Applying Lean in Healthcare

Applying Lean in Healthcare Guest was Mark Graban of Lean Enterprise Institute

Business901 Podcast Transcript

This is a transcript of a podcast that featured Mark Graban. We discussed the role he is playing at the Lean Enterprise Institute and his book on Lean Health Care. Mark is an engaging speaker and a Lean advocate. Mark also writes the highly acclaimed Lean Blog.

We also had a chance to talk about the collaboration headed by the Lean Enterprise Institute and the ThedaCare Center for Healthcare Improvement, where they have a network of 16 healthcare organizations that are trying to help each other with their lean improvement efforts.

Mark Graban is a Senior Fellow at the Lean Enterprise Institute and author of the Shingo Prize-winning book Lean Hospitals: Improving Quality, Patient Safety, and Employee Satisfaction. Previously, Mark worked as a consultant for numerous healthcare organizations across North America and in the United Kingdom. He taught and led teams of hospital personnel across multi-month lean transformation engagements in departments including laboratory, radiology, primary care, and nursing settings. Working with managers and senior leaders, these hospitals developed a track record of sustaining their lean improvements and also instilling a culture of continuous improvement and kaizen. With a background in Industrial Engineering, Mark first learned and practiced lean in various manufacturing industries, learning how lean concepts and management methods could be translated into different settings.

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

Joe Dager: Thanks, everyone, for joining this. This is Joe Dager, the host of the Business901 Podcast. Participating in the program today is Mark Graban. Mark is a Senior Fellow at this Lean Enterprise Institute and the author of the prize-winning book, "Lean Hospitals: Improving Quality, Patient Safety, and Employee Satisfaction." Mark, I want to welcome you to the podcast. Could you give me just a little bit of background on yourself and a brief overview of the Lean Enterprise Institute?

Mark Graban: Sure, Joe. Thanks for having me; it's a pleasure to be here with you and your audience. Like you said, I am a Senior Fellow with the Lean Enterprise Institute in Cambridge, Massachusetts. Lean Enterprise Institute was founded about 12 years ago by Jim Womack of Lean Thinking fame, the book "The Machine that Changed the World."

When Jim left MIT, he started the LEI, which is a not-for-profit, educational institute. Our mission, really, is to help make the world lean. We do education workshops, publications, we have our website. Our goal and mission is pretty focused and pretty passionate around helping spread Lean. We know it's of great benefit to industry and society. Now, we've made more of a move to try to help advocate for Lean in healthcare. So, that's a big part of my role here at the LEI now is to be involved in Lean Healthcare projects.

A little bit about my background. I'm, actually, an industrial engineer by trade. I'm from the Midwest; I started working in the automotive industry. I've always worked with the Lean Methodology throughout my career. Then, in 2005, I had the good fortune to take an opportunity with a small services group in Johnson & Johnson. It's a group that does Lean consulting work with hospitals throughout North America. So, I've done a lot of work with a number of hospitals. I worked with hospital staff to teach them and get them going, along with their managers and executives, in their Lean transformation efforts.

That's a little bit about my path to where I am today.

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

Joe: Lean, typically, is first thought as a way to increase efficiency. In a healthcare provider is that how lean is perceived? And, who's the particular person who gets involved at the healthcare facility, originally, that you talk to?

Mark: Yes, you're right, that Lean, certainly, does help improve efficiency. There is waste in every hospital process that you could go and see. I think, the exciting thing with Lean, and this is where you really get healthcare employees, physicians, nurses, and everybody engaged in the process is to use Lean primarily as quality improvement methodology, improving patient safety and helping people provide patient care more, effectively. As a result of quality improvement, comes cost reduction and efficiency improvement. So, I think, in any Lean setting - and this is true in hospitals - that it's pretty well proven now, that Lean is a methodology that helps you get improvements across the board. It's good for the patients in terms of quality improvement. They don't have to wait this long in the course of getting care. They don't have to wait this long to get discharged from the hospital. It's good for the staff because it's empowering, that people now have a methodology for defining and improving their processes within healthcare.

You have a lot of people in healthcare that work very hard. They care, deeply, about their work. It's a profession that's very mission and purpose driven. People come in to healthcare to help other people. With Lean, finally, we give them an approach where they can solve problems, eliminate waste, and spend more time on patient care. It is very gratifying and exciting for the staff.

I think, where Lean gets initiated often is at the administrative or senior leadership levels. Sometimes, but not always, it is a CEO or a chief operating officer driven initiative to start. Sometimes, and ideally, I would say, with cooperation from a chief medical officer and the physician side of things.

