transforming healthcare with lean

Business901 Podcast Transcription

Implementing Lean Marketing Systems

Transforming Healthcare thru Lean

Copyright Business901

Transforming Healthcare thru Lean Guest was John S. Toussaint, MD, is CEO emeritus of ThedaCare, and CEO of the ThedaCare Center for Healthcare Value

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John S. Toussaint, MD, is CEO emeritus of ThedaCare, and CEO of the ThedaCare Center for Healthcare Value. During his tenure at ThedaCare, he intro-duced the ThedaCare Improve-ment System, which is based on the Toyota Production System. Toussaint was the founding chairman of the board of directors of the Wisconsin Health Information Organization and has served as the chairman of the Wisconsin Collaborative for Healthcare

Quality. He also has served on Governor Doyle‟s E- Health board. ThedaCare and Toussaint‟s work have been featured in Health Affairs, The Wall Street Journal, Modern Healthcare, and Harvard Busi-ness School case studies.

Dr. Toussaint‟s new book, On the Mend: Revolutionizing Healthcare to Save Lives and Transform the Industry, co-authored with Roger A. Gerard, PhD. describes the triumphs and stumbles of a seven-year journey to lean healthcare, an effort that continues today.

About Healthcare Value Leaders: The partnership between the Lean Enterprise Institute (LEI) and the ThedaCare Center for Healthcare Value (TCHV) brings together two of the world‟s leaders in “lean thinking,” with a combined 20 years of experience in lean implementation and education. Working in partnership allows LEI and the TCHV to leverage

their unique perspectives and not-for-profit missions to accomplish a shared goal of fundamentally improving healthcare delivery through lean thinking.

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http://www.createhealthcarevalue.com/





Joe Dager: Thanks everyone for joining us. This is Joe Dager, host of the Business 901 podcast. Joining us today is John Toussaint. John is the CEO of the ThedaCare Center for Healthcare Value. During his tenure at ThedaCare, he introduced the ThedaCare improvement system, which is based on Lean methodologies.

John, could you just introduce yourself and tell me what the ThedaCare Center for Healthcare Value does?

John Toussaint: Thanks for having me, my pleasure to be here. I am the former chief executive officer of an integrated healthcare delivery system that had several hospitals and a number of physician clinics, behavioral health, homecare, and other activities. Now I am the CEO of the ThedaCare Center for Healthcare Value, which is a not for profit 501C3 organization that's focused on trying to reform the delivery of healthcare in the US to reduce the waste, and take the cost out, and improve quality. We're doing that by espousing and teaching, facilitating the implementation of healthcare Leans, really around the world; but we're focused mainly in North America - in the US and Canada.

Joe: You've just authored a book along with Roger Gerard. It's called "On the Mend". What prompted you to write a book about all this?

John: Over the years I've gotten a lot of questions about, "So, what do you mean about Lean?" In particular, "What do you mean by Lean in healthcare?" Maybe we understand what it means in manufacturing, sort of kind of, but we don't think it's applicable to healthcare. Here at ThedaCare in Wisconsin, we've been at it for many years, and it's been





incredibly powerful to change the culture of the organization and drive dramatic improvement in cost and quality results.

What we decided to do was to work with Jim Womack at the Lean Enterprise Institute and write the book for Lean in healthcare. This book is really the framework for healthcare

Lean. If you read it - it's a fairly short read - when you're done you have a pretty good understanding of how Lean is applied to healthcare and the framework by which you can do that.

Joe: I enjoyed the book, especially from the standpoint that I read a lot of - what I would say fiction books - about Lean, because everybody wants to talk about the cultural thing and it's easier to put it in a fiction book. But you wrote a non-fiction book with that same background. It was like reading a story. It was a nice, easy read, and you identified it very well. In the book, you did not make it seem like it was problem free; that someone came in and did this and it all worked out, because it didn't all work out.

John: Anybody that's actually implemented, or is implementing Lean principles knows that it doesn't all work out. If we would've told you that it all worked out, we would've been lying and you would've known. What we've done is actually told the story from patients' perspectives, sort of the before and after. Here's how we performed at one point along the way, and we realized that we were making a lot of mistakes, a lot of service

issues, a lot of clinical quality problems. Then we began to implement a methodology called Lean. We actually changed it to the ThedaCare Improvement System and took a lot of the Japanese terms and things out of it, so that our clinicians wouldn't be confused by that. Then we started applying these principles.





