World-Class Performance Lean in Healthcare Operations “A Lean Guy Goes to the Hospital” Presented Aug 4, 2006 Mark Graban, LFM ‘99 Senior Consultant, ValuMetrix

World-Class Performance

Lean in Healthcare Operations

“A Lean Guy Goes to the Hospital”Presented Aug 4, 2006

Mark Graban, LFM ‘99Senior Consultant, ValuMetrix® ServicesOrtho-Clinical Diagnostics, Inc.

Business Confidential, © Ortho-Clinical Diagnostics 2006

Agenda

• The Crisis of Waste in Healthcare

• Lean Thinking Principles in Healthcare

• Benefits for:– Patients

– Employees

– Hospitals


Mark’s Spaghetti Chart


Who Do I Work For?

• ValuMetrix Services (Ortho-Clinical Diagnostics)– Started in 2001 running Lean and Six Sigma pilots in labs

– Launched as a fee-for-service consulting business in 2003• Not “internal consultants”

– 100% dedicated to healthcare projects• Hospitals, Laboratory Companies

• U.S., Canada, Europe, China

– Application of the J&J “Process Excellence” Model

– Project-based approach, lean coaching, “train the trainer”• Goal is to help build a lean enterprise, not to do “kaizen events”


In the News Almost Daily…


Hospitals Are Dangerous…

CDC 1998:

90,000 killed and 2,000,000

injured from hospital-caused

drug errors & infections


Preventable Errors Abound…

“… 3 to 5% of specimens taken

each year are defective… blood that isn’t drawn

correctly… mix-up with another

patient’s sample”






Mass Production or Healthcare?

• Large batches

• Sub-optimizing one resource

• Lack of employee input

• One-person / One-machine

• Quality through inspection

• Automation is the answer

• Lack of standard processes

• Not communicating metrics

• Lack of leadership

• Constant fire fighting


Non-Lean, Current Thinking

1. Specify value in the eyes of the provider (or the payer)

2. Identify your department and sub-optimize it

3. Make patients wait for the convenience of the system

4. Ignore some employees and devalue others

5. Continuously fight the same fires in the pursuit of surviving the day


Applications of Lean in Healthcare

• Laboratories– Reducing Turn Around Times and Errors

• Emergency Departments– Reducing diversions, improving flow

• Outpatient Cancer Treatment– Reducing patient delays, increasing capacity

• Operating Rooms– Reducing changeover times, increasing utilization

• Pharmacies– Reducing errors, improving response

• Food Service– Reducing wasted food, improving quality


Why LEAN Works in Healthcare

• LEAN is not a list of tools that applies only to factories

• LEAN is a philosophy of management that applies to any system

• LEAN rallies people around goals we can all agree on:– Patients and Employees


Not About Cutting Heads

• Shortages of skilled employees– 51% of hospital med techs greater than 45 years of age,

vacancy rate at 11%

– Shortfall of 265,000 nurses expected by 2010

• Do more…

– With the same

– Eventually, with less


Not Only About Cutting Costs

• Hospitals are using lean as a Business Strategy– Improving quality

– Improving service

– Improving employee satisfaction

– Growth strategies

– “Un-outsourcing” testing work


Source: LEAN Thinking, Womack and Jones 1996

Principles of LEAN Thinking

1. Specify value in the eyes of the customer.

– The customer must be willing to pay for the activity

– The activity must change the form, fit or function of the product

– The activity must be done right the first time

– Who are the “customers?”




2. Identify the value stream and eliminate waste.

13% of hospital costs are due to controllable waste.Source: Zuckerman, Hadley, and Iezzoni, 1994


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Typical Organization is Silo-ed


Value Stream – Anatomic Pathology

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Was this an “ER Problem?”

• “…empty beds are available in the hospital, but there aren’t enough nurses to staff them.”

• This is a Value Stream problem!


Types of Waste – Lab Examples

• Defects

• Overproduction

• Transportation

• Waiting Time

• Inventory

• Motion

• Processing

• Human Potential

• Label on the wrong tube

• Drawing all blood at 4 AM

• Long walks, multiple handoffs

• Tube waiting on centrifuge to fill

• 50 weeks of supply

• Tech walking 80 ft to the printer

• Time/Date stamps added, not used

• Administration not listening to Med Techs or RN’s ideas for improvement


Are We Tolerating Waste?

• Healthcare = Workarounds– Professor Steven Spear

• “Decoding the DNA of the Toyota Production System” (HBR)

• “Fixing Healthcare Today From the Inside” (HBR)

• Case Example: – 10-20% of MD orders are missing EVERY DAY

• Call and get the order – done?

• Tomorrow, we’ll do the same

• Problems need to be seen as opportunities


Laboratory Layouts Drive Waste

Layout is driven bydepartments

Benches interfere withstraight-line walking, encourage batches


Clinical Laboratory Product Flow


Clinical Laboratory Timeline

Total CT = 5.44 hours


Med Tech Walk Pattern

Pharmacist Walk Pattern

Layouts Drive Waste of Motion

Cancer RN Walk Pattern

Miles per Day!


