Lean is the Medicine that Healthcare Systems Require

Last month, an important book titled The Lean Prescription: Powerful Medicine for Our Ailing Healthcare System, authored by Patricia Gabow and Philip Goodman, was published, and it details how Denver Health became the first healthcare organization to be awarded the Shingo Bronze Medallion Prize for Operational Excellence. 

I had the chance to speak with Patricia about her book, and one of the main questions I asked was: "Why should healthcare organizations choose Lean as a methodology to transform and improve their culture and results?" Here is her complete response: 

Let me go back one step from this question and first answer an even more basic question, “Why must healthcare organizations transform at all?” Pondering this question is what led me to Lean. There is a national-level answer and an organizational-level answer to this question. I contend that the USA doesn’t have the best healthcare system in the world. Fortunately, both the state and federal governments are taking a wide array of steps to begin to address the issues of coverage, cost, quality and care co-ordination. But the fruits of the policy changes will only occur if individual healthcare systems are transformed. 

My 40 years in healthcare, first as a practicing physician and then as an administrator, convinced me we needed transformation at an organization level. Standing in any clinic or any hospital unit tells you we are basically doing things like we did when I was an intern more than 40 years ago -- we have new drugs and new technologies, but most of our processes are the same. We need transformation in all our healthcare institutions and that will require clear (and new) methods to achieve it. We must identify, prescribe, and administer some powerful medicine to the system. 

I think Lean is that medicine. The power of Lean lies in the fact that it is both a philosophy and a tool set. The Lean philosophy teaches us that transformation is built on the two pillars of Respect for People and Continuous Improvement. These should always have been the pillars of healthcare. Even if healthcare had to wait for an automobile manufacturer to teach us this, we can embrace it. 

In my decades in healthcare, I, as others in healthcare have tried many approaches to reducing cost and increasing quality. Lean was the most powerful approach I had ever seen. There are few, if any other, approaches that hit the target on quality, cost and employee empowerment. 

For example, other approaches that reduce costs at best can hope to keep quality the same and keep employees neutral about both the process and outcomes of the cost reductions. Because Lean focuses on getting rid of waste that shouldn’t have been there at all, its focus can’t be argued about -- who wants to defend waste? Because Lean is built on respect for people, the Lean tools that let us see and eliminate waste can be used by every employee. You don’t need a PhD to use an elegantly simple tool like a spaghetti diagram. Every employee becomes an engaged problem solver. We gain an army of problem solvers -- it is no longer just up to executives to make our systems better. 

While these are the intellectual reasons why Lean is the methodology for healthcare organizational transformation, the real “proof is in the pudding.” At Denver Health we realized over $192 million of hard financial benefit, achieved outstanding quality such as having the lowest observed to expected mortality of all academic health system members of the University Healthsystem Consortium and having 83% of our employees say they understood how Lean helped us maintain our mission. Lean is the method that hits the bull’s eye on cost reduction, quality of care, and employee engagement. How could you not use such an approach? 

What do you think of Patricia's thoughts on the power of Lean to transform health systems? I'd particularity like to see comments from those in the healthcare sector who are currently part of a Lean initiative.

The Denver Health & Hospital Authority -- The Results Are In

Over on the Hospitals and Health Networks site, I read this great article about the Denver Health organization's incredible benefits resulting from its six-year Lean journey. Patricia A. Gabow, CEO of the Denver Health and Hospital Authority, believes the $135 million financial benefit since 2006 is a result of the adoption of Lean management techniques. In addition, in 2011, the hospital evidently saw "$46 million in financial benefits from Lean projects."

Other than the amazing benefits discussed in the article, I found this detail quite interesting: "There are 16 value streams and an organized method for picking improvement projects. Some are short term, others extend over multiple years, such as revenue cycle, the OR and community health. Each value stream has an executive sponsor and a steering committee that meets monthly. Gabow reviews metrics for all of the value streams and rapid-improvement events every month."

What do readers working in the healthcare industry think of this format for value stream maps? Are your maps used in the same fashion?

After winning the coveted Shingo Prize for Operational Excellence (the first healthcare organization to achieve this feat) , Denver Health now offers its own Lean Academy. Check out the video presented at the Shingo Award ceremony:

Is IT Overfed Yet Undernourished?

Steve Bell and Mike Orzen -- whose book, Lean IT: Enabling and Sustaining Your Lean Transformation, just won a 2011 Shingo Prize for Operational Excellence, Research and Professional Publication Award -- recently authored a short article for the online magazine IT Today.

Because 80% of most firms' IT (information technology) budgets are spent on "maintaining," while only 20% goes to "improving," Steve and Mike contend that this situation, like the disturbing trend in the eating habits of the US population, has created "overfed yet undernourished" IT operations and infrastructure. These costly efforts are not focused on creating value.

The authors feel that many organizations forget that "Lean is not free, it requires investment" and must remember to "create sufficient slack time in the schedule to allow workers to perform continuous improvement activities."

Are any readers of this blog involved in a Lean initiative focused on the IT function? Do you agree with Steve and Mike's assessment?

Comprehensive Lean and Green Resources on the EPA Site

The U.S. Environmental Protection Agency (EPA) offers on its website a wide array of resources -- from publications and reports to case studies -- for integrating and maximizing the environmental benefits of lean. Most notably, the agency features its Shingo Prize-winning Lean Manufacturing and the Environment report from October 2003. This report was crucial in establishing the relationship between lean and the environment because it was one of the first official documents that pointed out opportunities for further enhancing organizations’ environmental performance through their lean initiatives.

In addition, the case studies illustrate examples from many different industries, but one of the important facts about many of these initiatives is that the implementation of lean concepts and tools resulted in improvements in environmental performance even when lean activities were not initiated for environmental reasons.

Has your organization experienced environmental benefits through its lean initiative? Have any readers used these EPA resources? If so, please post your thoughts.

Your Lean Skills Are In Demand

I found this recent news release quite revealing. According to a study performed by the Avery Point Group based on more than 3,000 job postings, it appears the demand for candidates with Lean talent and experience is far outpacing the demand of those with specific Six Sigma backgrounds. In addition, the majority of those organizations seeking to fulfill job openings with Lean talent are no longer requiring candidates to possess some Six Sigma experience as well. Do you think this trend is the result of the particular economic environment (i.e., employers with limited resources are seeing more value in Lean than Six Sigma)?

Perhaps, because of Six Sigma's longer history of traditional training and certification programs, more employees already have some type of noted Six Sigma experience thus creating a larger supply than demand? Speaking of certifications, what are your thoughts about the recent development of Lean certification programs established by various universities, firms, and associations, such as the Association for Manufacturing Intelligence (AME), the Society of Manufacturing Engineers (SME), and the Shingo Prize organization?

Another important point stated by Tim Noble in this release is these findings may indicate a possible progression "toward a decoupling of Lean and Six Sigma." After years of Lean techniques finally achieving integration with Six Sigma initiatives, do you feel this trend is indeed occurring? If so, do you think this trend is beneficial in the long term?