What we were doing was taking processes which were fundamentally broken, and we'd give very sharp stories about how those fundamentally broken processes were negatively impacting our patients. We started to change those processes, redesign them, and started to improve the performance for our customers - our patients.

Is it perfect? Is it all done? Absolutely not. This is a never-ending story. We wrote it in a way that hopefully... It's almost kind of a mystery.

"Well, gee? Then they did what? Then they did what? What's really going to happen here? Is the whole thing going to blow apart, or is there actually good things that happen at the end?"

We try to keep you on the edge of your seat a little bit and tell you a lot of the... Actually sort of expose a lot of the dirty laundry along the way...

Joe: I did notice that. One of the questions I ask is why Lean? Why didn't you grab hold of Six Sigma? Why didn't you grab a hold of another methodology? Why was it Lean?

John: Well, we actually looked at a number of different methodologies over the years. We dabbled in Six Sigma, we dabbled in 90 Day Workouts, we dabbled in TQM; we dabbled in just about every single possible idea that you can think of. Finally, when we actually started to see improvement in action it was at manufacturing plants and specifically at

Aaron's; where we spent a lot of time in our early days, where they make snow blowers, and they've been on the journey for about five years. Once we started to see it in action, it was understandable - everyone could understand it, our frontline staff all the way to the





CEO - we realized that the fundamental problem in healthcare is that we do not have stable processes. In fact, most of our processes are out of control. The fundamental formula that Lean brings to the table is that it allows you to begin to stabilize your process. Then you can standardize it, and then you can improve it.

Great to have statistical process control charts, but frankly every time we delved deeply into our performance there was 300 percent variation. So studying variation wasn't going to help us, we really needed to study process and standardize it. And that's one of the main reasons we gravitated towards the Lean methodology.

Joe: So you felt that if you just looked at removing variation that you really had to go in there and provide standard work first, put a baseline in there for it.

John: Yes, we had very little standard work for anything. You had 19 doctors doing their things 19 different ways. There wasn't any way to actually figure out - when there was a defect - which process was causing it, because the processes were in chaos. That's what we were doing, is trying to get to a standard work process and then standard work for each of these areas.

Joe: How did the doctors take hold of that? I look at a doctor... He's used to being - and maybe this is the wrong word - but in command, in charge, and in charge of his patient. Then to sit there and say "this is the way we're going to do things", that seems like real contrarian thinking there.





John: I would agree the word is in charge. I would say that that's probably part of the trouble. This autocratic nature of medicine does not allow for any sharing of good ideas and of improvement ideas. So you end up with, like I said: you've got 19 different doctors, you've got 19 different processes, none of which are able to be studied to determine which is delivering the best result. There are defects all over the place and there's no hope to actually study the defects. What we did was we created model cells in the inpatient units and model cells in the outpatient units, and we began to develop a standard work around this redesigned care. Then we began to measure it. Once we proved that model cells were delivering better performance than the original work, the doctors started to respond. Actually, doctors respond very effectively to data.

We had to create the model cells for improvement - to prove that we could deliver zero medication reconciliation errors and 30 percent reduced cost on our collaborative care

unit - before the doctors would say, "well we need to change."

Once we showed the data it became a lot easier. The docs would say, "The results of this process for our patients are better than the process that I'm using right now, so that means I'm going to have to change." And for the most part they did.

Joe: When we sit there and talk about changes, and still in a Lean culture, the secret always is to find the change agents - how did you find them? I am always intrigued by

that, because people forget about that step. Because until you find them, and other people will not come onboard, but there's got to be two or three people that are willing to “beat to a different drum.”





John: Well, that's true. For each model cell that we've developed over the years, there have been volunteers. In the Collaborative Care Unit, one of the nursing managers volunteered and said, "I'm sick of this. I can't stand all of the mistakes we're making. This is not working. We're not going to incrementally improve it. We need to blow it up, start over." Three value stream go-around's, and 29 Kaizen events later, guess what? We have a new, completely redesigned inpatient care process; which now is being spread to all of the hospitals.