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

It's often started at a mid-manager level. There are a lot of hospitals I've worked with where Lean starts, really, as a departmental effort. You have a Director over a department; let's say the Pharmacy or the hospital laboratory. Within their span of control, they'd say, "We're going to start with Lean. We're going to get some training. We're going to start a project. We're going to have our initial efforts." From that initial department, it often then starts to spread, horizontally, throughout the hospital. The executives see the success with Lean in one department, they like the results. They say, "I want more results." So, it may spread to the Pharmacy or the Emergency Department or out-patient clinics.

Then, the next level of progression you see, not only are they getting results, but the results are being sustained. The executives, if they, initially, weren't a huge believer in the Lean Methodology, they very often come around after a year or two and say, "Wow! There's something really special about this Lean Methodology." That's often the point where the executives really get engaged. They have the opportunity now to have Lean become part of the cultural transformation efforts. It becomes part of the management system for the entire hospital, which is where, I think, some of the leading examples of Lean hospitals stand today. Lean is not just a bunch of improvement tools. Lean is really how they start to define their culture in the way they do things every day.

Joe: It's interesting that so many things that people promote, people do lead with the cost. That was very little, if any part of your conversation. It comes with efficiency, but your thrust is really on improving on how to do something. I find that real interesting, Mark, that comes out, and that was natural. It wasn't anything that was pulled out of the air; it was just your natural way of talking about it.

Mark: In healthcare, because people are so concerned with the patients and with quality, they often get turned off. I think, as much in healthcare as you might find back in

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

manufacturing, there's this conventional wisdom that's sort of incorrect. The conventional wisdom says that, "There somehow must be tradeoffs between quality and efficiency, or tradeoffs between quality and cost." So, a lot of times, it's kind of almost, by instinct, if you come in and start talking about cost, people's reaction is reflexive. They'll say, "Ah, you're going to hurt quality." In traditional management methodologies or traditional process improvement, that might have been true. But, that's the great thing about Lean.

You improve quality not by adding more layers of inspection or by hounding people and lecturing them to not make errors. You go in and you, actually, improve the process. You help error proof and standardize work where it can be standardized. Then, people see that, yes, quality and cost can go together.

If we step back and look at the level of the National Healthcare Debate, everybody including President Obama and our political leaders are saying, we need to both improve quality and reduce cost. For some people that's somewhat wishful thinking of how are we going to do that? Is it going to be because of technology, because of electronic medical records? I think those of us with experience with Lean would advocate that Lean is probably the better path to meet those dual objectives of quality and cost.

So that's where...not myself really but you have a lot of healthcare leaders trying to help educate people that there's often a piece missing in this debate, that we need a methodology, not just a goal of how we're going to make these improvements.

Joe: I think that's very well said. Explain something to me. What's the difference between just Lean and Six Sigma, or are they intertwined? Just a quick overview of that a little bit?

Mark: Sure. My background and experience and training are primarily in the Lean methodology. I've worked in organizations that categorize themselves as Lean Sigma methodology companies. I see Lean and Six Sigma as very complementary. There's a lot of

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

overlap, but I do see them as distinct methodologies. I tend to not think of this combined blurred Lean Six Sigma notion. I tend to think of Lean and Six Sigma. There's no point in starting any sort of quality improvement turf war between the Lean people and the Six Sigma people. They can work hand in hand. And I can share some experience from hospital people I've worked with and talked to.

I think Six Sigma had a bit of an earlier foothold into healthcare. Maybe a couple years, head start over Lean. And almost universal feedback I've gotten from hospitals is that they started with Six Sigma, did a lot of training, really tried to do the in depth statistical analysis and problem solving. And from their experience they learned, "in hindsight, we wish we had started with the Lean and then move to Six Sigma." Because a lot of the problems in healthcare are issues of waste and process flow, problems that can be solved with the basic Lean tools and really don't require initially a ton of statistical analysis from black belts or master black belts.

So I think the progression that more hospitals are seeing is to start with Lean, help stabilize the process and get the gross waste out of the process, and then start developing and training green belts and eventually black belts to use Six Sigma to solve the kind of particularly difficult and sticky problems that still remain after taking your pass with Lean improvement.

I see Lean and Six Sigma working well together. I think it's a matter of using the right approach in the right way is probably what's going to be most helpful for people.

Joe: What have you seen the transformation in Lean take place over, let's say, the last five or ten years? Has this methodology been changing, evolving? We always talk about continuous improvement with Lean. Has Lean been continuously improving?

