11/16/2011

1

M22: Leading a Lean

Transformation

John S. Toussaint, M.D.

CEO ThedaCare Center for Healthcare Value

Kim BarnasSystem Vice President, ThedaCare

IHI

12/05/11

These presenters have nothing to disclose.

Objectives

� Discuss the core components of the Toyota

principles: “Purpose, Process, People” for whole-

system change

� List the behaviors required of staff, physicians,

managers, and executives to support whole system

continuous improvement

� Develop a whole-system change plan for your

organization by using A3 thinking, a specific Lean

tool used to create organizational change

11/16/2011

2

Lean works in Healthcare

� Group Health of Puget Sound reduced E.R. visits by 29% using their medical home redesign at the same time reducing hospital readmissions by 11%

� Akron children’s Hospital reduced cost by $8 M while reducing appointment access wait times by 74,600 days using lean

� ThedaCare’s redesigned inpatient Collaborative Care unit has achieved 0 medication reconciliation errors for 4 years running and the cost of inpatient care dropped by 25% www.createhealthcarevalue.com

� Henry Ford reduced infections rates, falls, and medication errors in 2010 resulting in a $4.4 M improvement

� Mercy North Iowa has achieved zero blood specimen tube labeling errors for over a year

� Seattle Children's avoided 200M in capital expense by freeing capacity with continuous process improvement

Source: Health Affairs 2009, Volume28, No: 5:1343-1350 , America Journal of Managed Care, September 2009

4

Financing Reform through Program Cuts, Higher

Taxes/FeesOver 10 years, despite $938 billion in additional spending, Health Reform actually reduces the deficit by cutting other programs and increasing revenues

Cuts to Medicare/Medicaid Revenue provisions

� Market basket adjustments (including productivity adjustments) for certain hospitals and other providers - $196 billion

� Industry fees (pharmaceutical industry fee, medical device fee, insurance industry fee) - $107 billion

� Restructuring of payments to Medicare Advantage (MA) plans - $136 billion

� Higher Medicare tax on high-income taxpayers - $210 billion

� Reducing Medicare and Medicaid Disproportionate Share Hospital (DSH) payments to hospitals - $36 billion

� “Cadillac tax” - $32 billion

� Other cuts (e.g., home health payment rates) - $87 billion

� Penalty payments by employers and uninsured individuals - $65 billion

Total = $455 billion � Other revenue (e.g., indoor tanning tax) -$111 billion

Total = $525 billion

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3

The Methodology of Lean is

about creating value for the

customer

Value =Q/C

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4

RESULTSCreate Value for the

Customer

True North

MetricsLeadership

Behaviors

Focus on the

Problems

CLEAR PURPOSEEnterprise Alignment

Align Strategy Align Systems Align Performance

SCIENTIFIC METHOD TO

SEEK PERFECTIONContinuous Improvement

Stabilize Process

Standard Process

Visual Management

Identify & Eliminate Waste

Front Line Data

Integrate Improvement with Work

RESPECT FOR PEOPLECultural Enablers

Involve Everyone

Develop People

Ensure a Safe Environment

Build Teamwork

Strategy Deployment

A management system that aligns – both vertically

and horizontally – a organization’s functions and

activities with it’s strategic objectives.

A specific plan is developed with precise goals,

actions, timelines, responsibilities and measures.

Strategy Deployment is a PDSA process.

Lean Lexicon, Lean Enterprise Institute

11/16/2011

5

Background

Why are you talking about it ?

Current Situation

Where do we stand ?

What’s the problem?Analysis

- What is the root cause(s) of the problem?

- What requirements, constraints and

alternatives need to be considered?

Goal Where we need to be?

What is the specific change you

want to accomplish now?

Plan

What activities will be required for

implementation and who will be responsible

for what and when?

Recommendations

What is your proposed countermeasure(s)?

Follow-up

How we will know if the actions have the

impact needed? What remaining issues can

be anticipated ?

A3 : What Are Talking About?