But it does take those people that are willing to... In some cases, they're frustrated, they've had enough and they want to really change it. They are the ones that step-up first and start to really fight the fight. In the early days, it was fighting a fight, because common human nature is you don't want to change.

What we're doing is pushing the envelope and saying, "We're going to have radical change." You do need leaders, champions, that are capable of standing up to a lot of pressure, but also listening, and willing to change their minds about what this new process should look like.

Joe: I think in the On the Mend book, you go into the change agents a little bit, but then you talk about sustaining. And it takes a different type of individual, I think, to sustain it, does it not?

John: Part of the journey where ThedaCare is today, is basically: there just has to be a lot more standard work created, and then implemented, and then audited, and then PDSA. There are still a lot of areas where the standard work is not in play. The type of leader that





we need at this point is somebody that's just completely a dog on the bone when it comes to, "The redesign process, stabilize the process. Now, we are going to improve the process. Now, we're going to teach the standard work. We're going to improve the standard work. A lot of PDSA (continuous daily improvement) around the work that has been created and is being created."

I think that is kind of the point at which ThedaCare is at now, is really building the culture of PDSA, and using standard work that comes out of PDSA, and then auditing it, and then doing a PDSA all over again.

Joe: People are kind of afraid of the term „standard work' sometimes, and I think especially, maybe in the healthcare area, that they are a little bit afraid of that too. Can you explain what 'standard work' really means in healthcare?

John: Typically you'll hear of a doctor say, "Well, that's just cookbook medicine, and that's no good." The reality about cookbook medicine is that there's been a lot of work done around using protocols for certain things. We know that about 80 percent of the time, standard protocol works for delivering reliable patient outcomes. The other 20 percent of the time it doesn't, and that's when judgment and experience, and other things come into play.

We're not asking our clinicians to just give up their judgment and experience. It's sort of like the 747 takes off, and all of a sudden three out of the four engines blowout or quit working; that's where experience and creativity come in. Landing an airplane on the Hudson River is an interesting example, standard work was probably not created for that.





That's why we want that pilot to follow the standard work every single time, and when the birds blow out all the engines, guess what? It's time to innovate, create on the spot.

The other thing about standard work, I think, that's interesting is that because we don't have standard work in healthcare, what that does is leaves tremendous amount of

firefighting and non-value added activity that goes on all day long, and sort of this heroism of, "We saved a patient."

But if we actually had a process that was standardized in the first place, we wouldn't have to be out there firefighting and saving the patients all day, because actually they would fall into a standard process. They would do fine, which would free up the clinicians to actually spend time on trying to think about how to improve it.

Joe: I always think standard work allows us to handle the exceptions better, it takes the uncertainty out of what we should be doing.

John: I agree with that. I completely agree with that.

Joe: When there isn't something that you have to react to, you've got a basis to work from. Landing on the Hudson is a perfect example. It wouldn't have happened if there wasn't a standard procedure on how we do things because you would be struggling, "Are we going to do it this way?"

Joe: A lot of little things go unsaid in a time of crisis. The other thing that I noticed in the book is that there really was an effort to tell the stories, and like you had mentioned before, a little bit of the drama that you wrote into it; which I just have to compliment you





on. People call it PDCA and PDSA is also used. Why did you use PDSA instead of PDCA? It sounds like a trivial thing, but that struck me in there, that you chose that acronym.

John: If you go back to Deming's writing, you'll find that he uses PDSA, and "S" means study. We like to think about the work of improvement as studying the do part. Yeah,

we're great at planning and doing, but we're not--and at least in healthcare, we're not really good at studying and acting. I like to think about it from the standpoint of, "Let's study what it is, the experiment that we put in place." That means to me kind of a different sort of mindset. We're actually involved in trying to deeply understand, deeply study, these experiments that we constantly are applying to our patients.

It's I guess which word you really like, and at ThedaCare we liked the word 'study, ' because frankly, we are not very good at that. We wanted to give people a word that would make them think differently about what they were doing, because we do a lot of doing, but we don't do a lot of really understanding what we are doing. Study, to me, is a deeper meaning word around understanding what you're actually doing.

Joe: You've restructured your organization. You talked about doing that into product families and separate value streams. Did you end up with just a lot of different value streams? Isn't each case different that you practically need a different value stream, or did you find enough commonality that there were only a few value streams?

