually made a positive impact to staff engagement?
One particular organization is Franciscan St. Francis Health in Indianapolis. They have used the Kaizen style of continuous improvement to engage their employees in identifying problems and then proposing, testing, and evaluating improvements following the PDSA model. People solve problems that matter for them and their patients.
Franciscan St. Francis Health has implemented and documented more than 27,000 staff-driven ideas since 2007 and about 40% of employees formally participate each year (they wish this number was higher and work hard to get others to want to participate). That level of staff engagement has led to better results, including quality and patient satisfaction, in many areas. They’ve saved millions of dollars. Now, they are layering in a broader more complete approach to Lean on top of that Kaizen style of employee engagement.
I think engagement comes first and its essential before Lean can even take root. We can’t just train people and say “go and implement Lean.” We have to help them solve meaningful problems.
What would be your advice to a Change, Transformation or Continuous Improvement professional thinking of rolling out a Lean approach in the workplace? What are the biggest pitfalls to avoid?
Many of these pitfalls are right out of a book published in 1994 called “Why TQM Fails.” The parallels are eerie. Like TQM, Lean can work in healthcare, but that doesn’t mean it’s easy or that it’s guaranteed to work. One pitfall is only training frontline staff and managers; education needs to start with the executives. Leaders need to model the Lean philosophy, behaviors, and management style from the top. Another pitfall is focusing just on projects or tools instead of also working on the culture of the organization.
Lean can’t be just some add-on practice, it needs to become the way we do things around here. Another pitfall is reading a little bit about Lean and thinking that it’s easy and that you’ve learned it all. Organizations are going to be more successful with Lean when they have very experienced mentors and coaches helping them, whether they hire somebody from industry or bring in outside help. That said, relying too much on outsiders to “implement Lean” instead of developing capabilities so that everybody can “practice Lean” over time is also a common mistake. Lean is something that’s mostly learned by doing, but with the help of an experienced coach.
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