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How experts from manufacturing are helping to redefine healthcare delivery. Ted Stiles, Partner at Stiles Associates delivered this presentation at the 2012 NE Shingo Prize for Operational Excellence Conference on September 25, 2012
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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