John: I would say that we're very early on in this experiment. After seven and one half, eight years, the organization is finally to the point where they can start to understand how to design around value streams. We tried an experiment about four years ago in our





Musculoskeletal value stream, which is if you have a knee problem, or something like that, and we struggled with that. It was very hard to bring all of the components of the Musculoskeletal value stream together. Plus, we had a lot of reimbursement issues, where Medicare was penalizing us for bringing physical therapists from the hospital to the Musculoskeletal value stream outpatient center, all kinds of stuff like that.

But I think that the more you really start to understand the value stream from the perspective of the customer--what we're looking at is that horizontal value stream around the customer experience for the specific health condition, it becomes clearer that we are simply not organized, structured in a way, to be able to deliver waste-free care to customers with their conditions.

I think what it is it's a deeper understanding of what the product is we're actually delivering to the customer. If you're a person who has diabetes you don't really care how the hospital interacts with the clinic, interacts with the dietitian, blah, blah, blah...

What you care about is am I getting all the appropriate things that I need to do to control this disease so I stay out of the hospital. What that means is we have to rethink the whole delivery process rather than just think about it in hospitals, in clinics, and homecare, and dietitians. It's what the patient need as they flow through that horizontal value stream of their condition. That is really starting to make us think about a lot of restructuring the

resources to better serve that customer value stream.

Joe: So you're going through the typical steps of value stream mapping for these different product families?





John: Each one of these has a value stream map and that's based on the end to end customer experience. Then applying the various processes, the various clinical processes, whether it's imaging, or surgery, or inpatient care -- more as a vertical value stream to this horizontal approach and it's complicated. We've got 50 years‟ worth of workarounds in healthcare to try to break down in order to organize into product families.

Joe: I am a Lean person and I talk the talk and walk the walk, but if I have one complaint about it is that Lean people have a tendency to move the control point to within the organization and internalize the process. I think, when I read the book, what I got out of the book is that patient care remained on the forefront for you. You did not internalize the process and was that done purposely from seeing others or was that by accident? How did that happen?

John: I think there's a lot of 'better to be lucky than good in our work.' It's an experiential learning process. But, I think one of the things we have been able to do is keep the patient at the forefront and value, as considered by the patient, at the forefront of the work. The book really describes how we really fell down on a number of areas of really keeping the patient as the place where value should be determined. I think that, that's what has really changed our thinking as we've really looked at these processes from a standpoint of patient flow and end to end care for the patient. It has really made us think through what it is that we actually do, in a different way, and certainly more focused on the patient

condition and the flow of the patient through the system.

I've been to 64 Gemba sites now, all over the world, in the last two years. I'm telling you that this is the biggest struggle all organizations have, is to try to figure out how to create





that value for the patient; rather than just work on that little piece in the OR, or just look at the intake at the emergency room. We really have to map this out end to end for the patient and people are struggling with that.

Joe: I think it's a great focusing mechanism.

John: Absolutely, I think that's right. Because it certainly... What we like to do is have the patients involved in this activity. The patient's involved in these value stream analysis, and our Kaizens, and everything else. Because it's remarkable how we can just get the blinders on as the provider side of the business and think that certain things that we believe are valuable to patients, patients have believed just the opposite. So if we don't get customers involved in some of these design processes, we don't end up with as good a result.

Joe: It seems like a pretty big task because aren't you dictated by how Medicare or Medicaid applies certain principles? You have to adhere to their principles so that people are covered.

John: There are definitely a lot of barriers in the realm of payment. The inpatient redesign care that I described earlier, the collaborative care unit, which is very well described in the book -- we deliver higher quality, lower cost, lower expense care in those units but Medicare pays us two thousand dollars less per case. On an otherwise, maybe five or six thousand dollar payment, they pay us two thousand dollars less. So here we are, delivering better quality at lower cost, and we get paid less. We have a lot of examples like that.





That's one of the reason I'm running this center is that I'm in Washington a lot, trying to outline these problems that really need to be fixed, so that all healthcare organizations in America will be willing to go down this path.

If you go to the healthcare CEO and you say "Hey, you're going to redesign your inpatient

care and you're going to get paid about 25 percent less per case to do that." How many people are going to sign up for that? But yet that's what we need to do in the US.