Typical 5S Baseline

Unorganized Workbenches Product Flow not Obvious Time wasted looking for things Hoarding of supplies

Poor Utilization of Space General Clutter Supply Shortages and

“Hidden” Inventories


5S Improvement Examples





3. Make value flow at the pull of the customer.


• Mass Production Thinking Utilization– Keep expensive assets heavily utilized

• Machines Doctors

– The tradeoff is waiting time• Cars Patients

• Lean Thinking Flow– Focus on reducing Patient Waiting time

Reducing Patient Wait Times


B

A

PATIENT

ARRIVAL TO TREATMENT

(HOURS)

LATENESS FOR TREATMENT

(HOURS)A 2.5 0.42B 3.5 1.08

AVG 3.0 0.75

• Blood drawn• MD consult• Needle into Port

• Check In / Check Out• Moving from room to room

• Waiting for Check In• Waiting for MD• Waiting for Treatment

Value Added

NVA But Required

NVA, “Pure Waste”

Outpatient Oncology Patient “Flow”


Re-Work Loops Cause Delays


Batching Prevents Flow


Batching Hurts Quality

• Lack of “standard work” and opportunity for “error proofing” – Anatomic Pathology

Batch of slides made, 3 patients, risk of mixup? 2nd histotech labels one

slide at a time


Batching Hurts Quality

• Lack of “standard work” and opportunity for “error proofing” – Pharmacy


Flow and Heijunka

• You can’t have flow without some amount of “leveling” in the system

• “Leveled Production:– You won’t be Happy without it”

» From Toyota publication


39% of Samples Arrive in Just 3 Hours of the DayTAT expectations are constant

Typical Hospital Lab Not Level


Shift ShiftShift

Leveling Reduces Peak Costs





3. Make value flow at the pull of the customer.

4. Involve and Empower employees.

5. Continuously improve in the pursuit of perfection.


Pre-Lean Med Tech Quote:

“With all of the automation, I feel like a robot.”


The “Thinking Production System”

“Perhaps the greatest strength of the Toyota Production System is the way it develops people.

This is why the T actually stands for ‘Thinking’ as well as for ‘Toyota.’”

– Teruyuki Minoura, Toyota


Source: USA TodayAugust 24, 2005

What Mistake-Proofing Means to Healthcare

The Global Goal: Reduce Medical Errors

“Human error is inevitable. We can never eliminate it.” …..

We can eliminate problems in the system that make it more likely to happen.”

Liam Donaldson

WHO World Health Alliance

for Patient safety


• Traditional Approach:– “Naming, Shaming, and Blaming”

• Lean Approach:– Supports open reporting of mistakes

– Root cause problem solving process

– “Anyone can make mistakes”

Lean Requires a Cultural Shift


Error Proofing Example

• Micrograms or Milligrams?

• A medical mistake waiting to happen when written by hand


Error Proofing Example

Confusing

Unambiguous(Lean)


MD Resistance to Standard Work

• “… some surgeons make a tiny, mole-sized mark on a patient instead of a big, bold "X”…. I call them passive-aggressive marks…”– USA Today, 4/18/06

Which isMore effective?


Lab Benefits from Lean

• Productivity improvement >30%

• Space savings of >450 sq ft

• Standardized work practices

• Reduction in Errors and Error Potential

• Test Turnaround Time (CT) reduced by 50%


Hospitals Avoiding Capital Costs

• From 60,000 sq ft to 40,000 sq ft for new lab– Cost avoidance of $800,000

• Blood bank in new lab w/o adding 2,500 sq ft– Cost avoidance of $400,000

• Hospital food service cancels new building– Cost avoidance of $7,200,000


Improving Patient Satisfaction

October

2005

Hospital System ED

60% Overall Rating

62% Privacy

78% Wait Time for MD

61% Likelihood of Recommending

December 2005

96%

84%

96%

98%

PATIENT SATISFACTION SURVEY SCORES


Reflections on a Year in Healthcare

• Lean is a powerful methodology

• People are people

• Healthcare people have incredible intrinsic motivation

• Humility and asking questions is better than being a know-it-all

• Coaching the team to “do lean & be lean” is the only sustainable route


A Call To Action

• What can you do?– Talk to hospitals and doctors in your communities

– Get involved with hospital boards

– Encourage employer health plans to push lean

– Consider a career shift into healthcare

– Resources:• “Good News… How Hospitals Heal Themselves” (DVD/PBS)

• Hardwiring Excellence (by Quint Studer)

• www.ihi.org (Institute for Healthcare Improvement)

• www.prhi.org (Pittsburgh Regional Healthcare Initiative)

• www.leanblog.org (Mark’s lean blog)

World-Class Performance

Lean in Healthcare Operations

Mark Graban, LFM ‘99Senior Consultant, ValuMetrix® ServicesOrtho-Clinical Diagnostics, Inc.

[email protected]

[email protected] www.leanblog.org

Documents

World-Class Performance Lean in Healthcare Operations “A Lean Guy Goes to the Hospital” Presented Aug 4, 2006 Mark Graban, LFM ‘99 Senior Consultant, ValuMetrix