Deploying Level 1 Priorities

to Level 2ThedaCare’s

Strategic

Plan

Safety

(level 2)

People

(level 2)People

level 2 A3Safety

(level 2)Safety

(level 2)Safety

(level 2)Safety

(level 2)Safety

(level 2)Safety

level 2 A3

Shared Growth

(level 2)Shared Growth

(level 2)Shared Growth

(level 2)Shared Growth

(level 2)Shared Growth

(level 2)Shared Growth

level 2 A3

Productivity

(level 2)Productivity

level 2 A3

Safety A3

(level 1)

People A3

(level 1)

Shared

Growth A3

(level 1)

Productivity A3

(level 1)Plan Plan Plan Plan

ThedaCare’s Breakthrough Objectives

““““Measurably Better Value””””

Cross

Function

Team

Cross

Functional

Team

Cross

Function

Team

Cross

Function

Team

Cross

Function

Team

Cross

Function

Team

Cross

Function

Team

Cross

Function

Team

Cross

Functional

Team

Cross

Function

Team

Cross

Function

Team

Cross

Function

Team

Cross

Function

Team

Cross

Function

Team

Cross

Functional

Team

Cross

Function

Team

Cross

Functional

Team

Problem statement,

background and

targets deployed

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6

Title: System Safety A3 (Hospitals, TCP, Senior Svs. Support Areas)

2. Current Conditions1. Background

• Our paradigm tolerates risk & errors.

• Healthcare nationally harms 5 million pts/yr and kills nearly 100,000 pts/yr-minimal change since original IOM report (To Err is Human) released in 1999.

• Our employees are at risk in the workplace.

• Sub-optimal safety = avoidable cost ($$$) to ThedaCare and the national healthcare system.

• Our expectations r/t safety are unclear.

• We lack a true culture of safety limiting our awareness of the problem and effective

interventions…..”not my problem”.

• Safety resource needs unclear.

• ThedaCare leadership’s behaviors and actions do not always align with safety as a top priority.

3. Goals and Targets

4. Analysis (Initial thoughts) Safety A3 Gap Analysis•

Te

am

:

Page A© 2007

5. Proposed Countermeasures

7. Follow-up•

6. Plans:

Revision #4, Date: 03/30/09

Sponsor: Leader: Greg Long, MD, CMOFacilitator: Sensei:

Thanks! This environment

is not judgmental so I feel safe in

reporting!

Great job recognizing that safety

problem and telling

someone!

- OSHA Recordable Injuries

- HAT Scores

- Employee Engagement Index

- Operating Margin

- Productivity

Financial StewardshipPeople

Safety/Quality 50%- Preventable Mortality

- Medication Errors

- Access

- Turnaround Time

- Quality of Time

12/15/09 Draft. 6

Customer

Satisfaction

TRUE NORTH METRICS

11/16/2011

7

The 7-Week Cycle of an R.I. Event

� 3 weeks before – Value Stream review, Event

Selection, Select Team Leader/Co-Leader and team

members estimated financial, quality and staff impact

� 1-2 weeks before – RI Checklist, preparation .. Cell

Communication, aim statement, measures

� day 1 - current conditions

� day 2 – create the future

� day 3 - run the new process

� day 4 - standard work

� day 5 - presentation

� 1st week after - Capture the savings

� 2nd week after – Update Standard Work

� 3rd week after – CFO validation•Step 1 “Identify” waste

•Step 2 “Eliminate” waste

11/16/2011

8

11/16/2011

9

ThedaCare: Strategic Change Processes

KEY ATTRIBUTE TRADITIONAL MODEL COLLABORATIVE MODEL

Patient Experience Disjointed. May be confusing, even contradictory.

Single plan of care developed with patient - is visible, continuously updated with patient driven schedule and goals.

Clinical Quality Admirable, but not 100% reliable. Manage errors. Nursing maintaining thru heroics

Reliable, standard work, using evidence-based quality and real time problem solving to prevent errors.

Physician Role Hierarchical. Partner in care team. Exposes thinking to professionals team.

Nursing Role Task oriented. Too much time spent running for supplies and equipment.

Care manager. Expanded and empowered role in decision making and patient care progression. Bedside management of quality measures

Pharmacist Role Back end. Bedside presence. More involved in patient contact/education. Teacher to patient and team.

Environment Semi-private, dated. Private. Designed for patient/ staff safety, and to support collaborative processes.

PAST vs. CURRENT

Copyright © 2009 ThedaCare. All Rights Reserved.

Within 4

hours of

admission

1st 90

minutes

Full calendar day

1—may loop here

dependent on

condition and LOS.

Within 24

hours of

DC—Toll 4

Within 2

hours of

DC—last

Toll

Poka-Yoke

Criteria to

assure defects

do not pass

forward

Activities to

progress care

and reach

next Toll

Decision

makers in

Purple

TOLL GATES

Patent Pending. © 2006 ThedaCare, Inc. All rights reserved. For More information, contact ThedaCare, Inc.

11/16/2011

10

Collaborative Care Patient

Progression

Tollgate1

Tollgate3

Tollgate4

Tollgate5

Tollgate2

Are we progressing

care?