We've got to figure out how do we actually fix this payment problem, and it's not that people don't recognize it in our government, they do. They're just not sure what to do about it.

What we're doing is trying to make it clear what it is that we need to actually do about it, so that we can stimulate this innovation and move people along in their Lean journey in healthcare.

Joe: What has been the reception to Lean in healthcare in Washington?

John: Part of the problem, of course, is that nobody understands it. That was another reason we wrote the book. If you can't read this book - there's no excuse, it's a 150 page book - you can get on an airplane and read it and you can get the basic principles. We wrote it with the idea that we can hand it to one of our bureaucrats or one of our

legislators and on the way back to his district, he can read it on the airplane and get it. I think that, that actually is starting to play out.





I've had at least three different legislators that have read it, that have said, "I get it. I understand what you're doing. I support it. How do we take it forward?"

That really was one of the key reasons that we wrote this thing, so that we could start to get the wheels grinding a little bit on some of these guys that are making the decisions

that have so much impact on US healthcare.

Joe: Do you believe that this is the best approach on a national level?

John: At the end of the book, I describe three things that I think need to happen in policy. One is we need to change the payment to reward better value, because Lean provides better value. We've got to change things so that there's incentive to do it. The second thing is that we really need to be transparent about our performance, because healthcare is in a black box when it comes to performance. Not all doctors and hospitals are treated equal, and not all doctors and hospitals deliver the same results.

So we need to make sure that we have a core group of performance measures that we can compare. My example is, if there are two hospitals in your community and you knew that one of them delivered 100 medication errors yesterday and the other hospital delivered zero, which one would you go to?

Point is that everybody would pick the one with zero and you know what, the one with 100

would get to zero pretty fast. Those are the kinds of performance indicators that we need out there in the public, real time, not this two year old, three year old data.





The third component is that we've got to redesign care, and I believe using Lean, but if there's other quality improvement methodologies people want to use that's fine. But we have got to take the cost out of the healthcare system. It is exponentially rising at six to eight percent a year. It's already over 17 percent of our GDP, and the present healthcare reform bill does nothing to attenuate the cost of care. There are some pilots going on, maybe in ten years there might be some changes. We can't wait that long; it's got to be now.

Joe: The Healthcare Leaders Network that you have, what is that about?

John: The Healthcare Value Leaders Network, which has been in existence now for about a year and a half, are groups of organizations committed to transforming their cultures to Lean and they are working together as a learning collaborative. The best way to think about it is to think about it as a Toyota supplier network group. Usually about 12 suppliers that get together, learn from each other in terms of their Lean journey. This is exactly what we're doing for these healthcare organizations. We have two of these networks now, of 10 to 12, and we have another planning session in September with others that are interested.

Our goal is basically to form as many learning networks as demand for. We are administering this through a partnership between the Lean Enterprise Institute and my

organization, which is the ThedaCare Center for Healthcare Values.

We bring the Lean experts together with the healthcare experts to build out what we believe is the best set of processes to learn the Lean methodology.





Joe: You could with this network decrease your learning curve at a pretty rapid rate, but you can also stick your toe in the water to see if it works for you, right?

John: A lot of this is experimentation, as you know. We're just constantly experimenting with the tools, with principles. And what the value that the network members have is that

they can learn from each other. There's usually somebody that's actually tried what you are going to try and you can go see it. We facilitate two day site visits where you actually go see the work that each of the members is doing. We do pre-visits to make sure that we show you the best stuff that they're doing. Yeah, go look and see what it is that you're going to try to do and usually, there's somebody that's already tried it and learned a lot about it.

Joe: The middle section of the book on Lean leadership - and I think you found that leadership was so important as we do in selling any change - was there any big surprises that you found there or something that you really stumbled upon, that you struggled with for a long time?

John: Many things, many things. I tell people that the type of leader that I was when I started as CEO at the organization versus the type of leader I am today - I was 180 degree difference. I came from this sort of autocratic, controlling physician-led, blah, blah, blah sort of world. And the world of Lean leadership is exactly the opposite of that; mentor,

facilitator, teacher, helper, communicator. The Lean leadership world is all about you asking the right questions to stimulate the thoughts that actually then will lead to the solutions in your staff? And none of us are trained in that sort of leadership style. We're all trained to have to know all the answers and everybody comes to us to get them.





