What Healthcare is Learning from Manufacturing

SHARINGEXCELLENCEWhat Healthcare is Learning from Manufacturing

• Retained Executive Search Firm Specializing in TPS and Transformational Operating Systems

• Exclusive focus since 1991

INTRODUCTION

• USA richest country in the world yet lagging in healthcare.

• WHO ranks US 37th vs. all other nations.

(blended ranking combines health of citizens, cost of care, responsiveness of health system)

SPENDING MORE FOR LESS

SPENDING MORE FOR LESS

Source: OECD

SPENDING MORE FOR LESS

VIEW FROM THE HOSPITAL LEVEL

• Patient volumes in decline – Higher deductible rates– unemployment/uninsured– Elective procedures down

• Revenue (reimbursement rates) in decline– Medicare– Medicaid– Private insurance

OPERATING REVENUE IN DECLINE

$

• Medical errors kill enough people each week to fill four jumbo jets

• 25% of patients are harmed through medical errors

• Standard methods used to detect errors fail as much as 90% of the time

• Reimbursement increasingly tied to quality metrics

Sources: WSJ 9/21/12; US News and World Report 8/28/12;

QUALITY ISSUES

2009

• $210 Billion: Unneeded services

• $190 billion: Excess administrative costs

• $130 billion: Mistakes and delivery inefficiencies

(preventable complications, fragmented

care).• $105 billion: Artificially

high prices.

Source: Institute of Medicine report 9/12

WASTE ABOUNDS

• Topline Revenue in decline• Quality issues alarmingly

high• Unsustainable levels of waste

• Increased levels of accountability

LEAN/TPS

SUMMARY

LEAN AND THE HEALTHCARE INDUSTRY

• 10 years ago less than 3% of hospitals were investigating Lean.

• Today that number is closer to 30% and growing.

• Stiles Associates Healthcare practice has grown 10x in 5 Years.

GROWING DEMAND FOR LEAN

• Consultants • Internal Lean Teams• Cross Industry Collaboration:

– ThedaCare - Ariens– Virginia Mason – Toyota– WellSpan and GM build simulation training

center– Autoliv tours– Many more

HOSPITAL SOURCES FOR LEAN

• Emergency Departments• Operating Rooms (scheduling/set up/turnover)• Inpatient units • Materials/Supply Chain• Labs• Discharge process• Facility Design

APPLICATION ACROSS SYSTEM

• Value Stream Mapping• Kaizen• 5S • Standard Work• Poke-Yoke• Kanban • Spaghetti Diagrams• Paretos• Level Loading

MOST COMMON TOOLS

Results:• Step Reduction

15%

• Total Process Time Reduction: 44%

• Total Distance Reduction: 46%

EXAMPLE – OR LAYOUT REDESIGN

Source: Joan Wellman Associates

BEFORE

PROJECT EXAMPLE – SUPPLY AREA

Source: Joan Wellman Associates

Results:

• Supply Search Time Reduction 82%

• Total Space Savings: 14%

• Sustainable Visual System implemented to aid timely reordering.

• Strategic Planning• KPI Development• Visual Control Boards• PDCA Culture Initiatives• A3• Daily Huddles• Leadership at the Gemba

MANAGEMENT SYSTEM

• Akron Children’s Hospital: Reduced costs more than $8 million from 2009 to 2011.

• Henry Ford Health System: Reduced inpatient harm rates nearly 25% and achieved cost-savings of $85 per patient.

• Inova: Decreased ER waiting time by 31% and improved operating margin by $10 million.

• Mercy Hospital in Mason City Iowa: Achieved a 53% faster turnaround time for patient blood test results, $470,954 in annual cost savings and $70,000 in construction avoidance.

(Source: Healthcare Value Leaders Network)

OTHER SYSTEM RESULTS

• Seattle Children’s Hospital: Reduced overall patient costs by 3.7% and supply expenses by $2.5 million.

• ThedaCare: Achieved zero medication reconciliation errors for 4 years in a row and reduced readmission rates to less than 12%.

• The Cleveland Clinic has realized over $100 million in savings in the last 5 years.

(Sources: Healthcare Value Leaders Network; the Cleveland Clinic)

OTHER SYSTEM RESULTS

LEAN HEALTHCARE MIGRATION

• Lack of native transformational experience

• Need for strong operational leadership experience

• Establishing Metrics and Alignment skills deeply needed

• “Fresh eyes” can see more waste

MIGRATION DEMAND

MIGRATION INTEREST

MIGRATION INTEREST

Candidates are Seeking a Deeper Connection to their day-to-day work

MIGRATION INTEREST

• Ability to Slow Down• Ability to deal with Complexity and

Ambiguity• Relationship Building/Interpersonal Skills• Excellent Communication Skills• Previous Experience in Business Process

Areas• Transformational experience in different

industries• Optimism and the Ability to Create Pull

SKILLS REQUIRED

Ted StilesPartnerStiles Associates800-322-5185tstiles@leanexecs.com

QUESTIONS