ProblemSolve

NO

PTCare

Are we progressing

care?

ProblemSolve

NO

PTCare

Are we progressing

care?

ProblemSolve

NO

PTCare

Are we progressing

care?

ProblemSolve

NO

PTCare

Are we progressing

care?

ProblemSolve

NO

PTCare

PTCare

Collaborative Care Value Stream Metrics

Wilson video

11/16/2011

11

Collaborative Care Outcomes through 2010

•Financial Indicators represent a subset of the patients to demonstrate impact of the delivery model. Excluded from both baseline and pilot are:observation patients, ICU patients, and LOS >15 days. Pilot numbers includes: Admits from ED to Unit, or direct admits to unit. 2006 is updatedbaseline.•Case mix was not significantly different between collaborative care and non-collaborative care•Updated from: "Writing the new playbook for health care: lessons from Wisconsin," 2009, Health Affairs, 28, p.1348•Copyright © 2011 ThedaCare. All Rights Reserved.

Measure Pre-

Collaborative

Care (2006)

End of

2007

End of

2008

2009 2010 Compares to non-

Collaborative Care

units thru 2009

Defect-Free Admission Medication Reconciliation

1.05 defects per chart

0.01 defects per chart

0 defects 0 defects 0 defects 1.25 defects per chart without RPh

Patient Satisfaction(number of patients rating care 5 out of 5)

68% 87% 90% 86% 95% Not captured for other units.

Measure Pre-

Collaborative

Care (2006)

End of

2007

End of

2008

2009 2010 Compares to non-

Collaborative Care

units thru 2009

Length of Stay*(In days)

3.51 2.92 3.09 3.05 2.91 3.5

30-day re-admission rate

No data No data 13.98% 13.7% 12.9% 15.2% (2009) 14.7% * (2010)

Average Cost Per Case* (using Medicare RCC) and restated in current dollars

$6512 $5024 $6326 $5789 $5781 $7775

Collaborative Care Outcomes through 2010

(Continued )

* This is all medical surgical unit re-admissions from a comparable non-collaborative care unit in the same hospital

11/16/2011

12

91

65

52

37 37

45

0

10

20

30

40

50

60

70

80

90

100

2005 2006 2007 2008 2009 2010

Min

ute

s

Year

AMC Code Stemi Door to Balloon 2005-2010(Goal 60 min)

CODE STEMI

212

154140

93 93 89

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010

Min

ute

s

Year

ThedaCare Remote Stemi-6 sites2005-2010

(Goal 90 min)

1st of 6 remote sites initiated

Remote STEMI

11/16/2011

13

82

60

0

10

20

30

40

50

60

70

80

90

2009 2010

Min

ute

s

Year

Field Stemi 2009-2010(EMS contact to reperfusion)

(Goal 90 min)

Field STEMI

Sustainment of improvement

through the Lean management

system

� Front line workers and supervisors able to

solve problems, and sustain improvements.

� PDSA Process

� No. of defects identified(front line staff

defect huddles)

� Number of Staff ideas implemented

11/16/2011

14

1411

5

11

3

2

1

12

0

5

10

15

20

25

30

Safety/Quality Customer

Satisfaction

People Financial

Stewardship

Nu

mb

er

of

Dri

ve

rs

True North Driver Category

2010 BPS Scorecard Driver Improvement

No

improvement

Improved

88%

improved 85 %

improved

83%

Improved

48%

improved

0%

10%

20%

30%

40%

50%

60%

70%

80%

AMC CVS

Inpatient

AMC 8th

Floor

AMC Inpt

Oncology

TC Birth

Center

TC Neuro

Surgical

Radiation

Oncology

BPS Alpha Units-Percent Employees

"Engaged“ 2009 vs 2010

2009

2010

11/16/2011

15

Can you say yes to these three

questions every day?

� Are my staff and doctors treated with dignity and respect by everyone in our organization?

� Do my staff and doctors have the training and encouragement to do work that gives their life meaning?

� Have I recognized my staff and doctors for what they do?

11/16/2011

16

The key to culture change is

changing leader behaviors

But, one characteristic came up that really stood

out. It was clearly shared by all the individuals who

were demonstrating ability to be successful and it

was not necessarily a characteristic that would

usually appear on a standard list of leadership

characteristics (all the others can be found in one

form or another on pretty much any leadership

list). That characteristic that stood out was:

demonstration of a deep desire to learn. The

individuals we picked out simply wanted to learn

more and more.