This a huge change in the way you lead an organization and you can't underestimate how hard that's going to be as a leader.

Joe: But you are trained in the healthcare, everybody's trained to ask good questions. That's how you diagnose someone. You're experts at asking questions. So, doing this in the

management, I would think, would be somewhat second nature.

John: We're asked to ask questions without a team. This is about me asking questions to the patient. It's about my knowledge. It's about my control of that knowledge and my control of the people who then, once I make a decision... Lean is much more about, "OK, let's get the team together to actually ask the questions." What's happened at ThedaCare is instead of the doctor going in and meeting with the patient, the doctor, the nurse, the pharmacist, the discharge planner, all go in at the same time within the first 90 minutes of admission and do a history and an examination together.

When they come out of that, there's a single care plan that all the important components - all the players in the team actually believe in, understand and have had input on. That is not how we are trained. As physicians, we are trained to control everything and make all the decisions and be highly autocratic.

In this new world, all of that's got to be broken down and we've got to get the best thinking from all of these quite talented and well-educated staff members.

Joe: What's on the horizon? What do you have coming up next?





John: We have a series of things. Like I said, we're going to be expanding our networks, so people that are interested in learning from each other go to our website at HealthcareValueLeaders.org and sign-up to come to one of our sessions, kind of our introduction to Lean sessions. The other thing that we're really focused on is how do we actually measure value in healthcare, and this is a really big problem. We've been working on it for two years and we've worked with Dartmouth people, the Brookings Institution, the Commonwealth Fund, you name it, on and on and on.

We're still struggling with really, how do you compare Group Health of Puget Sound's performance to UCLA, to ThedaCare, to Gundersen Lutheran and to Harvard Vanguard Medical Group? That's what we need to be able to do, is to really understand the value performance metrics.

We have several experiments in place right now to try to crack that nut and we're working with a lot of folks on that. Between that and my work in Washington trying to get some of these folks to change their mind about what the problem is, there's plenty to do.

Joe: I've noticed you put on a few webinars and you speak all over, I see you're quite active in that area. I know you're at AME coming up in Baltimore. I think you're doing one of the keynotes or the keynote there. If someone wants to - do you hold webinars on a regular basis?

John: We're starting to - we're going to start this fall to do more webinars specifically related to the learning that we're getting out of the network groups. I've done one on Lean





leadership, I've done one on OSHA planning, and I‟m going to do one on Lean leadership this fall. We're going to do another one on sustainability.

We're going to take topics, focus in on certain important components of Lean, but really look at it from this perspective of healthcare. What does sustaining mean in healthcare and

what are the resources and the processes that you need to be able to sustain your improvements?

Joe: Is there something that you'd like to add maybe, to this conversation, that I didn't ask?

John: What's fun for me is everyday I'm learning something new because Lean is tremendous methodology that is so robust that I will never learn it all. It should be an exciting journey forever.

Joe: I would like to thank all the listeners and also thank you, John. I appreciate it very much. The podcast will be available on the Business901 blog site and also Business901 iTunes store. So, again, thank you, John.

John: Thank you very much.





Joseph T. Dager

Lean Six Sigma Black Belt

Ph: 260-438-0411 Fax: 260-818-2022

Email: [email protected]

Web/Blog: http://www.business901.com

Twitter: @business901

What others say: In the past 20 years, Joe and I have collaborated on many

difficult issues. Joe's ability to combine his expertise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost effectively and

with ingenuity. A brilliant mind that is always a pleasure to work with." James R.

Joe Dager is President of Business901, a progressive company providing direction in areas such as Lean

Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean Six Sigma Black Belt, Business901 provides and implements marketing, project and performance planning methodologies

in small businesses. The simplicity of a single flexible model will create clarity for your staff and as a result better execution. My goal is to allow you spend your time on the need versus the plan.

An example of how we may work: Business901 could start with a consulting style utilizing an individual

from your organization or a virtual assistance that is well versed in our principles. We have capabilities to plug virtually any marketing function into your process immediately. As proficiencies develop,

Business901 moves into a coach‟s role supporting the process as needed. The goal of implementing a

system is that the processes will become a habit and not an event.

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