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

Mark: Yeah, that's a good question. I think, to speak a little bit on the perspective of the Lean Enterprise Institute, if you look at the articles that Jim Womack has published in the last couple of years, I think it's fair to say that the Lean community, the Lean world has evolved from an era of looking at tools, to an era now where we're talking about management systems. Instead of looking at Lean of just a toolbox of methodologies and use buzzwords like Kaizen, 5S and Heijunka and all these words that are overly unnecessarily mysterious to people, instead of looking at individual tools and really step back and say, how does an organization manage itself, set goals, manage people, solve problems day to day? It's a different level of understanding of what Lean and really what the key to Toyota's success has been.

In a way, healthcare is kind of late to the game. Maybe 15 or 20 years after Lean had really spread within manufacturing, which is natural because, the leap to understanding how this could apply in healthcare is not at all obvious to people at first. That's very understandable.

But I think healthcare can learn and take advantage of the previous experiences that the manufacturing industry has had, and jump start that evolution instead of thinking for the first 10 years of Lean in healthcare, this is just about tools. Hospitals I think are more quickly making that leap to understand almost from the beginning, yes this is tools but it's also about culture and problem solving and management system. I think in a way the trailblazers of manufacturing and all of the accumulated experiences there are being beneficial to people in healthcare as they study what's worked, what hasn't worked well back in manufacturing.

Joe: Your book, "Lean Hospitals", who is your primary audience for that book?

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

Mark: The book was written looking primarily at a healthcare readership audience. At executive leadership levels to provide a concise overview of Lean defined in familiar healthcare scenarios, healthcare problems, and healthcare situations and for middle managers and front-line staff. It's not meant to be a detailed how-to-book. I think that would be a different book altogether, but a concise overview to help people understand, here's what Lean is. Here is how it applies in a healthcare setting. I think what has made happiest is hearing a story like this. Somebody had bought the book and read it, then bought a copy for their Chief Financial Officer in the hospital. The CFO from reading the book said: “The thing I got out of the book is that Lean is not a set of tools, it’s a management system.” So I loved hearing that, because that's exactly the type of message that the book is trying to get across.

I think a secondary audience for the book has been the people that are trying to transition from their career in manufacturing to healthcare. This is a big trend right now, of people for one reason or another saying look; I want to get involved in healthcare. I want to help teach people and make improvements in my community. I think my Lean and process improvement experience can be beneficial.

I think the book is also hopefully also a good guide for people that already know about Lean but are just looking for a way of helping translate and understand how it applies in healthcare.

Joe: Really for someone within the industry of course to learn about Lean, but also when you look at someone that is a Lean practitioner to try to learn about healthcare.

Mark: Right.

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

Joe: I think it's interesting because you would think Lean would be so much CFO driven, but it seems like a secondary target to people in the Lean hospital approach, but the ones that probably get it going throughout the entire hospital.

Mark: That's the thing I think that's great about Lean, and if you look at the success some of the leading hospitals like Thedacare in Wisconsin, or Virginia Mason in Seattle, some of the, I think, the top Lean hospitals, there is something for everybody. I mean, the CFO can look at both cost reduction and improvement. And keeping in mind, part of the Lean philosophy here is that we're not looking to cut costs by laying off people. This is again a difference from traditional cost cutting. But the CFO can see financial bottomline improvement in terms of cost, creating capacity to actually increase revenue; it's something that sometimes people overlook with the Lean methodology.

Chief clinicians, chief medical officers can certainly rally people around the quality and patient safety aspects, of the type of improvements you get with lean, reducing waiting time for patients. HR or the CEO or other leaders can get excited about what Lean helps do for employee morale and employee satisfaction, having a more engaged, happier workforce, lower turnover. And the beautiful thing is that this all goes hand-in-hand.

Better quality leads to better cost; more staff engagement leads to lower cost because you don't have as any people leaving. More engaged staff is more capable of improving quality, and so you get this really nice virtuous cycle where all those different types of improvements really, actually feed on each other, which is, I think, really exciting to see.

Joe: The Lean Enterprise is networking with a few healthcare organizations. Explain that a little bit to me, how the Lean Enterprise is involved?

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

Mark: The Lean Enterprise Institute is making more of a push into the healthcare world.

We've partnered up with an organization called the ThedaCare Center for Healthcare Value, and I had mentioned the ThedaCare health system in Wisconsin. Their CEO, who had really led them through the first five years of their Lean journey -- he is also a physician, John Toussaint. Yeah, he decided after the success they'd had at ThedaCare that he wanted to help spread Lean, spread quality improvement throughout the industry, throughout the country.

