Improving healthcare - there's no instant pudding
Mark Graban on the key ingredients necessary for a philosophy of continuous process improvement to take hold and make a difference in the US healthcare industry.
Read Mark’s original interview with Dodge from 2013, where he explains Lean healthcare strategy and kaizen in detail.
Mark Graban is an internationally-recognized expert in the field of “Lean healthcare.” He is a consultant, keynote speaker and the author of three books, including the most recently published, “The Executive Guide to Healthcare Kaizen: Leadership for a Continuously Learning and Improving Organization," as well as the popular Lean Blog. He works with the software company KaiNexus as vice president of innovation and improvement services. In this interview, Mark gives us his view of the ongoing adoption of Lean in healthcare and what key drivers he believes are necessary for success in continuous process improvement.
Dodge: Have you seen adoption of Lean in healthcare take off in the past year?
Graban: There’s still a lot of interest in Lean in the healthcare industry, but the percentage of hospitals that have implemented it is unknown. Part of the reason for that is that if 10 different hospitals say they’re "implementing Lean" it could mean very different things. They could be adopting Lean in one department or totally transforming their culture. But certainly, it is continuing to be adopted as an important strategy.
Hospitals are facing a lot of financial pressure from the Affordable Care Act (ACA). That stress is creating the same kind of need that Toyota faced after WWII. Toyota was facing serious financial shortfalls and it pushed employees to find innovative strategies to help it compete, reduce costs and increase efficiencies. On the healthcare side, however, when that pressure is really severe a lot of hospitals still fall back on their traditional short-term fixes. Often, that means laying off employees. They’re panicking. It’s not a great environment when that happens. Layoffs are a short-term fix and it gets in the way of a true Lean strategy. These hospitals forget about how important leadership is and focus on short-term fixes.
Dodge: It sounds like the ACA, much like Toyota’s WWII dilemma, is a catalyst for hospitals really examining their processes. But more holistic approaches, like Lean, are competing for a hospital’s attention. For example, there are groups out there pushing the latest technology for efficiency or new marketing programs. Do you see hospitals turning to Lean instead of these other approaches?
Graban: Yes and no. Lean is a powerful strategy but it’s not a quick fix. So much of what Lean is built upon is W. Edwards Deming’s philosophy. He had a saying that "there is no instant pudding." Those quick fixes, silver bullets, generally don’t exist, or have a short-term effect and a bad outcome long-term. There’s never going to be a shortage of sellers and buyers for quick-fix, cost-cutting solutions.
Financial results are of course important, but we have to look at the long term, not this quarter’s financials. That’s really tough for a lot of people to do because there’s serious pressure. You tend to see cost reduction with Lean, but as an end result of these other things that come with it—like improving quality, reducing wait times and making a more positive work place. Lean's definitely a more sustainable approach to cutting costs.
For example, I’ve worked with a number of hospital labs. Some have realized a 25-30% productivity improvement through Lean. Once they achieved that improvement, they didn’t lay off 25-30% of their people. What they did was take on additional lab testing volume so they could do that much more work with the same amount of people. Because of Lean, these people aren’t running around stressed—they’ve improved quality and eliminated waste and reduced turn-around time. They can do more work with the same amount of people. That’s the kind of reduction that goes along with greater quality and service.
In general I think there are far too many hospitals in this environment that are going strictly after cost cutting and ignoring process improvement.
Dodge: So it sounds like what you’re saying isn’t do more with less, but do more with the same.
Graban: Right. Or in some case it’s do more with slightly less, because some people will leave, they’ll retire or move to a new state. There’s certainly things you can do to improve productivity, decrease cost per patient or test or reduce payroll without doing something damaging to morale like a layoff.
I see lots of announcements about layoffs. There’s always some variation on the phrase that hospitals leaders will say “we had no choice but to lay off employees,” or we were “forced to lay people off.” I always say, wait, you had a choice. CEO’s should own that choice. But I would argue there are other choices, and definitely better choices.
Dodge: You tweeted a few weeks back about the new CEO of GM, Mary Barra, taking ownership of the company’s latest and very large recall. Not something you see every day anymore, right?
Graban: Yes. It shouldn’t be so shocking or newsworthy when we see a CEO standing up and saying “I’m responsible for what’s happening here.” But it’s rare. You’d hope that would always happen. But I always appreciate it when a hospital CEO stands up and says “if it happens under my watch, it’s my responsibility.” A lot of leadership will blame errors on employees. But really it’s management’s responsibility. Toyota has a similar philosophy—that as leaders, we’re responsible. And that responsibility comes with the big paycheck.
Dodge: You’re VP of innovation and improvement services at KaiNexus. Can you tell us about your role and how you work with hospitals?
Graban: I work with clients on training and education to formulate strategies that allow them to make best use of both our platform and Lean processes, to help make improvement happen.
Dodge: As far as healthcare goes, what drivers are your customers coming to you with? What motivating factors push them to a Lean approach?
Graban: Our customers share our view that innovation and improvement are things that everyone can and should participate in. When a culture like this is created, everyone benefits. Patients, employees and the overall organization. We see organizations that are figuring out how to get started on developing a culture of continuous improvement—whether that’s technology or through process improvement. Sometimes our customer is an organization that's spread across multiple locations and continents. They’re often looking for ways to share ideas and best practices throughout a company.
People do care about more than cost savings. They’re concerned about patient (or customer) satisfaction, better quality and patient safety. KaiNexus helps them meet all of these goals.
Continuous improvement is all about people solving the business challenges that are important to them while using the right strategies and technologies.
Dodge: Of the hospitals that are most successful with Lean, what do you see as their key attributes?
Graban: There are a number of things, but the top three are leadership, structured methodology and technology.
Committed and involved leadership is vital. We correctly emphasize that front-line staff play the key role in continuous process improvement. But leaders are critically important. They’re responsible for creating an environment where people are engaged. Leaders need to model the right behaviors and principles.
It’s also important to have some sort of structured methodology—small, daily continuous improvement is great. And so are rapid improvement events, like a weekend Kaizen event. If an organization already buys into this type of methodology, they’re in good shape.
Technology can drive behavior change. It’s important in a number of ways. Technology makes it easier for people to do things—like report problems. It can encourage people to raise concerns instead of covering up or ignoring issues.
This past week I spent a few days at a hospital system where the people were really smart, dedicated and hard-working. They were helping people get liver and kidney transplants. Very important work and the staff was so passionate. I was there to help teach a systematic methodology. Along with the leadership, staff was embracing approaches to new management styles. I was so energized by seeing people bring ideas and problems forward. There’s never a shortage of good ideas within an organization. If you create a safe environment where people can come forward, they will. Staff will be more excited and engaged and likely to take ownership and actually implement ideas.
People aren’t resistant to change. They’re resistant to top-down directives or things that aren’t really an improvement. People do have ideas, they’re just waiting to be asked.
Mark Graban blogs and tweets regularly on topics like Lean and kaizen. Follow him @MarkGraban.