11/16/2011

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1. Drive for continuous (and daily) improvement

2. Mentorship; a corporate demand for and almost an obsession with developing people

3. Challenge; setting what might seem as unreasonable goals or targets both as a corporation and for individuals

White coat leadership vs.

Improvement leadership

� All knowing

� “In charge”

� Autocratic

� “Buck stops here”

� Impatient

� Blaming

� Controlling

� Humility

� Tenacity

� Facilitator

� Teacher

� Student

� Mentor

� Communicator

11/16/2011

18

Pa

rt A

& B

Med

ica

re E

xp

end

itu

re i

n D

oll

ars

* 2008 Medicare Data

* $57 Billion/yr in savings if all are at Outagamie spending levels

Books

On the Mend:

Revolutionizing Healthcare

The story of ThedaCare’s seven year

lean journey to improve the delivery

of healthcare

Coming soon –

Lifeline: A Collaborative Cure

for Healthcare

The journey to create transparency and

a payment system based on value

11/16/2011

19

The “Big Three” for better

healthcare value

� Pay for value not volume

� Provider performance on cost and quality is

transparent to the patient

� Redesigned care processes

Health Reform in “one piece

flow”

11/16/2011

20

Physician Value Metrics Emerging

Provider Detail – Diabetes Cost Index List

11/16/2011

21

41

$55,061

$27,254

$31,924

$36,594

$22,584

$17,914

y = -0.0004x + 3.8284R² = 0.0033

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,0001

44

87

13

017

321

625

930

234

538

843

147

451

756

060

364

668

973

277

581

886

190

494

799

010

33

10

76

11

19

11

62

12

05

12

48

12

91

KNEE REPLACEMENT EPISODESSINGLE KNEE, SINGLE ADMISSION, SEVERITY 1

WHIO DMV4 Analysis by WMS

Grand Total Average Total Std Cost Avg + 1 st dev

Avg + 2 st dev Avg - 1 st dev Avg - 2 st dev

Health risk, retrospective Linear (Health risk, retrospective)

PHPR Pilot Conditions

� Chosen at April 2010 payment reform

summit

• Attended by 170+ c-suite provider, insurer,

private employer and government leaders

• Voluntary workgroups formed

� Acute Care chose total knee replacement

� Chronic Care chose adult diabetes

11/16/2011

22

11/16/2011

23

References

� Health Affairs 28, No.5 (2009) : 1343-1350

� Health Affairs 30, No.3 (2011) : 422-425

� Joint Commission Journal on Quality and

Patient Safety 37, No.9 (2011) :387-399

� American Journal of Managed Care 17,

No.3 (2011) : 80-88

� www.createhealthcarevalue.com

11/16/2011

24

Network Purpose

� Accelerate the lean transformation journey

for each organization

� Multiple small learning communities

� Spread of current best practices

� Drive change in the larger healthcare

system

� www.healthcarevalueleaders.org

Healthcare Value Network

� Gunderson Lutheran

� Group Health Cooperative

� Hotel-Dieu Grace

� Iowa Health System

� Johns Hopkins Medical

� Lawrence & Memorial Hospital

� Lehigh Valley Hospital and Health

Network

� McLeod Health

� Mercy Medical Center – Cedar Rapids

� Park Nicollet Health Services

� St. Boniface Hospital

� ThedaCare

� University of Michigan Health System

� UCLA

� Alberta Health Services

� Akron Children’s Hospital

� Beth Israel Deaconess

� BJC Healthcare

� Christie Clinic

� Harvard Vanguard Medical

Associates

� Kaiser Permanente

� Provena Covenant Medical

Center

� Seattle Children’s Hospital

� St. Joseph Health System

(Orange, CA)

Network #1 Network #2

11/16/2011

25

� Bronson Healthcare Group

� Exeter Health Resource

� Henry Ford West Bloomfield

Hospital

� Inova Health System

� Integris Health

� Lucile Packard Children’s Hospital

� Martin Memorial Health System

� Mercy Medical Center – North Iowa

� Parkview Health

� St. Joseph Regional Health Center

� Sutter Gould Medical Foundation

� Winona Health

Network #3

Healthcare Value Network

� Blood Center of Wisconsin

� Cleveland Clinic

� New York Health & Hospital

Corporation

� Palo Alto Medical Foundation

� Regina Qu’ Appelle Health Region

� St. Francis Hospital & Medical Center

� Saskatoon Health Region

� St. Mary’s General Hospital

� Stanford Hospital & Clinics

Network #4

Network 5 commitments

� Scottsdale Health

� Alexean Bros health

� Oregon Health and Sciences University

� Martinspoint Health

� Mayo LaCrosse