They established a not-for-profit organization, the ThedaCare Center. So the LEI and the ThedaCare Center were two not-for-profit organizations that have partnered up to take the strengths from each of our experiences. And we've created what we call the Healthcare Value Leaders Network.

This is an organization, initially of 16 hospitals, physician groups, healthcare organizations from all across the United States, and in fact two of them are actually in Canada. And the idea is that by having an organization, a network here where the hospitals can share their practices and their experiences, that they can help each other out in their Lean journey. It's about everybody will move faster than if they were all doing lean in isolation.

So I think we're hoping that this really leads to -- for one, some powerful results within that network organization. But then we're also working on a number of initiatives including coming up with some standardized performance measures so that these hospitals can be measuring their lean improvement results in a consistent way, and then we can share that with the rest of the world to help strengthen the case for why more hospitals, or really why every hospital should be looking into in adopting the Lean methodology.

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

So, and we have this initial network with lot of shared site visits, and we have some online collaboration tools that we're building to have people from these hospitals be able to interact with each other online, every day, if they need help on a certain issue.

And then our goal is to build additional networks of about 15 hospitals, and get everyone working together. And in June 2010, we're going to have our first annual Lean Healthcare Transformation Summit to bring together all the participants from, at that point what will hopefully be multiple networks.

Plus, anybody from the general healthcare community that wants to come, hear success stories, learn more about lean, learn how to start collaborating with other hospitals, because I think that's -- one great thing about healthcare is for most hospitals -- and maybe it's different with the competitor in your town down the street -- but a hospital in Seattle really isn't competing with a hospital in Michigan, so why not share very openly with each other.

There is already a pretty good spirit of that within healthcare, to serve the mission of serving patients, to be cooperative and collaborative, and that's really where this network comes from. It's the hospitals telling us, we think it would be helpful to have some formal way for us to help each other out, and we are trying to facilitate that.

Joe: How would hospitals find about this?

Mark: So we have a website, its www.healthcarevalueleaders.org, and that has some information about the network, about how to get involved in future networks. We have a newsletter that people could sign up to learn more over time, and we're also trying to build out some just general resources where that site can be a destination for people to find case studies and success stories, and examples, and even if they are not formally part of the network, this is something that we're hoping would be beneficial to the healthcare community at large.

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

Joe: The website is a little bit in its infancy, isn't it?

Mark: Yes, it's still evolving, and very shortly we should have things fully built out where people can go through the menus and find articles and podcasts and videos, and different categories of things that we're sharing.

Joe: What's your future in the Lean Enterprise, and is this your main thrust, the Healthcare Value Network?

Mark: For the LEI as a whole?

Joe: Oh, for you.

Mark: Oh, for me. My job is to focus on Lean healthcare to help coordinate between this network, but also new workshops and training opportunities that we're going to be offering, new publications, new website resources. It's my job to work with the existing team. I'm fairly new to the LEI. My job is to work with the team of people that are already doing great work in those areas and to help just expand the efforts more into healthcare. That is one of the, really the two major strategic initiatives for the LEI this year is the increased focus and effort in the healthcare world.

But I think we're also learning, and I think we can be a resource for -- at some level, Lean is Lean, the general principles and ideas and management approaches. The LEI wants to be the resource for people really in any industry. In fact, while I'm sitting here, we have a class going on in the office on value stream mapping for office and service settings. We have people here from all sorts of industries learning about Lean, and that's really the mission that the LEI is trying to fulfill.

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing

Joe: I'd like to finish off by saying thank you to Mark, and if you'd like to find out more about the Lean Enterprise, you find them on the web.

Mark: The website for Lean Enterprise Institute is www.lean.org.

Joe: And you could be found at?

Mark: I could be found at a number of places. One would be my blog, which is leanblog.org, or for information about the book, people could go to www.leanhospitalsbook.com or they can Google me, I pop up. I am fortunate of having a unique name, Mark Graban, which is good for Google searching.

Joe: We'll post links up on the blog, so if anybody's interested in that they can go the Business901 blog find links also. But again, I'd like to thank you for taking all your time.

Mark: Thank you, Joe.

Application of Lean in Healthcare

Business901

Product Marketing

Lean Marketing

Joseph T. Dager Lean Six Sigma Black Belt

Ph: 260-438-0411

Fax: 260-818-2022

Email: jtdager@business901.com 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 and a certified coach of the Duct Tape Marketing organization, 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. Part of your marketing strategy is to learn and implement these tools.

Applying Lean in Healthcare

Business901

Product Marketing

Lean Marketing